 
Be A Rational Pessimist

Published by Bhaskar Sarkar, at Smashwords

Cover art: Sarita Sharma

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Copyright Author Bhaskar Sarkar 2012

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CONTENTS

Prologue

Chapter 1: Reasons for Pessimism

Chapter 2: Types of Pessimists

Chapter 3: Prodigal Politicians

Chapter 4: The Realm of Virtual Wealth

Chapter 5: American Interventionism

Chapter 6: Man versus Nature

Chapter 7: Weaknesses of Human Nature

Chapter 8: Decline of the Developed World

Chapter 9: Limits of Freedom

Epilogue

Bibliography

Prologue

Lots of people feel that Optimism is positive and Pessimism is negative. They believe that all people should be optimistic. Optimists believe that people should not worry about their future or the future of their children. Optimists believe that everyone should invest in stock markets and other speculative instruments like mutual funds and properties, and take loans and spend till they become broke.

The Author believes that Optimists are a dangerous breed. Ronald Regan, an optimist, believed that financial institutions were best regulated by market forces and dismantled the regulatory mechanism established by the United States' Administration to monitor the activities of banks and other financial institutions after the Great Depression. His optimistic deregulation of the banks and financial institutions enabled corporate greed to create the Sub Prime Mortgage Bubble that burst in 2007-2008 causing the global financial meltdown and brought Capitalism into crisis. The Optimists in the British Petroleum management tried to save a few million dollars in cost by not using a remote controlled blowout preventer while drilling for oil in the Gulf of Mexico and caused one of the worst drilling and ecological disasters in the history of oil production. The Optimists in the Tokyo Electric Company, to save costs, allowed its nuclear reactors at Fukushima Daiichi Nuclear Power Plant to be designed to withstand an earthquake of 7 on the Richter scale even though Japan is located in a seismically active zone where earthquakes of strength 9 and above have occurred earlier. The plant was not designed to resist tsunamis. The life of reactor number 1, which was forty years old, was extended by 10 years without due diligence. So, when an earthquake of 9 on the Richter scale and tsunami hit Japan on March 11, 2011, the nuclear power plant was severely damaged and resulted in the second most disastrous situation at a nuclear power plant in the world. Instances of disasters caused by decisions of optimists are endless. Some of them are listed in Chapter 6 of this book. Dangers posed by Optimism need to be exposed so that the world becomes a less dangerous place to live in.

The Rational Pessimists, contrary to popular belief, are not alarmists. They do not believe that the world is coming to an end or that the standard of living of all the people of the world is going down. They do not believe that the United States and Europe, though in terminal decline as economic powers, are going to disappear from the face of the earth. They believe that most innovations and developments in science and technology are beneficial to mankind. The Rational Pessimist is not taken in by the statistics put forward by the Optimists, not because they are incorrect but because they are selectively quoted to support a particular viewpoint. Statistics which do not support the viewpoints are ignored or suppressed. Rational Pessimists do not need to study history to admit that mankind has progressed from the Stone Age to the modern age. They are ready to concede that we have made great strides in science and technologies and will continue to make progress and achieve new landmarks.

The Rational Pessimist is actually a realist. He is aware of the dangers that lurk in this world and take reasonable precautions. Rational pessimism stems from two fundamental truths. The first fundamental truth is that in spite of all the progress we have made in science and technology, man is powerless in the face of the fury of nature. He has no answer to earthquakes, tsunamis, floods, hurricanes, volcanic eruptions and droughts which periodically ravage the earth bringing death and destruction in its wake.

The other fundamental truth is that in spite of all the progress in science and technology and the increased prosperity that it has brought, human nature has changed for the worse. Satanic traits like greed, arrogance, cruelty, intolerance, lust, deceit, selfishness have spread like wildfire while Godly traits like compassion, honesty, humility, tolerance, forgiveness, charity, fidelity, prudence and a willingness to share is declining day by day.

Positive thinking is good. I have a chart in my bedroom which tells one to wake up and tell oneself: " _Today is going to be a great day. Things don't get better by worrying about them. You win some and loose some. I am happy if I have tried my best. There is always something to be happy about. Today I will make some one happy. Life is great, enjoy it._ " One does not need to be an Optimist to be a positive thinker. Optimism is not the same as positive thinking. Positive thinking is a temperament that has to be cultivated till it becomes second nature. One should think positively simply because it makes life better.

This book seeks to highlight the reasons on which "Rational Pessimism" is based. This book also seeks to make the readers "Rational Pessimists" who hope for the best but prepare for the worst.

-The Author

Back to Contents

Chapter 1: Reasons For Pessimism

Is there any reason for optimism in today's world? Nature is on the warpath. At the same time degradation of the environment in the name of economic development is going on all round the world. It is leading to global warming and climate change. The economies of the United States and Europe are in doldrums. Their downturn threatens the economies of third world countries which depend on exports to the developed world for their sustenance and growth. Statistically, poverty may have gone down, particularly in the developing world. But inequalities have increased all round the world and protests have erupted. Protests termed the "Arab Spring", which started in March 2011, have engulfed most of the Arab World. We have had student protests and violent protests in London and other parts of United Kingdom. The "Occupiers of Wall Street" and their supporters are protesting against social and economic inequalities, corporate greed and politician-corporate nexus all around the developed world since September 2011. Afghanistan and Somalia continues to bleed while new violence has engulfed Yemen, Libya and Syria. Confrontation between Israel and Palestine and Iran and its allies and the United States and its allies is escalating and can erupt into a Middle East conflict at any moment. China and the United States are beginning what could turn out to be a new cold war. Are these not reason enough for being pessimistic?

Poverty is Not Going Away

Optimists claim that there is affluence for all in today's world. As per World Bank figures used for official global poverty statistics, the number of people living below the international poverty line of $1.25 per day fell from 1.82 billion to 1.37 billion between 1990 and 2005. To that extent the optimists are right. But it confirms that 1.37 billion people or about one in six of the world's population live on less than $ 1.25 per day. Is that affluence for all?

It should also be noted that poverty is not just a matter of statistics. Each poor household behind the figures has its own human story to tell. Can one feel pain and sympathy for parents who watch their children die of hunger or malnutrition or are forced to sell their children because of poverty? Whatever be the difference of opinion on the extent of global poverty, one thing is certain: a significant proportion of the world's population is excluded from our prevailing economic and social growth. The inherent instability in the world, the political unrest, wars, recession, volatile food and fuel prices, and climate change impact the poor the most.

Let us look at the situation in the world's biggest economy, the United States, to assess whether the world is really a better place today and if there is affluence for all. In 2010, the number of American homes with TV fell from 98.9% to 96.7%, the first time that the number has dropped in 20 years. (Briefings, Time Magazine May 20, 2011). Unemployment in the United States rose from about 5 percent in 2000 to 10 percent in 2010 before dropping back to 9.1 percent in 2011. The poorest community in the US is the Pine Ridge Indian Reservation. It has 85% unemployment, 97% poverty, life expectancy of 50 years, teenage suicide 4 times the national average, infant mortality 5 times the national average. Many families don't have electricity, tap water or sewer. The "Occupiers of Wall Street" who claim that they represent the 99 percent Americans are protesting against corporate greed and political support to big business with tax payer's money. Has United States, the world's largest economy and the only super power been able to reduce poverty let alone eradicate it?

Inequalities

Optimists also claim that economic inequality is declining worldwide. That is not at all true. The growth of wealth in today's world has tended to increase inequality rather than reduce it. A study by the World Institute for Development Economics Research at United Nations University reported that the richest 1 percent of adults owned 40 percent of global assets in the year 2000. The three richest people Bill Gates, Carlos Slim Helu and Warren Buffet possess more financial assets than the 48 poorest nations put together. UNDP has reported that, in 2005, the richest 500 people in the world earned more than the poorest 416 million. A recent report states that the top 1 percent earners in the United States earn as much as the lower 60 percent. Is that reduction of inequalities? The combined wealth of the about 10 million "dollar millionaires" around the world grew to nearly $41 trillion in 2008. The growth in real family income in the United States from 1979 to 2009 is as per US Census Bureau Tables F3 and F1 was -7.4 percent for the bottom 20 percent; 3.8 percent for the next 20 to 40 percent; 11.3 percent for the middle 40 to 60 percent; 22.7 percent for the upper 60 to 80 percent; 49 percent for the top 20 percent. During this period the income of the top 5 percent grew a whopping 72 percent. It will thus be seen that where as the bottom 20 percent Americans are becoming poorer, the top 20 percent are becoming richer. The top 5 percent are getting richer at the fastest rates. Thus inequalities are increasing and not deceasing. Growing economic inequalities are a problem, not only in the United States but almost in all parts of the world. This is particularly true for countries which have opted for the neo-liberal economic model for growth. This growing inequality is not sustainable and will certainly stoke social unrest and violence. The lines below says it all for the "Rational Pessimist":

" _The greatest country, the richest country, is not that which has the most capitalists, monopolists, immense grabbings, vast fortunes, with its sad, sad soil of extreme, degrading, damning poverty, but the land in which there are the most homesteads, freeholds — where wealth does not show such contrasts high and low, where all men have enough — a modest living— and no man is made possessor beyond the sane and beautiful necessities."_ \- Walt Whitman, American poet (1819-1892)

Malnourishment

There are an estimated 2 billion poor people in the world, and most of them are undernourished. About 195 million children under the age of five in the developing world are malnourished. 42% of the world's undernourished children live in India alone. Malnutrition is primarily due to poverty and rising food prices. There are four main reasons for high prices of food stuff. The first reason is extreme weather events like floods and droughts due to climate change which destroy crops. The second reason is reducing the acreage under grain production due to production of non edible cash crops like bio-fuels. The third reason is future trading or speculating on price changes of agricultural products which lead to high prices. The fourth reason is hoarding to create artificial shortages. Rise in food prices show especially harsh consequences for poor and under-nourished people, because they cannot cope with the price rise. As a result they are forced to reduced calorie intake, stop sending children to school, and resort to income generation through prostitution, criminality, searching landfills for recyclable materials, child labour and sending away household members who cannot be fed anymore. At a national level, food importing countries have a problem with finding dollars for importing food.

There has been a dramatic increase in malnutrition in recent years even in the United States. 6.7 million US households had to skip a meal or meals because there wasn't enough money to buy food at some time during 2008. The number represented a 39 percent increase from 2007. This was the largest increase ever recorded since nationally representative food security surveys were initiated in 1995, as well as the largest year to year percentage increase. 10.4 million US households had to get emergency food from community food pantries in 2008, a 27 percent increase from 2007.

Side by side with food shortages and malnutrition is waste. According to a government study, Americans waste an astounding amount of food, an estimated 30 percent of the food available for consumption, or roughly 30 million tons of food worth about $48 billion each year. It happens at the supermarket, in restaurants and cafeterias and in homes. India comes 64th out of 84 countries in the "Hunger Index". At the same time the Government of India has acknowledged that the country wastes about 12 million tons of government procured food grain worth about $10 billion every year due to lack of or poor storage facilities. Massive amounts of food which could feed millions are wasted at wedding feasts all over the country. In some parts of Africa a quarter or more of the crops go bad before they can be eaten due to poor storage, insects and rodents. As per Environment News Service published in Stockholm on Aug 22, 2008, "More than enough food is produced to feed a healthy global population. Distribution and access to food is a problem - many are hungry, while at the same time many overeat." About half of all food produced is wasted. In poorer countries, a majority of uneaten food is lost before it has a chance to be consumed. Depending on the crop, an estimated 15 to 35 percent of food may be lost in the field. Another 10 to15 percent is discarded during processing, transport and storage. In richer countries, production is more efficient but waste is greater, the report says. People simply toss away a part of the food they buy. Governments and the rich just do not care.

Debt

Another major reason for pessimism is the unsustainable debt of the developed world, both sovereign and private. Almost all governments spend more than their revenues and have been doing so for years. The accumulated budget deficit, also known as "Public Debt" has assumed alarming proportions. The Public Debt of the United States in 2011 was about $ 9 trillion or 62 percent of GDP. The total government debt of the country exceeds $ 14 trillion which is close to 100 percent of GDP. What is even more alarming is that the debt is increasing by over a trillion dollars every year and the President and the Congress are unable to come to an agreement as to how the budget deficit can be eliminated. Other nations with huge Public Debts are Japan $8.5 trillion (198% of GDP), Germany $2.4 trillion (83%), Italy $2.1 trillion (119%), India $2.1 trillion (52%), France $1.7 trillion (82%), United Kingdom $1.6 trillion (76%), Canada $1.1 trillion (84%), Spain $ 0.8 trillion(60%), Greece $454 billion (143%), Netherlands $424 billion (63%) and Belgium $ 398 billion (101%). Government debt is financed by borrowing through issue of sovereign bonds. The interest rate for United States and Germany is relatively low but it is rapidly increasing for the other countries with large debts. Greece is on the verge of default and negotiating a bailout. The governments of Greece and Italy have fallen over mounting debt and the need for financial austerity. What is amazing is that governments can only think of austerity measures like reducing salaries, perks and pensions of ordinary individuals like teachers and nurses, reducing subsidies to schools and colleges and laying off public sector employees. All these measures affect the poorer sections of the society. They never take measures to increase their revenues by taxing the millionaires, rolling back tax cuts to the rich and corporations, increasing import and other duties, increasing property tax on large properties and going after tax evaders with all the political and military power of the state.

If governments are in financial trouble, so are households and individuals. Household debt in the developed world is another area of concern. The household debt as percentage of disposable income of some countries of the developed world are Denmark 250%, Netherlands 200%, United Kingdom 130%, Japan 125%, Canada and United States 120%, Sweden and Germany 115%, and France about 80%. With rising unemployment and an aging population, how are the households and individuals going to repay their debt?

The average college graduate in the United States begins his or her post-college days with more than $2,000 in credit card debt. The average credit card debt in the United States is $ 15,800. About 610 million credit cards are in use in a population of about 350 million. The delinquency rate is about 3% per month. The total consumer debt is about $1.7 trillion.

Let us look at the situation in the United Kingdom. As per "creditaction.org.uk" the total personal debt in the United Kingdom at the end of September 2011 stood at ₤1.27 trillion. The average household debt stood at ₤ 55,795 (including mortgages). Average owed by every adult is £29,532 (including mortgages). About 1,644 people loose their job every day and 876,000 people have been unemployed for more than 12 months. Another about 800,000 are expected to be added to the ranks of the unemployed in 3 years due to austerity measures adopted by the present government. About ₤ 22.5 million of loans are written off every day by banks and building societies. One individual is declared insolvent or bankrupt every 4 minutes or so and one property is repossessed every 15 minutes.

Optimists admit that much of the post war rise in standard of living, particularly in the developed countries, was made possible by easy availability of credit. The growth was something like a Ponzi scheme that was destined to collapse. What happens when governments and individuals cannot repay their debt? Is there much scope for optimism about the financial situation in the world?

Happiness

Optimists try to establish that happiness is directly related to wealth. Happiness is a state of mind where an individual is contended with what he has and at peace with the world. The modern day life is becoming more and more stressful. We live in a materialistic society. There is constant pressure on us to achieve and to acquire. Advertisements on the television, news papers and magazines goad us all the time to live an opulent lifestyle, to acquire more possessions, to look sexy and to have more sex. We want our possessions to be the source of our pride, social status and the cause of envy of our neighbors. All this requires large amounts of money. Acquiring more money often requires long hours of work accompanied by neglect of family, particularly children and sometimes shady, unethical or even criminal work practices. Premarital sex and post marital infidelity are in fashion but emotionally painful for the cheated. Job security is lacking. Share markets are volatile. Unending competition, from kinder garden school to retirement, from the workplace to the bedroom, is killing. Can one be happy under these circumstances? The financial crash of 2008 has caused much unhappiness. "Happy Statistics" has little meaning for a person who has lost his money, job or house in the crash.

Conclusion

Is today's world getting better than it ever was? For some it is getting better. For many it is not. But if it is not better, it is not always the fault of the ordinary people. It is the rich and the powerful, the politicians and some times their masters in the corporate world or Washington who makes the policy decisions. It is the ordinary people who bear the consequences.

Are there any reasons why people should be afraid of the future? There are many. The first reason to be afraid is the wrath of nature. Nature is all powerful. Man has been constantly provoking the wrath of nature by degrading the environment and disturbing the delicate ecological balance with its execution of mega-projects. If we do not learn to preserve our environment, mega disasters in the form of earthquakes, floods, landslides, melting glaciers, droughts, hurricanes, tsunamis and rising sea levels will become common and cause untold misery to humanity.

The second reason to be afraid is human nature itself. Arrogance and the desire to dominate and to exploit, religious intolerance, greed, negligence and prejudices have caused wars and environmental or industrial disasters which have brought unbelievable misery from the time of Helen of Troy to Afghanistan, Iraq and other conflicts and manmade disasters of today.

The third reason to be afraid is that knowledge and innovation can be used to both benefit or destroy mankind. Human nature being what it is, it is difficult to predict how knowledge and innovation will be used by the rich and the powerful. The "Rational Pessimist" laments the state of things in the world today.

Back to Contents

### Chapter 2: Types Of Pessimists

A pessimist is a person who is apprehensive of the future. He mostly expects the worst to happen. Optimists complain that pessimists are out numbering the optimists. Good news is no news. Good news rarely make headline. Disasters always do. Optimists complain that authors like Noam Chomsky, Al Gore, John Gray, Naomi Klien, George Monbiot and Michael Moore argue that the world is an awful place to live in and it is getting worse, and it is getting worse because of corporate greed which is destroying the market place, family life and values and the environment. These authors believe that the world has passed the peak of prosperity and it will be a downward slide from here. I will agree with these authors to some extent. But in this chapter, let us try to understand the different type of pessimists. One can identify a few categories of pessimist; the Lay Pessimists, the Educated Pessimists, the Young Pessimists, Pessimists for Profit, the Apocalyptic Pessimists and the Rational Pessimists. Let us try to understand each category.

The Lay Pessimists

The Lay Pessimists are easily found in almost all walks of life. They are simple people, not very well educated and not well versed in the intricacies of world affairs. Their life is a battle for survival. They are concerned about almost all things that affect their limited world. The Lay Pessimists are worried about the future of their countries and states/counties. They believe, some times with justifications, that most political leaders are corrupt and self seeking. The leaders own interest comes first, always and every time, the interest of their political party comes next and the interest of the nation and its ordinary people comes last. The Lay Pessimists are worried about the law and order situation. They lament about the increasing levels of crimes in their society and the corruption and inefficiencies of the law enforcement agencies. The Lay Pessimists are concerned about the moral degradation in society. They are unhappy with the kind of immoral soap opera that is shown televisions. They are horrified by the promiscuity in society, the frequency of divorces, the instances of children neglecting their parent and even tormenting or murdering them for money. They are unhappy with free mixing and live in relationships. Single Lay Pessimists often prefer to stay single rather than face the uncertainty of marriage. The Lay Pessimists are concerned at the level of religious and racial intolerance and violence that has gripped the society. The Lay Pessimists are concerned about the attitude and activities of their next generation. They are alarmed by their level of disobedience and indiscipline. They are unhappy with their attitude towards sharing house work and taking responsibility. They are concerned by the lack of thrift in the next generation. The Lay Pessimists are concerned by the lack of economic opportunities that are available to them and their children. They believe that nepotism works and that knowing someone in power is more important than merit.

The Educated Pessimists

The Educated Pessimists are well read and well versed in the affairs of the world. They are concerned by economic situation in the world and in their countries. They are concerned by the level of government debts, the health of the banks, the property bubbles that keep forming, the volatility in the stock markets and the probability of another financial meltdown. The Educated Pessimists are concerned about the sustainability of present levels of consumption and economic growth. They are particularly worried about depletion of the reserves of crude oil and natural gas which are the primary sources of energy in this energy hungry world. The Educated Pessimists are dismayed at the constant degradation of the environment in the name of development and job creation. Forest cover is being constantly denuded all over the world from the rain forests of Indonesia and Brazil to the pine forests of North America to make room for factories, mines or plantations. Rivers and lakes are being polluted by the release of toxic industrial waste. Uncontrolled emissions from increasing use of fossil fuel is degrading air quality in cities, deplete the ozone layer over the poles and causing global warming. Instances of acid rains have been experienced at places. Excessive use of ground water for industries and farming is reducing groundwater levels and rendering farmlands without irrigation. Uncontrolled deforestation and droughts are causing existing deserts to expand and farmlands being reduced to desert like conditions. The Educated Pessimists are also worried about the global warming, melting arctic ice caps and glaciers, rising sea levels and changing weather patterns which could cause droughts, reduce flow in rivers and result in conflicts over sharing of river waters.

The Educated Pessimists are worried about the continuing conflict between Israel and the Arabs which can erupt in a war involving Iran and Saudi Arabia and plunge the world into a major oil crisis. They are also concerned by the hardening of attitudes and intolerance of the Christian Rightists' and the Islamic Fundamentalists and rising acts of terrorism. They are worried by the increasing belligerence of China and a new "Cold War" that threatens to develop between it and the United States.

The Young Pessimists

The Young Pessimists are men and women in their teens and twenties who do not see any prospect of fulfilling their dreams and aspirations. Many of them come from single parent families or broken homes. Most of them are economically disadvantaged. They are fed up of being nagged by their parents. They feel that the world is stacked against them. They are apprehensive that there are no jobs or economic opportunities for them because of the economic downturn, outsourcing and inflow of immigrants. They drop out of schools and colleges, wile away time chatting and interacting on the internet, playing video games, listening to music and hanging out at meeting places for young people. Some of them are coming out on to the streets to support movements like "The Arab Spring", "India Against corruption" and "Occupiers of Wall Streets.

Pessimists for Profit

The Pessimists for Profit are journalists or specialists who make money by writing or speaking about disasters which could benefit multinational corporations and speculators to make money. They are naturally and often secretly commissioned and paid by the beneficiaries of their pessimism. Pessimists of Profit issue warnings about pandemics such as H1N1 Bird Flu, Mad-cow disease, AIDS and other diseases. They are also warning us about the rise in cases of cancer, obesity, diabetes, hypertension, falling sperm count and so on. It must however be realized that much of the pessimism is sponsored by the drug companies themselves to increase the sale of the vaccines, medicines and food supplements.

Pessimists of Profit issue warnings of crop failure in countries and of impending food and commodity shortages. These warnings result in rise of the prices of the particular commodity in the commodity markets of the worlds. Some speculators who had invested in the commodity make a killing.

Apocalyptic Pessimists

Apocalyptic Pessimists are pessimists who believe that the world is coming to an end. Christians and Muslims or about three fourths of the world's population believe in the "Day of Judgment" before which the world will come to an end. There is a lot of speculation on the likely date of Christ's second coming, Armageddon and the Day of Judgment. The Bible is full of prophesies which describe the conditions prevailing in "End Times" before the coming of Christ. Many believe that day is near. But they are not the only ones.

End of the Maya World

The Mayas, an ancient indigenous tribe of Central America, have predicted the end of the world. The people of the Maya civilization used a calendar called the "Long Count". As per their calendar, 20 days made one "unial", 18 "unials" (360 days) made a "tun", 20 "tuns" made a "katun", and 20 "katuns" (144,000 days or roughly 394 years) made up a "baktun". In the Maya Long Count, the previous world ended after 13 "baktuns", or roughly 5,125 years. The Long Count's "zero date" corresponds to 11 August 3114 BC if the Gregorian calendar is projected backwards. This means that the Fourth World of the Mayas will reach the end of its 13th "baktun", on December 21, 2012. Thus, as per the Mayas, our present world would come to an end on 21 December 2012 when the Great Cycle of the Long Count reaches its completion.

The Second Coming of Christ

There are many passages in the Bible which describe what will happen before Jesus Christ's return. As per the Book of Daniels, "At the time of the end, the king of the South shall attack the King of the North, and the King of the North shall come at him like a whirlwind with chariots, horsemen and with many ships; and he shall enter countries, overwhelm them, and pass through. He shall enter the Glorious Land (Israel) and many countries shall be overthrown; but these shall escape from his hand....He shall have powers over the treasures of gold and silver, and over all the precious things of Egypt; also the Libyans and Ethiopians shall follow at his heels. But news from the east and north shall trouble him; therefore he shall go out with great fury to destroy and annihilate many. And he shall plant the tents of his palace between the seas and the glorious holy mountain (Jerusalem?); yet he shall come to his end, and no one will help him (Daniels verses 40-45)."

Revelation, the last book of the Bible, has also predicted that just before the return of Jesus, Jerusalem will be occupied by outside forces for three and half years (Revelation 11:1-2). About the same time, two divinely appointed men with magical powers will appear on earth. They will announce that the world needs to turn to God because the return of Jesus is eminent. (Revelation 11: 5-6). After three and half years of their appearance, the two will be killed at the behest of political and religious leaders opposed to them and left to lie on the streets for three and half days. (Revelation 11: 9-10).

Thus, according to Christian belief, a major conflict lasting many years will take pace in the Middle East before Jesus' Second Coming. As all these incidents are yet to take place, it is safe to say that the "time of the end" is at least three and a half years away if not more.

Hindu Predictions

Like the Mayas, Indian scriptures believe that the world will go through four cycles or "Yugas" (periods), namely Satya Yuga (age of virtue), Treta Yuga, Dvapara Yuga and the Kali Yuga (the age of vice when people are as far removed from God as possible.). An Indian guru, Kalki Bhagwan, has predicted 2012 to be the end of Kali Yuga and the end of our world. As per Hindu and Buddhist calendars, Kali Yuga began at midnight 23 January, 3102 BC as per the Gregorian calendar. The Kali Yuga is traditionally thought to last 432,000 years. So it is unlikely that the world will end so soon. In any case, Hindu, Buddhist and Sikh religions do not believe in end of the world and Day of Judgment but in rebirth. So when Kali Yuga ends, Satya Yuga will return.

Meteorite Strike

Some proponents of doomsday claim that a planet called Planet X, or Nibiru, will collide with or pass very close to the Earth on December 21, 2012. This idea has appeared in various forms since 1995. It was originally predicted to take place in 2003, but this date was abandoned after it passed without incident. However, the possibility of a meteorite strike remains. But no one can be certain if and when it will take place.

Nuclear Holocaust

Some Apocalyptic Pessimists worry about a nuclear holocaust. The danger is, perhaps, over estimated. Let us see what damage a nuclear weapon is likely to cause. The damage will vary with the type of weapon and the type of blast. Strategic nuclear weapons, which are used for targets behind the battlefield can vary from a yield of 1 KT (kilo ton or equivalent to the power of 1000 tons of TNT) to 10 MT (Mega ton or 100,000 tons of TNT). The damage will also depend on whether the weapon detonates in the air, on the ground or under the ground. Damage is caused by flash and thermal radiation which blinds people looking directly at it and ignites inflammable material like curtains, blast which flattens all things standing above the ground and radiation which kill those exposed to it due to radiation sickness and cancer. An approximate area of 1.6 km radius is completely destroyed by blast from a 1 kilo ton air burst weapon. An area of 2 km radius will suffer severe damage. An area up to 3.2 km will suffer moderate damage and an area up to 5.6 km will suffer light damage. In case of a 100 kilo ton nuclear weapon, an area with 3.2 km radius will be completely destroyed, up to 4 km will be severely damaged, up to 6.4 km will be moderately damaged and up to 9.8 km could suffer light damage. In case of a 10 megaton nuclear weapon will completely destroy everything within 15 km of the ground zero, cause severe damage up to 21 km, cause moderate damage up to 30 km and light damage up to 45 km. Lethal doses of radiation will be transmitted to all persons in the open within the area of severe damage. Direct radiation damage is restricted up to the approximate area of light damage. Immediate casualties are not caused by indirect radiation from radioactive particles which spread in the wind or with water. A large dose of indirect radiation causes slow death due to cancer and may also cause genetic defects in children of those exposed.

It will be seen that it requires a 10 Megaton weapon to destroy a mega-city. Only the United States and Russia have these weapons and it is unlikely that they will ever target each other with these weapons. 1KT to 10 KT weapons are available with many countries including Pakistan and North Korea. One such weapon is required to be successfully and accurately delivered to severely damage one city. Being in short supply, they will be used only on major population centers. Millions may die. But, it can be safely concluded that a large country, let alone the entire world, cannot be destroyed with all the nuclear weapons available in the world.

Other Doomsday Predictions

Some have suggested that some sort of planetary alignment will occur on December 21, 2012, causing great devastation to the earth. Multi-planet alignments did occur in both 2000 and 2010, each with no ill effects for the Earth. There have been many others who have predicted the end of our world. They have all been proved wrong. But that has not deterred others from making predictions. Harold Camping, an American Christian radio broadcaster, has predicted that the world would come to an end on 21 October 2011 (passed unnoticed). Camping had originally predicted the event would occur on 21 May 2011. His Family Radio network of stations spent millions of dollars on an information campaign about his prediction. When his original date failed to come about, Camping revised his prediction claiming he had made a mistake in his calculations.

Ronald Weinland, a self appointed end time prophet of God, has predicted that the world will come to an end on May 27, 2012. Isaac Newton, based upon his calculations using figures from the book of Daniel, has predicted that the Apocalypse could happen no earlier than 2060. According to an opinion in the Talmud and mainstream Orthodox Judaism, the Messiah should come within 6000 years from the creation of Adam, and the world could possibly be destroyed 1000 years later. This would mean that the world will end in the year 3240 CE. Rashad Khalifa, an Egyptian biochemist, in his book "The Quran: Final Testament", claims that, as per the Quran, the world will end in the year 2280 CE. Nostradamus wrote in a letter to one of his sons that the world would end in 3797. His prophetic quatrains ended with this year.

Conclusion

Predictions of Apocalyptic Pessimists regarding end of the world make fascinating reading. There are a whole lot of them making good money by writing books, articles and expressing their views on the internet. The Rational Pessimist is not worried about the world coming to an end. If you die, what is there to worry about? The problems start when you survive disasters and are left without a home, money and food. The Rational Pessimist plans a survival strategy for likely disasters.

Conclusion

The Rational Pessimists are not alarmists. They understand the apprehensions of all the different kinds of pessimists discussed above except with the Pessimists for Profit and the Apocalyptic Pessimists and agree with most of their concerns. But things are rarely as bad as they seem. Governance and living conditions are improving in many parts of the world. Human instinct for survival is strong and countries and humanity will not perish without a fight to survive.

The Rational Pessimists do not believe that the world is coming to an end or that the standard of living of all the people of the world is going down. They do not believe that the United States and Europe, though in terminal decline as economic powers, are going to disappear from the face of the earth. They believe that most innovations and developments in science and technology are beneficial to mankind. The Rational Pessimist is not taken in by the statistics put forward by the Optimists, not because they are incorrect but because they are selectively quoted to support a particular viewpoint.

Rational pessimists do not need to study history to admit that mankind has progressed from the Stone Age to the modern age. They are ready to concede that we have made great strides in science and technologies and will continue to make progress and achieve new landmarks.

The Rational Pessimists acknowledge that there are critical and apparently insoluble problems facing the world. They acknowledge the supremacy of God and nature. They acknowledge the weaknesses and follies of men. But they do not worry about them. Whatever will be, will be.

The Rational Pessimists believe that individuals, families, and societies have to learn to solve their own problems. Others including governments, NGOs, charities etc. have their own agenda. They do not solve problems unless they are approached. We can seek help of others but we have to do our best. Even a loving mother, some times, does not feed her child till he cries in hunger.

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### Chapter 3: Prodigal Politicians

The United States, Europe and even India are democracies. A democracy is supposed to be a government of the people, by the people and for the people. That definition of democracy is unfortunately only for the books. The real truth, in all these so called great democracies of the world, is that the government is of the rich, by the rich and for the rich. Idealism, patriotism and compassion for the economically disadvantaged are rare among politicians. For most politicians of today, the honor and welfare of the politician come first, always and every time. The honor and welfare of the party and the fund providers come next. The honor and welfare of the ordinary citizen come last, always and every time. 99 percent of the people are a necessary inconvenience. They have to be approached with all kinds of promises before the elections. Once the election is over, the people and promises are forgotten. Governing the country becomes acting towards benefiting themselves, their kith and kin, and those who provide them and their charities and non profit organizations with money or other favors.

The politician corporate nexus is based on election funding and lobbying. Politicians need huge amounts of money to contest elections. The financing of elections, at federal, state and local level, has always been controversial, because private sources of finance make up substantial amounts of campaign contributions, especially in federal elections in the United States. In India there is no election funding by the government. So the first agenda of politicians who are elected is to see how they can recover the money spent in getting elected and enrich themselves and their kin.

Money Power in Elections

Federal election campaigns in the United States have been relatively unregulated. The first federal legislation dealing with campaign finance was in 1867. The Hatch Act of 1939 prohibited federal employees and contractors from making election contributions to candidates. Individual contributions are limited to $5,000 per year. The Tillman Act of 1907 and Federal Corrupt Practices Act 1910 sought to limit more broadly the influence of money on the campaigns. However, the acts lacked penal provisions and were largely ignored. In 1971, Congress consolidated its earlier reform efforts in the Federal Election Campaign Act 1971 by instituting more stringent disclosure requirements for candidates for federal elections, political parties, and Political Action Committees (PACs). Federal candidates include those running for the House of Representatives, the Senate, the President and the Vice President. The Federal Elections Commission was created in 1975 by an amendment to the Federal Election Campaign Act (FECA) 1971. It has the responsibility to disclose campaign finance information, to enforce the provisions of the law such as the limits and prohibitions on contributions, and to oversee the public funding of U.S. presidential elections

The sources of campaign funds are individuals, PACs, corporations, unions, political parties and the government. PACs are private groups which are organized to support election of their chosen political candidates or to advance the outcome of a political issue or legislation. An organization becomes a "Political Action Committee" by receiving contributions or making expenditures in excess of $2,500 for the purpose of influencing a federal election. Direct contributions to a candidate from corporations and labor unions are prohibited. Candidates can obtain government funding to stand in elections if they fulfill the eligibility requirements. The government funding is subject to spending limits. Contributions from all categories are restricted by law. It is a federal crime to evade the donation limits. On January 21, 2010, the U.S. Supreme Court overturned a 20 year old ruling that had previously permitted state laws that prohibited corporations and unions from using money from their general treasuries to produce and run their own advertisements campaign. So now corporations and unions can use their funds for running advertisement campaigns to support their chosen campaigns. Spending limits are no longer applicable to money spent on advertisement campaigns run by unions or corporations. Funding for non-federal offices are governed by state and local law. Over half the states allow some level of corporate and union contributions. Some states have limits on contributions from individuals that are lower than the national limits, while six states (Illinois, Missouri, New Mexico, Oregon, Utah and Virginia) have no limits at all.

Government funding is limited to presidential candidates. In return, the candidate agrees to limit his or her spending according to a statutory formula. From the inception of this program in 1976 up to 1992, almost all candidates who could qualify accepted matching funds in the primary. Since then there have been exceptions like Republicans George W Bush, John McCain, Rudy Giuliani, Mitt Romney, Ron Paul and Democrats John Kerry, Hillary Clinton, Barack Obama, who opted out of the program. By refusing matching funds, candidates are free to spend as much money as they can raise privately. During the mid term elections held in 2010, American corporations were worried that if the Democrats gained adequate majority in the Senate and the House, President Obama would be able to rollback Bush Tax Cuts and further his pro-poor agenda. So they pulled off all stops to raise money. The American Chamber of Commerce planned to spend $75 million on 10 senate and 40 house seats. This represented an increase of $40 million over the money spent on 2008 elections. 15 other pro Republican conservative organizations such as American Crossroads affiliated with Republican strategist Karl Rove planned to spend $300 million in the mid-term elections. The Centre for Public Integrity maintains that five insurance giants, Aetna Inc., Cigna Corp., Humana Inc., United HealthCare Inc. and WellPoint Inc., planned to spend $20 million on close House races. The coal industry also planned to spend millions to defeat environmentalist senators in Kentucky and Tennessee. In contrast, the Democrats had spent only $177 million in the entire of 2008 for congressional races. Money power of the "1 Percent" won in 2010. Republicans were able to wrest control of the House of Representatives from the Democrats and narrowed the majority of the Democrats in the Senate.

With contesting and winning elections becoming as expensive as they are, all over the world, it is becoming increasingly difficult for honest, compassionate and people oriented politicians to win election. Membership of elected bodies all over the world is becoming exclusive privilege of the rich.

Lobbying

Lobbying is the act of attempting to influence decisions made by officials in the government through legislators or members of regulatory agencies. Lobbying involves spending money on researching, writing and convincing lawmakers to vote in the interest of Big Business. Lobbyists run magazines like Fortune and Forbes Asia and commission authors to write books and articles in favor of neo liberal economic policies. Lobbying is also done by various individuals or groups like unions or corporations, fellow legislators or government officials, or interest groups environmentalists or human rights activists. Professional lobbyists are people whose business is trying to influence legislation on behalf of a party who hires them. Individuals and nonprofit organizations like gay rights groups also lobby.

The right of individuals, groups, and corporations to lobby the government is protected by the "Right to Petition" in the First Amendment to the U.S. Constitution. Politicians get indirect financial benefit from corporate lobbyists who contribute to charities or non profit organizations run by them. The corporations also gain as they get a tax deduction on their contribution _._ Some examples are given below:

Boeing lobbied against a rival aerospace company to win a $35 billion government contract to build a new military refueling tanker, allegedly through a donation of $10,000 to Symphony Orchestra of the Johnstown, Pennsylvania. The orchestra was patronized by John Murtha, the late Pennsylvania Democrat who, as a member of the Defense Department's budget committee, held a lot of influence over Pentagon contracting. Boeing also donated to groups that honored, among others, Senate Armed Services Committee Chairman Carl Levin, Democrat from Michigan; Representative. Norm Dicks, Democrat from Washington, then chairman of the Defense Appropriations subcommittee; Marine Gen. James Mattis, currently head of the U.S. Central Command; and Gen. David Petraeus, the incoming CIA director.

Pharmaceutical company Eli Lilly contributed $25,000 to the "Alliance for Aging Research" in 2010 for congressional awards dinner organized by them. Among the awardees was Senator Richard Burr, Republican from North Carolina who is a member of the Senate committee that handles health issues. The same dinner honored the head of the Food and Drug Administration, Dr. Margaret Hamburg, and Senator Bob Casey, a Pennsylvania Democrat on the Senate's health committee.

Toyota contributed $775,000 to the charity arms of the Congressional Black Caucus and Congressional Hispanic Caucus. The company claims that it did not benefit them.

Corporations including Dell Inc., AT&T, Comcast and Fluor Corp contributed more than $808,600 over the two years, towards a golf tournament organized by South Carolina Representative James Clyburn, a member of the Democratic Party's leadership, to fund a scholarship program for high school graduates and college students who live in his district. The congressman allegedly worked to ensure that a Fluor Corporation led partnership received $1.6 billion in federal stimulus funds to decommission two obsolete nuclear weapons reactors and perform other cleanup tasks at the government's Savannah River nuclear weapons facility.

More than $271,700 was donated in 2009 and 2010 for annual charity dinners hosted by Speaker John Boehner, along with Senator Joe Lieberman, and former Washington, D.C. Mayor Anthony Williams. Boehner and Lieberman supported voucher programs that allowed low income students to attend private schools.

The biotechnology giant Monsanto spends millions of dollars every year lobbying the U.S. government to further its own agenda. At least three former Monsanto executives hold high positions of power in the Obama administration. Michael Taylor, senior adviser to the U.S. Food and Drug Administration (FDA), used to be a vice president of Monsanto. Islam Siddiqui, former vice president of the Monsanto funded lobbying group CropLife, is now a negotiator for the U.S. Trade Representative on agriculture. And Roger Beachy, the director of the National Institute of Food and Agriculture, is former director of a plant science center funded by Monsanto.

A study reportedly established that US business spends $4.2bn (£2.6bn) over the four year election cycle on getting their favored politicians elected. Large corporations like to play both sides of the political divide. The biggest beneficiaries could be large pressure groups who are incorporated, such as the pro-gun rights National Rifle Association which has long complained of being muzzled.

American investors, multinationals and their global counterparts are not concerned about the American Economy or the economy of any other countries. They have only one goal, get richer. They are financially powerful and spend billions of dollars lobbying in support of globalization and decontrol of the economy. The oil companies spent about 55 million dollars lobbying against legislations favoring fuel efficient cars and subsidies for development of alternate energies with members of the Senate and House of Representatives during the first six months of 2008. The major contributors were Exxon Mobil $8.1 m, Chevron $6.1 m, BP $5.2 m, and Conoco Phillips $4.4. The industries spent more than $ 614 million on lobbying for favorable legislation and tax breaks during the same period. As per Center for Responsive Politics, the Drugs industry spent $113 million, Insurance industry spent $ 76 million, Electric Utility companies $ 65 million, Computer manufacturers $ 60 million, Oil & Gas industries $ 55 million, private educational institutions $ 51 million, Airlines $ 50 million and Healthcare Industry $ 48 million on lobbying during the first six months of 2008. With politicians and senior policy makers in the administration getting so much money from corporate America as election contributions and perks, it is unlikely that they will act to stop corporate corruption, and stop helping corporations make colossal profits. Lobbying expenditure in India is not that well documented. But it is clear that it is as effective, if not more effective, than in the U.S.

Conclusion

Politicians are only concerned about getting elected and enjoying the perks of office. They require money to get elected and to get rich. Only the rich and the corporations can give them money. So it is very difficult to break the politician-corporation nexus. Only movements like "Occupy Wall Street" or Anna Hazare's "India Against Corruption" can draw the attention of the media and the people to social injustices and corporate corruption, to the pains of unemployment and poverty. The optimists are not even aware that there is a problem. Will the movements against political and corporate corruption succeed? It will if even half the "99 Percent" ordinary citizens of the world can come out on the streets together and stay there till they are heard. It will happen if the "99 Percent" can get together to elect honest politicians who are sympathetic to their cause. The Rational Pessimist laments at the quality of politicians who rule our world.

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Chapter 4: The Realm Of Virtual Wealth

What constitutes wealth? Unfortunately, there is no universally accepted definition of wealth. To a lay man, individual wealth consists of money (cash), valuable possessions like gold, gems and jewelry, land and buildings, and stocks, shares, bonds, debt and other modern investments. The wealth of individuals is constantly changing. However, it is interesting to note the various nuances of wealth.

Money is essential for survival. It enables us to buy goods and services that we need or that we want. When we have more money than what we need, we have an investable surplus. Thus capital is formed. This capital can remain deposited in banks or be used for producing goods and services or for speculation. When it is used for producing goods and services, we generate employment and profits and some times losses. When capital is profitably used for speculation, it does not generate employment but more capital. When there is more capital than what can be used to buy goods and services we have a serious problem. When we have too much money chasing too few goods and services, we have inflation. When we have too much money chasing too few speculative or investment opportunities in stocks, shares, debt, property, commodities etc, we have bubbles. When these bubbles burst, there is a financial meltdown.

Real Wealth

Cash or Legal Tender

The first element of real wealth is cash or the legal tender. A dollar currency note or coin remains a dollar over the years. But its purchasing power is always changing. Most of the time, the purchasing power of money within a country keeps reducing due to rise in prices of goods and services or inflation. To compensate for the rise in the cost of goods and services, incomes have to be increased.

When money is used for purchasing goods and services from outside the country, an exchange rate comes into play to convert the currencies of the importer and exporter countries. The purchasing power of a currency may increase in a foreign country if the currency of the foreign country is devalued. The converse is also true. For example, in 2005, one Singapore dollar was equal to 30 Rupees. Today one Singapore dollar is equal to 40 Rupees. Exchange rate of currencies is one of the reasons for the so called wealth of developed nations. One US dollar is equal to about 50 Indian Rupee or 6 Chinese Yuan. The exchange rates are constantly changing. There is no mathematical logic behind these figures. The exchange rate is supposed to be determined by demand and supply. However, in many countries like India and China, the exchange rate is totally or partially fixed by the government to suit its trading requirements. To illustrate the point let us compare the GDP of United States and China. The GDP of the United States in 2010 was about 14.6 trillion dollars US. The GDP of China in 2010 was 5.87 trillion dollars US. Thus if China changed its conversion rate from 6 Yuan per dollar to 2 Yuan per dollar, it would immediately become the largest economy in the world.

Gold, Precious Metals and Stones

The second part of the wealth is gold and precious stones and precious metals. Their value tends to constantly rise over the years. In 1971 the price of one oz (25g) of gold was $40. In September 2011 it rose to over $ 1900, an over 47 times increase in 40 years. It has now fallen to a little above $1700 but may rise again. The prices of gems and other precious metals have also been increasing though the increase is not uniform or comparable with gold.

Land and Property

The third part of wealth comprises of land and property. Price of land has been increasing all over the world. There may be short term fall in prices of land after financial meltdowns but the prices rebound within 10 to15 years. In rare cases, specific portions of land may see a reduction in value due to ecological degradation or political unrest. However, the cost of the building itself usually reduces due to aging or due to damage in natural disasters.

Conclusion

The value of real wealth like cash, gold, precious metals, precious stones and property may increase or decrease with time. But real wealth can not disappear suddenly by itself while we are sleeping. It has to be physically removed. Cash and other valuables may be lost, stolen or robbed. Cash in a bank may be partly lost if a bank fails. Cash and property may be lost during wars or natural disasters. But one can insure oneself loss of real wealth. Only cash or credit cards can be used to buy goods and services.

Virtual Wealth

The fourth part of wealth is stocks, shares and other financial instrument. Their value is always fluctuating and unreal. They have a face value, a book value and a market value. It is this so called market value that is used to calculate the value of ones holding of stocks, shares and other financial instrument at any given time. The market value changes by the minute. When the markets crashed in 2008, the total value of the stocks listed at around the world reportedly fell by about 35 trillion US dollars. Stocks, bonds and other financial investment instruments can become junk or valueless if the company or bank collapses or is declared bankrupt. It will thus be seen that wealth represented by stocks, shares and other financial instruments are unreal. They only become real wealth when they are sold and converted to cash. The "market capitalization" figure or the value of all stocks of companies listed in a stock exchange is a meaningless notional figure. The sum can never be realized because stocks and shares are converted to real money only when they are sold and any large sale reduces the price.

The evolution of stocks or shares was a welcome and essential step in the economic development of the world. A joint stock company is a company or business organization involving two or more individuals that own a part (share) of the capital or investment (stock). Certificates of ownership called "shares" are issued by the company in return for financial contribution. The shareholders are free to transfer their ownership interest in the company at any time by selling their shareholding to others. In modern company law, the company possesses a legal personality separate from shareholders. The shareholders are only liable for the company's debts to the value of the money they invested in the company. Today joint stock companies are commonly known as corporations or limited companies. The earliest joint stock company was reportedly formed at Toulouse, France in 1250. The Swedish company Stora is reported to have undertaken a stock transfer in 1288. The evolution of the joint stock company was the major driving force for overseas trading and expeditions to Asia, Africa and the Americas. The risk in such ventures was colossal. But it was shared by the shareholders and limited to their investment. So there was no risk of going bankrupt. The amounts that could be raised were also much more than what could be raised by individuals. The joint-stock company thus became a more viable financial structure than previous "guilds" or state regulated companies. The share holders of the company received a share of the profits made by the company called dividends. Joint stock companies were also the driving force behind the industrial revolution. Money could be raised easily for commercializing new inventions and innovation by setting up factories or developing sources for raw materials like mines and plantations. Once stocks and shares became the order of the day, the Stock Markets where the shares could be bought and sold evolved. The London Stock Exchange was established in 1802. Soon stock exchanges were established in all the European capitals. The New York Stock exchange was established in 1863. It is by far the world's largest stock exchange. The market capitalization of the companies listed was about US $13 trillion in Dec 2010. Average daily trading value was approximately US$153 billion in 2008.

Man was not satisfied with money made from dividends. Gain or loss of wealth was too slow for the businessmen and investors working on a fast track. Speculation in shares and other financial instruments of companies became the name of the game. Value of shares was no longer restricted to its real value, i.e. the book value. Notional values based on future earnings, brand names, taxation policies etc. entered the market. Gambling or speculation as it is called in the economic world, was permitted on a large scale, preferably with money that belonged to others, the unsuspecting gullible ordinary retail investors, pension funds or obliging banks. Fortunes are now made or lost in moments.

Panic of 1873

The first major stock market crash in the world was in 1873. It goes by the name of the Panic of 1873 in the United States and the "Long Depression" in Europe. The panic was the result of two events. One was the fall in the international demand for silver. In 1871, Germany defeated France in the Franco-German War and extracted compensation in gold. It simultaneously ceased minting silver coins. The German action created great financial turmoil in Europe. A number of Viennese banks failed. This resulted in a contraction of the money available for business lending. On May 9, 1873, the Vienna Stock Exchange crashed. In Britain the long depression resulted in bankruptcies, escalating unemployment, a halt in public works, and a major trade slump that lasted until 1897.

The second event was the passing of the Fourth Coinage Act by the United States Congress in 1873. It embraced the gold standard and demonetized silver. This reduced the demand for American silver and caused silver prices to fall. This in turn resulted in reduction in money supply. There was a rise in interest rates, thereby hurting farmers and anyone else who normally carried heavy debt loads. This perception of instability in United States monetary policy caused investors to shy away from long term investments, particularly long-term bonds.

The situation was compounded by the railroad boom, which was in its later stages at the time. The American Civil War was followed by a boom in railroad construction. 56,000 miles (90,000 km) of new track were laid across the country between 1866 and 1873. The railroad industry involved large amounts of money and risk. A large infusion of cash from speculators caused abnormal growth in the industry as well as overbuilding of docks, factories and ancillary facilities. At the same time, too much capital was invested in stocks of companies offering no immediate or early returns. In September 1873, Jay Cooke & Company, a major investment bank was unable to market several million dollars in Northern Pacific Railway bonds. On September 18, the firm declared bankruptcy. The failure of the Jay Cooke Bank set off a chain reaction of bank failures. Factories began to lay off workers as the United States slipped into depression. The New York Stock Exchange remained closed for ten days starting September 20. Out of the country's 364 railroad companies, 89 went bankrupt. A total of 18,000 businesses failed between 1873 and 1875. Unemployment reached 14% by 1876. Construction work halted, wages were cut, real estate values fell and corporate profits vanished.

**Stock Market Crash: 1901 – 1903**

The main cause of this stock market crash was an investor's effort to gain control of Northern Pacific Rail Road Company by buying up its stock. The panic began when the market suddenly crashed one afternoon in May. Panic selling did the rest of the damage. This crash was aggravated by the assassination of President William McKinley on September 6, 1901 and a severe drought that caused alarm about US food supplies. It started on June 17, 1901 and ended on November 9, 1903. DJIA fell from 57 to 31. Investors lost about 46%. As a result of the panic, thousands of small investors were ruined.

**Stock Market Crash: 1906-1907**

This crash is also known as the Panic of 1907 or the 1907 Bankers' Panic. It was a financial crisis that occurred in the United States when the DJIA fell almost 50% from its peak in 1905. It started on January 19, 1906 and ended on November 15, 1907. The DJIA fell from 75 to 39. Investors lost about 48% of their investment. The crash started due to gloomy sentiments in corporate circles due to President Theodore Roosevelt's antitrust drive. President Roosevelt, though a Republican, had established the Progressive Party. He asked the Congress to curb the power of large corporations (called "trusts") and aggressively implemented the Sherman Act of 1890 that sought to stop formation of monopolies, cartels or trusts to fix outputs, prices and market shares. He passed consumer protection acts to stop unethical profiteering.

The crisis was aggravated by the failed attempt by some investors to corner the market on the stocks of the United Copper Company in October 1907. When this bid failed, banks that had lent money to the cornering scheme suffered runs. That led to the downfall of the Knickerbocker Trust Company, New York City's third largest trust. The collapse of the Knickerbocker Trust spread fear throughout the city's trusts as regional banks withdrew their deposits from New York City banks. Panic extended across the nation as vast numbers of people withdrew deposits from their regional banks. The panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. The situation was aggravated by lack of market liquidity and a loss of confidence among depositors. The situation was eased by the intervention of financier J. P. Morgan, who pledged large sums of his own money to shore up the banking system, and convinced other New York bankers to do the same. At the time, the United States did not have a central bank to inject liquidity back into the market. By November 1907, the crisis had largely ended. The following year, a commission to investigate the crisis proposed future solutions, leading to the creation of the Federal Reserve System.

**Stock Market Crash: 1916 – 191**

This crash followed the US being drawn into World War 1. It started on November 19, 1916 and ended on December 19, 1917. DJIA dropped from 110 to 66, a loss of about 40%.

**Stock Market Crash: 1919 – 1921**

This crash was the result the bursting of the first big tech bubble, the automobile sector. It started on November 3, 1919 and ended on August 24, 1921. The DJIA dropped from 119 to 64. Investors lost 46% of their investment.

**Stock Market Crash: 1929**

This stock market crash was the starting point of the Great Depression. The economic boom known as the "Roaring Twenties" led millions of Americans to invest heavily in the stock market, even borrowing money to buy more stock. Banks happily lent heavily to fund this share buying spree. This massive investment drove share prices up to artificially high levels. The rising share prices encouraged more people to invest, as they hoped the shares would rise further. This fuelled further rises, and created an economic bubble. On September 4, 1929, the stock market hit an all-time high. On October 24, 1929 (with the Dow just off its September 4 peak at 381), the bubble finally burst and panic selling set in. Thirteen million shares were sold in the space of one day. The crash dramatically worsened an already fragile economic situation. The crash ended on November 13, 1929. During the period, the DJIA fell from 381 to 198. Investors lost about 48% of their investment. In total, 14 billion dollars of virtual wealth were lost during the market crash. After the crash, the stock market mounted a slow comeback. By the summer of 1930, the market was up 30% from the crash low.

Some analysts maintain that the stocks were heavily overbought when the crash came. The crash may have been triggered by the Fed aggressively raising interest rates on broker loans. The margin requirements were very low. At the time of the crash, you needed to put down only 10% cash in order to buy stocks. This enabled people to buy much more shares than they could pay for. When the prices began to fall they could not sell to payoff their debts without making large losses. Many went bankrupt.

Banks were almost unregulated. There were few Federal restrictions on start-up capital requirements for new banks. As a result, many banks had a very poor capital base. These banks started to invest heavily in the stock market. When the market started to crash, they did not have the capital or liquidity to absorb the losses. By 1932, 40% of all banks in the United States had gone out of business. Some reforms were enacted after the crash to avoid similar crashes. The Securities and Exchange Commission (SEC) was established to regulate the stock markets. The Glass-Stegall Act was passed to separated commercial and investment banking activities. However, starting with the Regan Presidency, the Fed and banking regulators have diluted some of the provisions of the Glass-Stegall Act. So banks around the world remain the most fragile economic institutions.

**Stock Market Crash: 1930-1932**

This was the worst stock market crash in American history. It started on April 17, 1930 and lasted till July 8, 1932. Dow Jones Industrial Average dropped from 294 to 41. Investors lost 86% of their money. This market crash combined with the 1929 stock market crash made up the Great Depression. The full recovery didn't take place until 1954, 22 years later. In 1933, the Federal Deposit Insurance Corporation (FDIC) was established to insure individual bank accounts for up to $100,000.

**Stock Market Crash: 1937-1938**

This was a legacy of the Great Depression. It was triggered by war scare and Wall Street scandals. It started on March 10, 1937 and ended on March 31, 1938. The DJIA fell from 194 to 99. Investors lost about 49% of their investment.

**Stock Market Crash: 1939 \- 1942**

This crash followed the Japanese attack on Pearl Harbor during the World War II. It Started on September 12, 1939 and ended on April 28, 1942. The DJIA dropped from156 to 93, a loss of about 40 %.

**Stock Market Crash: 1973-1974**

The crash of 1973-1974 was actually a gradual "bear market" slide. It started on January 11, 1973 and ended on December 6, 1974. DJIA fell from 1051 to 577, a loss of about 45%. It affected all the major stock markets in the world, particularly the United Kingdom which lost 73%. The crash came after the collapse of the Bretton Woods system of international currency exchange system and the devaluation of the United States dollar by President Nixon. It was compounded by the outbreak of the 1973 oil crisis in October of that year.

**Stock Market Crash 1987**

Stock markets around the world crashed on October 19, 1987. The crash began in Hong Kong and spread west to Europe, and the United States. By the end of October, stock markets in Hong Kong had fallen about 45%, Australia about 41%, Spain about 31%, the United Kingdom about 26%, and the United States about 22%. The DJIA did not regain its August 25, 1987 closing high of 2,722 points until almost two years later.

The most popular explanation for the 1987 crash was selling by "Program traders." In program trading, computers perform rapid stock executions based on external inputs, such as the price of related securities. Once the market started going down, the writers of the derivatives were "forced to sell on every down-tick" so the "selling would actually cascade instead of drying up".

**Stock Market Crash 2000-2002**

This crash was caused by the bursting of the second Tech bubble or the dot.com bubble. September 11 terrorist attack also played its part. It started on January 15, 2000 and ended on October 9, 2002. The DJIA dropped from 11,793 to 7,286, a total loss of about 38%. It is estimated that $5 trillion to $8 trillion of virtual wealth was destroyed in the crash

The primary cause of the crash was corporate malpractices. Many companies fraudulently inflated their profits and used accounting loopholes to hide their debt. There were numerous examples of companies making significant operating losses with no hope of turning a profit for years to come, yet sporting a market capitalization of over a billion dollars. The second reason was the growth in the tribe of "Day Traders" and "Momentum Investors". The advent of the Internet enabled online trading which was a new, quick, and inexpensive way to trade the markets. This revolution led to millions of new investors and traders entering the markets with little or no experience. They lost the most.

The lay investors and even some professionals were misled by the ratings agencies. It was common practice for the rating agencies to issue favorable ratings on stocks for which their client companies sought to raise capital. In some cases, companies received highly favorable ratings, even though they were actually in serious financial trouble. The 9/11 terrorist destruction of the World Trade Center's Twin Towers, killing about 3000 people, accelerated the stock market crash. The NYSE suspended trading for four sessions. At least 10 "dot.com" companies went bankrupt. Some names are boo.com, e.Digital Corporation, freeinternet.com, govworks.com, pets.com, open.com, worldcom (its CEO was convicted of fraud and conspiracy).

Stock Market Crash 2007- 2008

Dow saw an all time peak of 13930 in August 2007 just before the "Sub Prime" problem surfaced. The NASDAQ had a peak of 2810 in 2007. S&P 500 had a peak of 1561 in 2007. Beginning October 6 and lasting all week the DJIA closed lower for all 5 sessions. Volume levels were also record breaking. The DJIA fell over 1,874 points, or 18%, in its worst weekly decline ever on both a point and percentage basis. The S&P 500 fell more than 20%. On October 8, the Indonesian stock market dropped 10% in one day. Iceland's stock market fell 77% on 14 October, when three big banks were on the verge of bankruptcy. Failures of major U.S. banks including Lehman Brothers on September 16th 2008 resulted in a global financial crisis that affected banks throughout Europe. The failure of banks throughout the world hit the stock market badly. The US stock market lost 21% of its value that week. October 24th also saw indices around the world drop around 10% in one day. The UK stock markets were also badly hit. From early September to mid October 30% had been wiped off the value of the FTSE 100.

Since January 2008, investors around the world watched with growing alarm as the U.S. economy struggled to right itself amid massive home foreclosures. Many of the foreclosures were mortgages issued to homeowners with poor credit profiles. The turmoil swallowed some of the most well known names on Wall Street. Three of its five major investment banks, Bear Stearns, Lehman Brothers and Merrill Lynch, either collapsed or was taken over by another bank. The government agreed to an $85 billion loan to prop up mega insurer AIG.

The U.S. Federal Reserve under the Bush Administration was very stock market friendly and spent billions of dollars of taxpayer's money to shore up the stock market. The market rebounded on Sep 18 due to injection of $247 billion by the U.S. Federal Reserve, the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Canada and the Bank of Japan. In addition, the Federal Reserve acted to ease a spike in overnight lending rates in the U.S. by injecting $55 billion into the domestic banking system. It made available $100 billion to major banks in March 08 in new credit. This was on top of $160 billion in short term loans it has extended in occasional auctions since December 2007. The Fed also cut interest rates to 1.5% in an increasingly desperate effort to stimulate the financial markets. The Fed changed its lending rules to bailout the Investment bank, Bear Sterns. The Federal Reserves takeover of Freddie Mac and Fannie May boosted stock prices worldwide. But the effect was short lived and markets fell further.

The economic collapse of the Wall Street was triggered by the "Housing Crisis" or the "Sub-Prime Crisis". The US housing industry was on a roll till 2006 on the back of easy credit. Then, the sudden tightening of

credit on high risk sub-prime mortgages led to a property price crash in the U.S., with devastating effects on the whole economy. The unprecedented decline in US house prices led to collapse of many banks and financial institutions in the US and Europe, who collectively owned more than $ 5 trillion worth of sub-prime debt. The Bank of America recorded a loss of $5.28 billion. The loss amount for Morgan Stanley has been $10.3 billion. The loss for Bear Stearns amounted to $2.6 billion. The loss amount for Citigroup has been $24.1 billion while that for Merrill Lynch stands at $22.5 billion.

The magnitude of the economic crisis was the worst since the great depression. There is nearly a year's supply of unsold houses standing vacant. The property prices have actually fallen 25 to 60 % in 2008. The prices have not risen appreciably even in 2011. A wave of foreclosures and evictions is sweeping the United States in the wake of the sub-prime mortgage lending crisis. Almost 740,000 US homes entered the foreclosure process in the second quarter of 2008. There could be 10 million Americans owing more on their mortgages than their homes are worth and that number is expected to increase.

The DJIA has regained most of its lost ground. The corporations are flush with liquidity and profits. But banks and the people are in serious difficulties. As per FDIC, 140 banks failed in 2009, 155 banks failed in 2010 and 90 banks had failed till the middle of 2011. Official unemployment remains at 9.1 %.

Conclusion

The total virtual wealth in the world, by some estimates, is around $35 trillion. Of these, $9.3 trillion of virtual wealth vanished in 2009. The investors lost another trillion dollars on August 8, 2011. There are the life changing stories of investors who have lost lots of money. A retired teacher from Dearborn, Michigan, had to take a part time teaching job to avoid dipping into her retirement account, which has lost a third of its value. A 61 year old retiree has lost half a million dollars in his pension plan. At 59, a computer analyst has seen his stock holdings dwindle from $1.2 million to $500,000. Ordinary investors are not the only ones who lost. America's 25 biggest billionaire losers of 2008 lost a combined $167 billion. Anil Ambani of India lost $30 billion in one year. Steel tycoon Lakshmi Mittal and Indian realtor KP Singh lost more than $20 billion apiece. Jeff Bezos of Amazon.com has lost over $10 billion. Losing virtual wealth does not seem very difficult.

Optimists are still in favor of investing in the stock market. The Rational Pessimist laments at the unbridled growth of virtual wealth in our world and the craze for it even among ordinary citizens. He does not invest is stocks but in gold.

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Chapter 5: American Intervensionism

United States emerged from World War II as the world's number one superpower. It had half the world's gold and was rich enough to finance the post war reconstruction in Europe and Japan. It was paranoid about the spread of communism and vowed to militarily intervene to stop its spread anywhere in the world. It fought the Korean War (1953-57) under the United Nation's flag. Thereafter it adopted a unilateral approach and intervened militarily in many countries. The most disastrous of these interventions was the Vietnam War which started under President Eisenhower, escalated under President Johnson and ended under President Nixon.

Vietnam

The French colonial rule of Indochina ended with France's defeat by Vietnamese Nationalists at the Battle of Dien Bien Phu on 7 May 1954. As per the peace agreement that followed at the Geneva Conference, Vietnam was temporarily partitioned at the 17th Parallel creating the two countries of North and South Vietnam. Elections throughout the country were to be held in 1956 to establish a unified government. United States installed Emperor Bao Dai as the ruler of South Vietnam. In June 1955, South Vietnam refused to hold elections. President Eisenhower supported the decision saying that "80 per cent of the population would have voted for the Communist Ho Chi Minh" over Emperor Bao Dại. North Vietnam refused to accept partitioning of Vietnam and commenced hostilities to unite the country by force. Thus started the Vietnam War that was to engulf Vietnam, Laos and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. Americans carpet bombed North Vietnam. They intentionallly bombed and destroyed many villages in South Vietnam. The military commanders said, "It was necessary to destroy the village to save it" They used napalm on military and civilian targets. They used chemical warfare in the form of "Agent Orange" on forests and crops. There was "Mai Lai"and other massacres of civilians including women and children. Execution and torture of prisoners was common. Americans won every battle but lost the war.

Nationalism, local support and will to fight of the North Vietnamese and Viet Cong defeated air superiority and overwhelming firepower of the United States and its allies. North and South Vietnam were reunified the following year and have lived happily ever after. The war exacted a huge human cost in terms of fatalities. Estimates of the number of Vietnamese soldiers and civilians killed vary from about one million to more than three million. Some 200,000 to 300,000 Cambodians, 20,000 to 30,000 Laotians, and 58,220 American military personnel died in the conflict and about 350,000 American soldiers were wounded. According to the United States government's Congressional Research Service, the Vietnam War cost the United States the equivalent of $662 billion, in today's dollars, between 1965 and 1975. It led to the devaluation of the dollar, and forced President Nixon to abandon the "gold standard". Hundreds of thousands of South Vietnamese who had collaborated with US were killed or jailed. Hundreds of thousands sought refuge in the US or became the "Boat people".

The Balkans

United States intervened in the War in Bosnia as a part of NATO in 1995 during the Presidency of Bill Clinton. The Bosnian War was an international conflict that took place between April 1992 and December 1995. The war came about as a result of the breakup of Yugoslavia in 1991. The multi-ethnic Bosnia and Herzegovina passed a referendum of independence on 29 February 1992. This was rejected by Bosnian Serbs, who had boycotted the referendum and established their own republic. Following the declaration of independence, Bosnian Serb forces, supported by the Serbian government and army attacked Bosnian Muslims. Thus war broke out and the ethnic cleansing of the Muslim Bosnian population took place. The war was characterized by bitter fighting, indiscriminate shelling of cities and towns, mass killing and systematic rape. An U.N. Protection Force was deployed in 1994 to stop the mayhem and a no fly zone was imposed with the help of NATO. NATO provided close air support to the UN Protection Force. The war ended on December 21, 1995. It is believed that about 100,000 people, mostly civilians died during the war. Over 2.2 million were displaced. That made it the most devastating conflict in Europe since the end of World War II.

The United States next intervened in Kosovo as a part of NATO under President Clinton in 1999. Kosovo, a province of Serbia with an Albanian ethnic majority, was having an insurgency by the Kosovo Liberation Army (KLA) since 1992. KLA attacks and Serbian reprisals continued till the winter of 1998–99. In 1999, NATO decided that the conflict could only be controlled by introducing a military peacekeeping force under the auspices of NATO, to forcibly restrain the two sides. The NATO thus tilted towards the KLA, which it had earlier declared a terrorist organization. On March 18, 1999, the Albanian, American, and British delegations signed what became known as the Rambouillet Accord. The accords called for NATO administration of Kosovo as an autonomous province within Yugoslavia, deployment of a force of 30,000 NATO troops to maintain order in Kosovo, unhindered right of passage for NATO troops on Serbian territory, including Kosovo, and immunity for NATO and its agents to Yugoslav law. The conditions were not accepted by Russia and Serbia as they amounted to violation of Serbia's sovereignty. On March 23, the Serbian assembly accepted in principle the autonomy for Kosovo and non-military part of the agreement but not the conditions of the agreement. The following day, March 24, NATO bombing of Serbia began. NATO's bombing campaign lasted from March 24 to June 11, 1999, involving up to 1,000 aircraft operating mainly from bases in Italy and aircraft carriers stationed in the Adriatic Sea. Over the ten weeks of the conflict, NATO aircraft flew over 38,000 combat missions destroying Serbian military targets and infrastructure. On the ground, the ethnic cleansing campaign by the Serbian Army was stepped up and within a week of the war starting, over 300,000 Kosovo Albanians had fled into neighboring Albania and the Republic of Macedonia, with many thousands more displaced within Kosovo. By April, the United Nations was reporting that 850,000 people, mostly Albanians, had fled their homes. NATO aircraft now started attacking Yugoslav units on the ground, hitting targets as small as individual tanks and artillery pieces. The strategic bombardment of Serbia also continued. On May 7, NATO bombs hit the Chinese Embassy in Belgrade killing three Chinese journalists and outraging Chinese public opinion. The bombing strained relations between China and NATO countries, and provoked angry demonstrations outside Western embassies in Beijing. Serbian President finally recognized that NATO was firm in its resolve to impose autonomy in Kosovo and that Russia would not intervene to defend Serbia. On June 3, 1999, the Serbian president accepted the terms of an international peace plan and withdrew his forces from Kosovo. Kosovo remained an autonomous territory till it declared independence on 17 February 2008. 76 out of 198 countries led by the United States have recognized it. It has also become a member country of the IMF and World Bank as the Republic of Kosovo. It is not a member of the UN because Russia would veto the application.

Afghanistan

King Amanullah Khan of Afghanistan began to modernize and secularize his country on the lines of Turkey in 1927. He drew up Afghanistan's first constitution, made elementary education compulsory, abolished the traditional Muslim veil for women and opened a number of co-educational schools. The reforms quickly alienated many orthodox Muslim tribal and religious leaders. Amanullah Khan was forced to abdicate in 1929. He was succeeded by his son King Nadir Shah, who abandoned the reforms of his father in favor of a more gradual approach to modernization. Nadir Shah's son Zahir Shah promulgated a liberal constitution in 1964 which provided for a legislature with elected and nominated deputies. Zahir Shah's "experiment in democracy" led to the formation of the People's Democratic Party of Afghanistan (PDPA) which had close ideological ties to the Soviet Union. In 1967, the PDPA overthrew the king, Zahir Shah and assumed power. The PDPA made a number of reforms on women's rights like banning forced marriages, giving women the right to vote, right to work and introducing women to political life. The PDPA invited the Soviet Union to assist in modernizing Afghanistan's economic infrastructure (predominantly its exploration and mining of rare minerals and natural gas). The USSR sent engineers and contractors to build roads, hospitals and schools and to drill tube wells. Soviets also trained and equipped the Afghan army. Afghanistan was progressing economically and modernizing.

In their zeal to achieve a secular inclusive society with communist ideology, the PDPA imprisoned tortured or murdered thousands of members of the traditional elite, the religious leaders, and the orthodox Muslims of the country who opposed their reforms. The communist ideology, secular nature of the government and its heavy dependence on the Soviet Union made it unpopular with a majority of the Afghan population. Repressions plunged large parts of the country, especially the rural areas, into open revolt against the PDPA government. In 1978, Soviet troops entered Afghanistan in support of the PDPA government. By spring 1979 unrests had reached 24 out of 28 Afghan provinces including major urban areas. Over half of the Afghan army had either deserted or joined the insurrection. The United States saw the situation as an opportunity to weaken the Soviet Union. In 1979, as part of a Cold War strategy, it began to covertly fund and train anti-government, Islamic fundamentalist, Mujahideen forces through the Pakistani secret service known as ISI. The United States and Saudi Arabia provided as much as $40 billion in cash and weapons to Islamic groups fighting against the Soviet Union. A ten year civil war ensued killing between 600,000 to 2,000,000 Afghans, mostly civilians. About 6 million fled as refugees to Pakistan and Iran. Soviets were forced to pull out of Afghanistan in 1989. Afghanistan became an Islamic State in 1992. But peace did not return. Taliban and Al Qaeda fought the other tribal groups and took over most of Afghanistan by 2001. The Taliban massacred thousands of civilians while trying to consolidate control over northern and western Afghanistan. They introduced Sharia law in the areas they controlled, banned women's education and confined women to their homes. Afghanistan returned to pre 1927 days of social orthodoxy. It is still bleeding.

Lebanon

The United States intervened in Lebanon as a part of an international peace keeping force called the Multi-National Force (MNF) consisting of about 1200 United States Marines, 1500 French Paratroopers and 1400 Italian troops in 1982 during the Regan Presidency. The intervention was to help Israel pull back from its occupation of south Lebanon. Their mission was to help the new Lebanese government and army in maintaining order. However, the MNF increasingly came under fire from Muslim factions of the Lebanese Civil War. On April 18, 1983, the United States embassy in West Beirut was bombed, killing 63 people. In August 1983, the Marines at the Beirut airport were repeatedly shelled by members of Shiite Muslims and Druze militia. Several Marines were killed and others wounded. In response, the United States warships shelled Shiite and Druze positions near Beirut. The MNF was given a devastating blow on October 23, when a truck bomb driven by suicide bombers hit the Marine and French Paratrooper barracks in Beirut, killing 241 American servicemen and 58 French soldiers. The MNF suffered its largest number of casualties in this incident and drew calls at home to withdraw from Lebanon. But, President Reagan ruled that the Marines would stay. Skirmishes started again on December 4, 1983, between the American forces and Iranian Revolutionary Guards and Syrian troops in the Becca Valley. United States aircraft targeted Syrian missile batteries in the mountains east of Beirut. The Syrian surface to air missiles shot down two American planes. Violent incidents resulting in loss of American lives continued. President Regan finally gave in to pressure from the Congress and ordered withdrawal of American forces in February 1984. The United States lost 265 soldiers in Lebanon. 159 were wounded. After the MNF withdrew, the Lebanese factions were able to sort out their differences. Barring occasional political violence and assassinations and another fire fight with Israel, peace and prosperity has prevailed in Lebanon after the withdrawal of United States forces.

Somalia

Somalia had been an Italian colony. In 1949 it was granted partial independence with Italy retaining a nominal trusteeship of Somalia for the next 10 years. The 1950s were something of a golden age for Somalia. With UN aid money pouring in, and experienced Italian administrators to manage the country, infrastructural and educational development bloomed. As scheduled, Somalia was granted independence in 1960. By the late 1960s, the Somali democracy began to crumble. The ruling party lost the elections in 1969. A bodyguard killed the president. The military took control. Mohammad Siad Barre was installed as the new president. Under Soviet influence, Somalia became a one party state in 1971. In 1977 the Somali president, Siad Barre, started a war to recapture Ogaden Desert from Ethiopia. By September 1977, Somalia controlled all of the Ogaden and some parts of Ethiopia. Then the tide turned. In northern Somalia, Muslim rebels destroyed administrative centers and took over major towns. Both Ethiopia and Somalia were affected by droughts and famines during the 1980s. With worsening conditions in Somalia, the Muslim rebels attacked Mogadishu and on January 26, 1991, Barre's government was removed from power. But civil war continued.

In 1992, U.N. peacekeepers led by the United States intervened to ensure that humanitarian aid was properly distributed and to ensure peace in Somalia until the humanitarian efforts could be transferred to the U.N. Many consider that United States stepped in to gain control of the country so that American oil companies, who had been granted concessions for oil explorations, were able to operate. Between June and October 1993, several gun battles took place in Mogadishu between local gunmen and peacekeepers. These clashes resulted in the death of 24 Pakistani and 31 US soldiers, most of who were killed in the Battle of Mogadishu. Around 1000 Somali militia men were killed in that battle. The UN peace keepers withdrew on March 3, 1995. Somalia descended into a civil war between an alliance of mostly secular Mogadishu based warlords armed and funded by CIA and the Sharia law oriented Islamic Courts Union (ICU). By June 2006, the ICU succeeded in capturing the capital, and drove the warlords out of Mogadishu. The United States persuaded Ethiopia to intervene in support of the secular forces of Somalia. The ICU tried to force the Ethiopians off Somali soil. However, they were defeated in all major battles and forced to withdraw to Mogadishu. On December 27, 2006, the leaders of the ICU resigned. Once the ICU was routed from the battlefield, their troops dispersed to begin guerrilla warfare against Ethiopian and Somali government forces. That war still continues. Ethiopian forces have withdrawn but a peace keeping force of the African Union and Kenyans have taken their place. Secularist forces hold on to Mogadishu while the Islamists control the countryside. Somali pirates keep seizing ships and securing ransoms. After 20 years of interventions, providing military assistance and fighting, Somalia remains a failed state even today. Is Somalia better off today than it was in say 1980 or even 1991?

Iraq

After the collapse of the Soviet Union in 1991, one may have hoped that the United States will be less interventionist. But that was not to be. In 1990, Iraq under Saddam Husain attacked and captured Kuwait and destroyed its oil producing facilities. This led to a large increase in crude oil prices. The United States, under President George Bush Sr. led a coalition force from thirty four nations in an U.N. authorized war to liberate Kuwait. The actual fighting lasted just five days before Saddam capitulated. Cease fire was signed in February 1991. Coalition casualties were negligible. The cost of the war was about $ 60 billion. Of this, $ 36 billion was paid by Saudi Arabia.

Iraq under Saddam Husain in 2003 was a peaceful, modern, secular and prosperous country. But President George Bush wanted to replace the regime because it was assisting the Palestinians' in their struggle against Israel. He also had an eye on Iraq's oil. So, on March 20, 2003, United States and its allies started Operation Enduring Freedom, the military invasion of Iraq to rid the country of the tyrant, Saddam Husain and bring democracy to Iraq. Baghdad fell on April 9, ending President Hussein's 24 year rule. Much of Bagdad and other major cities and Iraqi infrastructure were destroyed in air attacks and artillery fire during the war. On April 15, 2003, the coalition claimed total victory. Saddam Hussein was located, captured, tried and hanged. During the invasion phase of the war (March 19-April 30), 9,200 Iraqi combatants were killed along with 7,299 civilians. However, peace has not returned to Iraq. The insurgency aimed at forcing US and allied forces out of Iraq and sectarian conflict for political power between Kurds, Shiias and Sunnis continues even today. Over 5000 American soldiers have been killed and over 50,000 have been wounded. The civilian casualties are estimated to be between 100,000 to 200,000 and rising. Most of Iraqi industries and infrastructure has been decimated. Unemployment and poverty abounds. Sectarian violence and suicide bombings are routine occurrence. American troops are expected to pull out at the end of December 2011. American companies may have to follow if they are attacked. A prosperous country has been ruined by American intervention.

War on Terror

On September 9, 2001, Al Qaeda terrorists attacked targets in the United States and forced it to intervene militarily in Afghanistan and launch its "War on Terror". The battle for Afghanistan continues between the secular forces of the United States, NATO and the Afghan government on one side and the Muslim fundamentalist forces of Al Qaeda and Taliban on the other. The people of Afghanistan continue to suffer. Cold War and the War on Terror have reduced a progressive prosperous nation to a war ravaged, regressive and poverty stricken country. Afghanistan is not a part of a better today.

As per budget studies at the Centre for Strategic and Budgetary Assessments in Washington, the U.S. spent around $400 billion between Sept. 11, 2001 and the end of the 2006 fiscal year under the heading of "fighting terrorism." The US will have spent at least $670 billion by the end of the year 2007 on the War on Terror, more than on the whole of the Vietnam War. The cost of the "War on Terror" has crossed 1.3 trillion dollars by 2011. Who knows how long the war will last and how much it will cost the United States?

Putting Terrorism in Perspective

According to the United States, and the United Kingdom, terrorism and weapons of mass destruction are the greatest threats of the 21st Century. Since September11, 2001, when President Bush launched his "War on Terror", the United States and United Kingdom have spent, according to different estimates, between $ 1.5 trillion and $ 3.7 trillion in fighting terrorists around the globe and eliminating weapons of mass destruction in Iraq. In addition, the United States has spent another about $ 500 billion during the same time period on the Department of Homeland Security. Over three thousand American and British soldiers have died in the wars and more continue to die every day. It is time we put the "War on Terror and Weapons of Mass Destruction" in the right perspective.

Total People killed in the USA and UK by terrorism or weapons of mass destruction from 2000 to 2006 is estimated to be 2804 (2,752 on 9/11 and 52 on 7/7 London bombings). Even if we take major terrorist strikes in Russia (Attack on Beslan School killed around 200, attack on Moscow theatre killed around 150, suicide attack on Moscow metro killed around 50), India excluding Jammu and Kashmir (about 2000 killed) and Pakistan (possibly 20,000), the total causalities around the world since 2000 is unlikely to exceed 25,000. As against this:

1.2 million persons are killed in road accidents every year in the world. In United States alone, over 42,000 are killed and 2.9 million are injured every year in road accidents.

Over 430,000 Americans are killed by diseases attributed to cigarette smoking every year.

Over 400,000 Americans die each year from obesity related diseases.

Over 11,000 people are killed in America every year in shootings with private arms, a human tragedy equivalent to a new 9/11 every 3 months.

Over 135,000 people die from cancer in UK every year.

Over 3 million people were killed around the world by HIV/AIDS in 2003 alone.

Over 925 million people in the world are starving. 9 million children under five died of starvation around the world in 2009.

According to the groundbreaking 2003 medical report "Death by Medicine", by Drs. Gary Null, Carolyn Dean, Martin Feldman, Debora Rasio and Dorothy Smith, 783,936 people in the United States die every year from conventional medical mistakes. About 106,000 of the deaths are from prescription drugs.

Do you still believe that terrorism is the biggest threat of the 21st Century that is facing the United States and the world? Nobody has benefited more from terrorism than the United States and its allies. They use terrorism as an excuse to change laws, give more power to police and intelligence authorities and withdraw freedoms from the people. They use terrorism as an excuse to attack and conquer foreign lands. They exploit the fear of their people to win support. Nobody provides or has provided more money to terrorist groups and rogue states around the world than the United States and Saudi Arabia. Nobody sells more weapons than the United States and the United Kingdom. Can you see the reality?

Conclusion

It is not necessary to narrate the stories of all the countries that have a worse today than they had earlier. It is also chilling to note that most of them have one thing in common; direct or indirect US military intervention. US presidents from Truman to George Bush may not have been able to increase the prosperity of the American people but they have certainly succeeded in spreading misery and poverty to every country they have militarily intervened in. Libya, a prosperous, secular country is recovering after a civil war. Who knows which country is the next target?

United States does not submit to the International Court of Justice at Hague. It does not follow the Geneva Convention on dealing with prisoners. It justifies use of torture in its War on Terrorism. It uses white phosphorous ammunition, cluster bombs and chemical weapons in its military operations in contravention of international conventions. It does not respect sovereignty of nations. It reserves for itself the right to intervene militarily in any country which it considers has violated human rights and loves bombing small countries like Vietnam, Somalia, Serbia, Iraq, Afghanistan and Libya into submission. Unfortunately, sometimes countries do not submit and the conflict as in Somalia and Afghanistan continues for decades. Destruction of civilian property and death of civilians due to their aerial or artillery bombardments, even if in thousands, is dismissed as collateral damaged. Protests against such killings by President Hamid Karzai of Afghanistan are dismissed with disdain. United States can also hijack, board and search any ship in international waters.

American arrogance has not suffered the same fate as Napoleon's or Hitler's. But it comes at a small cost. The arrogance has, along with its neo-liberal economic policies and globalization, reduced the United States from the richest nation in the world in 1945 to the world's largest debtor nation by 2011. The interventionism makes it, arguably, the most hated nation in the world, not only amongst Muslims but in many non Muslim countries.

The "Rational Pessimist" laments the fate of prosperous peaceful nations devastated by American intervention.

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Chapter 6: Man Versus Nature

Taming Nature

The Rational Pessimist is afraid of the wrath of nature. Modern governments treat nature with contempt. They underestimate nature's powers to cause destruction. They allow nature's assets like rain forests, mangrove forests, wet lands, arctic regions, river systems and the oceans to be degraded in the name of development and in the desire to allow corporate profits. They allow housing and industrial projects at places which are geologically unsuitable and put their people at risk. They allow design compromises to save on project costs. Let us see some examples of governments and organisations taking nature for granted and the price people have paid for their follies.

Levees of New Orleans

The city of New Orleans was constructed by the French on the banks of the Mississippi River in 1718. It became a part of United States in 1815. The original residents of New Orleans settled on the high ground along the Mississippi River. Later developments eventually extended to nearby Lake Pontchartrain. These developments were built upon low lying land and marshes filled to bring them above the lake level. Navigable commercial waterways were constructed from the lake to the city. The city has been ravaged repeatedly by floods and hurricanes. New Orleans has most of the 525 km of levees or flood protection embankments and structures. The original levee system of New Orleans was designed for flood protection. Later they were redesigned and modified to contain sea surges from a Category 3 hurricane, which was considered to be the highest category when the levees were redesigned in 1970.

During the Great Mississippi Flood of 1927, the river broke out of its levees in 145 places and flooded 70,000 sq km. The flooded area was inundated up to a depth of about 10 m in some places. The flood caused over $400 million (1927 dollars) in damages and killed 246 people in seven states. Some of the levees were demolished to prevent New Orleans from experiencing serious flood damage but some areas were still flooded. After 1940, a new canal was constructed for water borne commerce and the state decided to close the old waterways. Closure of the old waterways resulted in a drastic lowering of the water table. This caused some areas to settle by up to 2 m. In other words, much of the city is currently more than 10 feet (3 m) below sea level. After the Great Flood of 1927, the Federal government nominated the Corps of Engineers of the US Army as the federal agency responsible for design and construction of flood protection projects including those in Greater New Orleans. It was to be a federally funded project.

New Orleans was again heavily flooded by Hurricane Betsy in 1965. Hurricane Betsy was a Category 4 hurricane and caused $ 1.42 billion worth of damage (10-12 billion at current rates). Some levees on the Mississippi River Gulf Outlet failed and resulted in the flooding 164,000 homes in many areas of New Orleans. Many residents were drowned. This led to the commissioning of the Federal State Lake Pontchartrain Hurricane Protection Project. The design of the levees was weakened by changes due to technical issues, environmental concerns, legal challenges, and local opposition by those opposed to the project. The project was initially estimated to take 13 years, but when Hurricane Katrina struck in 2005, almost 40 years later, the project was only 60 to 90 percent completed. New Orleans was again flooded in the Mississippi River Floods of 1995.

Hurricane Katrina struck New Orleans in 2005. The flood walls and levees failed throughout the city area. About 80 percent of New Orleans was flooded. About 1500 people died. About one million people were evacuated and 204,000 houses were destroyed or damaged. The total cost of the damage is estimated at $ 81 billion. Even more than two years later, the city struggled to rebuild itself. The American Society of Civil Engineers called the flooding of New Orleans the worst engineering catastrophe in US History. A number of investigations were carried out to identify the reasons of the catastrophe. Mississippi Floods of 2011 has again threatened New Orleans.

The primary reason for failure of levees in some areas was improper design. The height and strength of the levees were inadequate. The surge caused by Hurricane Katrina that hit New Orleans was over 7 m high where as the levees were designed for a 3 m surge. There was overtopping of levees and floodwalls in some areas. Some of the levees failed at half the strength laid down in the design specifications. The second reason for the failure was the use of sand in a few places instead of thick Louisiana clay in some embankments. The third reason for the failure of the levees in some areas was due to negligent maintenance of the Mississippi River Gulf Outlet, a navigation channel, by the Army Corps of Engineers. There had been reports of persistent flooding from seepage from the canal for a year prior to Hurricane Katrina. The levees had been modified after their original construction to accommodate multiple purposes utilization or they were not constructed of materials that met original design specifications. In one case, the placement of a railroad track over a levee compromised the designed height of the levee. Water passed right through the porous gravel underneath the track. In other cases substandard soils used resulted in water seeping underneath the foundations of some levees, and causing massive breaches and collapses of other levees along Lake Pontchartrain and the Mississippi River Gulf Outlet. Failure of the levees of New Orleans is one of the costliest engineering mistakes in American history.

The Levees of New Orleans represent one of the battlefields between nature and the mightiest nation in the world. Every few years, the levees are breached due to floods and hurricane. A few hundred people are drowned. Hundreds of thousands of people are rendered homeless, some temporarily, and others permanently. Billions of dollars are spent on rescue, relief and rehabilitation. Who cares? The poor suffer the most.

The Drying of the Aral Sea

Aral Sea is located in Central Asia at the junction of Kazakhstan and Uzbekistan. It used to be one of the four largest lakes in the world with an area of 68,000 sq km. The Aral Sea has been steadily shrinking since the 1960s after the rivers Amu Darya and Syr Darya that fed it were diverted by the Soviet Union for irrigation projects. The construction of irrigation canals began on a large scale in the 1940s. Many of the canals were poorly built, allowing water to leak or evaporate. 30 to 70 percent of the water from the Qaraqum Canal, the largest in Central Asia, went waste. Today only 12 percent of Uzbekistan's irrigation canal length is lined. The rate of water usage for irrigation continued to increase. The amount of water taken from the rivers doubled between 1960 and 2000, and cotton production also nearly doubled in the same period.

By 2007 the size of the lake had declined to 10 percent of its original size. Over the same time period its salinity increased from about 10 g/L to 100 g/L (Sea water has a salinity of about 35 g/L) and killed most of its flaura and fauna. The region's once prosperous fishing industry was destroyed, bringing unemployment and economic hardship. The Aral Sea fishing industry was decimated. In its heyday it had employed some 40,000 and reportedly produced one-sixth of the Soviet Union's entire fish catch. Former fishing towns along the original shores have become ship graveyards. The town of Moynaq in Uzbekistan had a thriving harbor and fishing industry that employed approximately 30,000 people. Now it is 45 km from the water line. Fishing boats lie scattered on the dry land that was once covered by water. Many have been there for 20 years.

The land around the Aral Sea is heavily polluted and the people living in the area are suffering from a lack of fresh water and health problems, including high rates of certain forms of cancer and lung diseases. Respiratory illnesses including tuberculosis, digestive disorders, anemia, and infectious diseases are common ailments in the region. Liver, kidney and eye problems can also be attributed to the toxic dust storms. There is a high child mortality rate of 75 in every 1,000 newborns and maternity death of 12 in every 1,000 women. Crops in the region are destroyed by salt being deposited onto the land. The retreat of the sea has reportedly caused local climate change, with summers becoming hotter and drier, and winters colder and longer. The shrinking of the Aral Sea has been called "one of the planet's worst environmental disasters". The Aral Sea now has two main parts, the North Aral Sea which is mostly in Kazakhstan and the South Aral Sea which is mostly in Uzbekistan.

In January 1994, the countries of Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan signed a deal to pledge 1 per cent of their budgets to helping the sea recover. There is now an ongoing effort in Kazakhstan to save and replenish the North Aral Sea. As part of this effort, a dam separating the North and South Aral Sea was completed in 2005. By 2006, the World Bank's restoration projects, especially in the North Aral, were giving good results. By 2008, the water level in this lake had risen by 24 m from its lowest level in 2007. Salinity has dropped. The fishing industry is being revived and producing catches for export. The restoration reportedly gave rise to long absent rain clouds and possible microclimate changes, bringing hope to a declining agricultural sector. The sea, which had receded almost 100 km south of the port city of Aral, is now a mere 25 km away.

However, the outlook for the remnants of the South Aral Sea which lies in poorer Uzbekistan remains bleak. The remnants of the South Aral Sea continue to disappear and its drastic shrinkage has created the Aralkum desert on the former lakebed. There is an inflow of groundwater discharge into the South Aral Sea, but it will not in itself be able to stop the desertification. Excess water from the North Aral Sea is now periodically allowed to flow into the largely dried up South Aral Sea through a sluice gate in the dam. Uzbekistan shows no interest in reducing the water drawn from the Amu Darya River for irrigation for cotton farming. Instead, it is moving toward oil exploration in the dry South Aral seabed.

The Aral Sea is not the only large lake that has dried up or is drying up because of irrigation projects on the rivers that feed them. The Tulare Lake and the Salton Sea in the United States and Lake Chad in Africa are also environmental disasters. The Tulare Lake was the largest freshwater lake in the Western United States till the 19th Century but it dried up after its tributary rivers were diverted for irrigation. It is now dry except for some wet lands and marshes. The Salton Sea is a saline lake covering 970 sq km. It is located directly on the San Andreas Fault in California. It is below sea level. The sea is fed by three rivers. All have been diverted to feed an agricultural system. The lake's salinity is about 44 g/L (the salinity of the Pacific Ocean is 35 g/L). The concentration is increasing by about 1 percent annually. Lake Chad is a large shallow lake in Africa. It shrank as much as 95% from about 1963 to 1998. However, 2007 satellite image shows significant improvement over previous years though the reason for the improvement is not clear. Lake Chad is economically important as it provides water to more than 20 million people living in the four countries (Chad, Cameroon, Niger and Nigeria) on the edge of the Sahara Desert.

Central Governments of large nations are not concerned about the environment, livelihood and other problems of the local people of the peripheral regions particularly if the people are poor or ethnic minorities. Moscow was oblivious to the problems created for the locals by diverting the waters of Amu Darya and Syr Darya for irrigation of cotton farms for export which led to the drying of the Aral Sea. The revival of the Aral Sea could only start after the collapse of the Soviet Union in 1991.

Sea Walls of Japan

Shorelines are susceptible to tsunamis and storm surges caused by earthquakes, cyclones and hurricanes. Constructions close to the sea shores on tsunami prone coasts are therefore an invitation to disaster. Man has always felt that he can control nature. So we continue to build structures close to the sea not only where it is inescapable as in the case of harbors but also where it is optional like in the case of residential or commercial structures like hotels and resorts. Governments of Japan, United States and even India have built sensitive structures like nuclear reactors near the ocean's edge. For instance, the San Onofre Nuclear Power Plant in southern California was built close to the ocean but protected by a 7.5 m seawall based on scientists' estimates of potential threat. As long as their assumptions hold, everything should be fine. But the assumptions do not always hold. On March 11, 2011, a 9.0 magnitude earthquake and resulting tsunami hit Japan. The earthquake may qualify as the proverbial millennium event. But they do happen. The quake and tsunami left more than 25,000 people dead or missing and over a 100,000 homeless on the northeast coast and triggered the worst nuclear crisis since Chernobyl in Ukraine. The earthquake and tsunami caused damages worth more than $ 300 billion and pushed Japan's economy into recession.

The operator of the Fukushima nuclear plant, Tokyo Electric Power Co., claimed that the tsunami that wrecked critical power and cooling systems there was at least 46 feet (14 meters) high. The Fukushima reactor was rated as earthquake safe up to 8.2 magnitude. But the actual earthquake was somewhere between 8.9 and 9.1, seven to nine times more powerful than what it was designed for. An 8.2 earthquake was supposed to be the "once in five hundred years" catastrophic maximum." When the reactors were constructed the underestimation of the magnitude of the design basis earthquake may have been consistent with the state of the art of the time. However, since the great tsunami in the Indian Ocean after the 9.3 Sumatran Earthquakes, the safety of every reactor in tsunami prone zones should have been reassessed.

The seawalls of Japan did not fail structurally. They failed to do the job they were built to do, protect people and property. The failure of the world's largest seawall, which cost $1.5 billion, to protect a port city shows that building larger and stronger sea walls are no guarantee against the wrath of nature.

Three Gorges Dam

The Three Gorges Dam is the world's largest hydroelectric power station with a total generating capacity of 18,200 MW. It is located on the Yangtze River in Hubei province of China. Except for a ship lift, the project was completed on October 30, 2008 at a cost of over $ 64 billion. In addition to producing electricity, the dam increases the Yangtze River's shipping capacity, and reduces the potential for floods downstream by providing flood water storage space. The Chinese government regards the project as a historic engineering, social and economic success. The dam increased the Yangtze River's barge traffic capacity six folds. From 2004 to 2007 a total of 198 million tons of goods passed through the ship locks. Compared to using trucking, barges lowered transportation costs by 25 percent. However, the dam has flooded thousands of archeological and cultural sites and displaced some 1.3 million people. It has the potential to cause significant ecological changes, including an increased risk of land slides. The dam has been a controversial topic both in China and abroad. A 9M earthquake could breach the dam and cause catastrophic floods.

Yangtze, Asia's biggest river, was experiencing its worst drought in 50 years in April-May 2011, damaging crops, threatening wildlife and raising doubts about the viability of China's massive water diversion projects. Downstream communities have accused the Three Gorges Dam of holding back too much water to generate power. Environmentalists say this has contributed to the demise of lakes and wetlands, which are already under pressure from urban development and the demands of agriculture. The operators of the dam, however, say the reservoir is helping to ease water shortages through a timely release of water. The situation changed dramatically in June 2011. Unprecedented rains flooded the Yangtze with the flood waters reaching highest levels since 1955. Infrastructure like roads, dykes, railway lines and millions of hectares of farmland have been destroyed. Over one hundred fifty people have perished and over one million people have been displaced. The cost of damage was nearing $ 6 billion.

Has China been able to tame the Yangtze? Time will tell.

Natural Disasters

Tornadoes of the US

Tornadoes are violent, dangerous, rotating columns of wind and rain that are in contact with both the surface of the earth and rain bearing clouds. They are also referred to as twisters in the United States. Tornadoes come in many shapes and sizes, but are typically in the form of a visible spout of air and water, whose narrow end touches the earth. The spout is often encircled by a cloud of debris. The most extreme tornadoes can attain wind speeds of more than 480 km/h, stretch more than 3 km across, and stay on the ground for more than 20 km.

Tornadoes have been observed on every continent except Antarctica. However, the vast majority of tornadoes in the world occur in the United States. They are most frequent in the plains between the Rocky and the Appalachian Mountains, particularly in Northern Texas, Kansas, Oklahoma, Tennessee and Mississippi valleys. The United States averages about 1,200 tornadoes per year. The tornadoes are measured on the Fujita scale. The most violent ones are grades as F5. Only 1 percent of the tornadoes are of strength F4 and above. That means that every year 10 to 12 devastating tornadoes hit the tornado prone areas of United States. The United States has had more than 50 F5 tornadoes since 1881. 400 to 600 people are killed in tornadoes every year in the United States and 6000 to 10000 houses are destroyed or seriously damaged. The damage can be worth a few hundred million to a few billion dollars per year.

The most extreme tornado in recorded history was the Tri- State Tornado, which roared through parts of Missouri, Illinois and Indiana on March 18, 1925. It holds records for longest path length of 352 km, longest duration of about 3.5 hours, and fastest forward speed for a major tornado 117 km/h. It killed 695 people. 2011 has been a particularly bad year. Till the end of May almost 1200 tornadoes had hit the Mississippi valley killing over 600 people and destroying over 10,000 houses. The most disastrous was the tornado which struck Joplin, Missouri, a town of about 60,000 people. 125 people were killed and over a thousand were injured. Almost the entire town was flattened. The cost of damage is estimated at between 1 to 3 billion dollars.

The tornadoes of the United States prove once again that even the most developed country in the world is powerless before the wrath of nature. That is only to be expected. What is unexpected is that even after 130 years of research, the United States has not been able to divide the country in tornado zones like the seismic zones for earthquakes. It is also surprising that there are no building codes for tornado prone areas to make buildings tornado resistant.

Indian Ocean Tsunami, 2004

On 26 December, 2004, there was a massive undersea earthquake with a magnitude between 9.1 and 9.3 with an epicenter off the West Coast of Sumatra, Indonesia. The earthquake triggered a series of devastating tsunamis along the coasts of most countries bordering the Indian Ocean. The tsunami killed over 230,000 people in fourteen countries, and inundated coastal communities with waves up to 30 m high. It was one of the deadliest natural disasters recorded in history. Indonesia was the hardest hit, followed by Sri Lanka, India and Thailand. The tsunami caused serious damage and deaths as far as the east coast of Africa, with the farthest recorded death due to the tsunami occurring at Rooi Els in South Africa, 8,000 km away from the epicenter. In an addition to the large number of local residents, up to 9,000 foreign tourists, mostly Europeans, enjoying the peak holiday travel season were among the dead or missing. States of emergency were declared in Indonesia, Sri Lanka and the Maldives. The United Nations estimated at the outset that the relief operation would be one of the costliest in human history.

Wild Fires

Wild fires are uncontrolled blazes fueled by dry hot weather, wind, and dry underbrush. Wild fires are most frequent in the United States, Australia, Russia and Spain. On average, more than 100,000 wildfires clear 1.6 million to 2 million hectares of land in the U.S. every year. In recent years, wildfires have burned up to 3.6 million hectares of forests. A wildfire moves at speeds of up to 23 kilometers an hour, consuming everything including trees, brush, homes, even humans in its path. It is estimated that four out of five wildfires are started by people, deliberately as an act of arson or for clearing land for cultivation or negligence like throwing cigarettes on dry grass or not putting out camp fires. The Wallow Fire, in Arizona in 2011 has become the largest recorded wildfire in state's history and charred more than 470,000 acres.

Cyclone Nargis 2008

Cyclone Nargis was a devastating tropical cyclone that caused the worst natural disaster in the recorded history of Myanmar. Nargis developed as a cyclone on April 27 in the central area of Bay of Bengal. The cyclone made landfall on May 2, 2008, and moved ashore at peak intensity, and passed near the major city of Yangon. Thereafter, the storm gradually weakened until it dissipated near the border of Burma and Thailand. The Indian authorities had warned Burma about the danger that Cyclone Nargis posed 48 hours before it hit the country's coast. But little could be done to evacuate residents and reduce the casualties. The cyclone caused catastrophic destruction and at least 138,000 fatalities. The total damage was estimated at over US $10 billion. The cyclone proved once again that man is helpless in the face of the fury of nature.

Sichuan Earthquake, 2008

The Sichuan earthquake was a deadly earthquake that struck on May 12, 2008 in Sichuan province of China. It measured at 8.0 M on the Richter scale. The earthquake was felt in nearby countries and as far away as Beijing and Shanghai, over 1,500 km away. Official figures stated that 69,197 were confirmed dead, 374,176 injured, with 18,222 listed as missing. The earthquake left about 4.8 million people homeless, though the number could be as high as 11 million. It was the deadliest earthquake to hit China since the 1976 Tangshan earthquake which killed at least 240,000 people. A cargo train carrying 13 petrol tankers derailed and caught on fire. Two chemical plants collapsed in a city which led to leakage of some 80 tons of liquid ammonia. A hydropower Plant located 20 km east of the epicenter was damaged. In all, 391 dams, most of them small, were reported damaged by the quake. At least 7,000 school buildings in Sichuan Province collapsed killing tens of thousands of students. The earthquake caused $ 85 billion in damage, making it the costliest disaster in Chinese history and third costliest disaster ever known. On November 6, 2008, the central government announced that it will spend 1 trillion Yuan or about $146.5 billion over the next three years to rebuild areas ravaged by the earthquake.

The massive damage of buildings in the earthquake affected area was because China did not create an adequate seismic design code until after the devastating Tangshan earthquake in 1976. Now there are very strict building codes in China which take care of seismic design issues. But many of the buildings which collapsed presumably were quite old. Many of the buildings which collapsed in rural areas probably were not built with any regulations overseeing them. Poor quality control during construction can also make adequately designed buildings vulnerable to earthquakes.

Messina Earthquake and Tsunami, Italy

Europe is not earthquake prone. There was only one major one in the 20th Century. On December 28, 1908 an earthquake of 7.2 M occurred at city of Messina, in Sicily. Reggio Calabria on the Italian mainland also suffered heavy damage. The earthquake was felt within a 300 km radius. Moments after the earthquake, a 12 m tsunami struck nearby coasts causing even more devastation. 93 percent of structures in Messina were destroyed and some 70,000 residents were killed. Buildings in the area had not been constructed for earthquake resistance. They had heavy roofs and vulnerable foundations. There were also several fires that destroyed houses and turned them to rubble.

The boundary zone of the African Continental plate and the Eurasian plate runs through the Mediterranean Sea more or less parallel to the North African coast. Italy, Portugal and Spain are close to the junction of the two plates and are therefore vulnerable to earthquakes and tsunami. Messina earthquake was not a very powerful earthquake. But it produced a powerful tsunami and killed a lot of people.

Nevado del Ruiz Volcano, Colombia

On November 13, 1985, the volcano erupted after 69 years of dormancy. The volcano's eruption caught nearby towns unaware, even though the government had received warnings to evacuate the area from multiple geological organizations which had detected volcanic activity in September 1985. The lava flows melted the mountain's glaciers, sending four enormous mudslides flowing down its slopes at 60 km per hour into the six rivers at the base of the volcano. The slides engulfed the town of Armero, killing more than 20,000 of its 29,000 inhabitants. Casualties in other towns brought the overall death toll to 23,000. This was the second deadliest volcanic disaster of the 20th century, surpassed only by the 1902 eruption of Mount Pelee. Nevado del Ruiz has erupted several times since the disaster, and continues to threaten up to 500,000 people living along the river valleys at the foot of the mountain.

Geologists and other experts had warned authorities and media outlets about the danger over the weeks and days leading up to the eruption. On the day of the eruption, several evacuation attempts were made, but a severe storm restricted communications. Many victims stayed in their houses as they had been instructed, believing that the eruption had ended. The noise from the storm may have prevented many from hearing the sounds from the volcano until it was too late. The government learnt its lesson and created a Volcano Crisis Assistance Team, which evacuated roughly 75,000 people from the area around Mount Pinatubo before its 1991 eruption and saved lives.

Banqiao Reservoir Dam Failure, China

The Banqiao Dam is one of 62 dams in the Huai River basin in China's Henan Province that failed or was intentionally destroyed in 1975 during Typhoon Nina. The dam failures killed an estimated 171,000 people and about 11 million people lost their homes. It also caused the sudden loss of electric power equivalent to that produced by roughly nine very large modern coal fired power stations or about 20 nuclear reactors.

The construction of Banqiao dam was started in April 1951 on the Ru River with the help of Soviet consultants. It was a project to control flooding and to generate electricity. The dam was completed on June 1952. Because of the non availability of hydrological data, the design standard was lower than what it should have been. After the Great Flood in the Huai River in 1954, the upstream reservoirs including the Banqiao dam were extended, and reconstructed. The dam was made of clay and was 24.5 m high. Cracks in the dam and sluice gates appeared after completion due to construction and engineering defects. They were repaired with the advice from Soviet engineers and the dam was considered unbreakable. One of China's foremost hydrologists had recommended 12 sluice gates for the Banqiao Dam, but this was scaled back to five to save on project cost. Other dams in the project had a similar reduction of safety features.

The Dam was designed to survive a "once in 1000 years flood" (300 mm of rainfall per day). In August 1975, however, a once in 2000 years flood occurred. The collision of the Super Typhoon Nina and a cold front poured more than a year's rainfall in 24 hours (1060 mm per day, exceeding the average annual precipitation of about 800 mm). Weather forecasters had failed to predict such a downpour. Communication to the dam was largely lost due to the collapse of buildings under heavy rain and damage to telegraph wires. On August 6, a request to open sluice gates of the dam was rejected, because of the existing flood situation in downstream areas. On August 7, however, the request was accepted, but the telegram failed to reach the dam. A Chinese army division which was deployed on the Banqiao Dam site for flood relief sent the first warning that the dam may fail. On August 8, a smaller dam upstream of Banqiao collapsed. Half an hour later, the flood water at the Banqiao Dam began to overflow and the dam collapsed. The resulting flood waters formed a large wave, which was 10 km wide and 3 to 7 m high. The wave rushed downwards into the plains below at nearly 50 km per hour, almost wiping out an area 55 km long and 15 km wide, and created temporary lakes as large as 12,000 sq km. This resulted in the failure of 62 dams in total. Evacuation orders had not been fully delivered because of weather conditions and poor communications. Telegraphs failed, telephones were rare, and some messengers were stranded by the floods. Casualties were less where the people had been warned. Some villages were totally wiped out. Tens of thousands of people were swept downstream by the flood waters. To protect other dams from failure, several flood diversion areas were evacuated and inundated. Several dams were deliberately destroyed by air strikes to release water in desired directions. The dikes on the Quan River gave away inundating large areas. The railway line from Beijing to Guangzhou remained cut off for 18 days. Over 40,000 troops were deployed for disaster relief. Nine days later there were still over a million people trapped by the waters, relying on air drops of food and unreachable to disaster relief. Epidemics and famine devastated the trapped survivors.

China has invested $ 9.72 billion since the 1998 Yangtze floods in repairing reservoirs which were in poor condition. But major floods still take place.

Global Warming

Global warming is the continuing rise in the average temperature of earth's oceans and atmosphere. Most climate scientists agree that global warming is occurring due to human activities such as deforestation and burning of fossil fuels. Global surface temperature increased by about 0.74 °C during the 20th Century. The Inter-governmental Panel on Climate Change (IPCC) has projected that global surface temperature is likely to rise 1.1 to 6.4 °C by 2100. An increase in global temperature will cause sea levels to rise, will change the amount and pattern of rainfall in various regions and could cause expansion of sub-tropical deserts. Global warming is expected to affect the Arctic the most with melting of permafrost and sea ice. Other expected effects are retreating of glaciers, more frequent occurrence of extreme weather events such as heat waves, droughts, and very heavy rainfalls leading to floods. We have seen some of effects of the weather changes in this chapter. The effect of severe weather can lead to extinction of species and changes in agriculture yields. Hence, the ecosystem upon which human livelihood depends may not be preserved.

The Kyoto Protocol on climate change was an agreement aimed at stabilizing greenhouse gas concentration to prevent a dangerous escalation of global warming. As of May 2010, 192 countries had ratified the protocol. Only USA and Afghanistan have not ratified the treaty. Human activity since the Industrial Revolution (1750) has increased the amount of greenhouse gases like CO2, methane, CFCs, nitrous oxide and sulphur dioxide in the atmosphere. The concentrations of CO2 and methane have increased by 36 percent and 148 percent respectively since 1750. These levels are much higher than at any time during the last 800,000 years, the period for which reliable data has been extracted from ice cores. Use of petroleum products has produced about three-quarters of the increase in CO2 over the past 20 years. The rest of this increase is caused mostly by changes in land use, particularly deforestation. Emissions will continue to increase globally as developing nations try to catch up economically with the developed nations. Fossil fuel reserves are abundant, and will continue to be the main source of energy for most of the 21st century. The atmospheric concentration of CO2 will continue to increase. Fashionable technologies like hybrid cars and solar power are too expensive and uncommon to make much of a difference.

Gallup survey of 111 countries up to 2010 determined that there was a substantial decrease in the number of Americans and Europeans who viewed Global Warming as a serious threat. Financial constraints in the developed countries will make it difficult for governments to allocate necessary resources to the development of clean energies. Lobbying by the countries and companies mining coal and producing crude oil and other petroleum products will ensure that development non conventional energies does not receive a major boost in the near future. Measures like clearing forests or reducing food grain output to grow crops to produce bio-fuels are ill conceived and will do more harm than good. More attention is necessary in evolving energy efficient technologies and energy saving by eliminating waste and less productive uses of electricity like neon lights for advertising and increasing the spacing of street lights.

Heat Wave in Europe 2003

2003 was the hottest summer on record in Europe since at least 1540. The heat wave led to health crises in several countries and combined with drought to create a crop shortfall in Southern Europe. More than 40,000 Europeans died as a result of the heat wave.

France was one of the worst affected countries. According to the French National Institute of Health, there were 14,802 heat related deaths (mostly among the elderly) during the heat wave. France does not commonly have very hot summers, particularly in the northern areas, but it had seven days with temperatures of more than 40 °C recorded in some areas between July and August 2003. Because of the usually relatively mild summers, most people did not know how to react to very high temperatures, and most single family homes and residential facilities built in the last 50 years were not equipped with air conditioning. The heat wave occurred in August, a month in which many people, including government ministers and physicians, are on holiday. All these factors increased the casualties due to the heat wave. Many bodies were not claimed for many weeks because relatives were on holiday. A refrigerated warehouse outside Paris was used by undertakers as they did not have enough space in their own facilities.

The situation was equally bad in many other European countries. There were extensive forest fires in Portugal. Five percent of the countryside and ten percent of the country's forests, a total of about 215,000 hectares, were destroyed. Eighteen people died in the fires and there were an estimated 1800 to 2000 heat related deaths over all. Temperatures reached as high as 48 °C in some areas.

Netherland was also affected. There were about 1,500 heat related deaths in the Netherland, again largely the elderly. The heat wave here broke no records. The highest temperature recorded during this heat wave was 37.8°C, which was only 0.8°C below the national record of 1704.

There were 141 deaths in Spain. The highest temperature reached was 45.1 °C which was below the record of 46.6 °C established in 1995. In Germany, a record temperature of 40.4 °C was recorded. With only half the normal rainfall, rivers were at their lowest levels in the 20th Century and shipping could not navigate the Elbe or Danube. Around 300 people mostly elderly died during the 2003 heat wave in Germany. Melting glaciers in the Alps caused avalanches and flash floods in Switzerland. A new nationwide record temperature of 41.5 °C was recorded. The UK recorded the highest temperature 38.5 °C. Scotland also broke its highest temperature record with 32.9 °C recorded. According to the BBC around 2,000 people in the UK died during the 2003 heat wave. Most of these were probably over 80. Crops which suffered most from drought were grown in Southern Europe. The total EU wheat production was down by 10 million tons, or about10 %.

Heat Wave in Russia 2010

An abnormal heat wave was experienced in Russia in 2010. Some claimed that it was the worst heat wave during the last 1000 years. The highest temperature of 44.0 °C was recorded in the southern Russian Republic of Kalmykia on the Caspian Sea on July 11, 2010. It was the highest ever recorded in Russia. The record for the highest temperature ever in Siberia was established when 42.3 °C was recorded at Belogorsk in south eastern Siberia close to the Chinese border. Russia's metrological department said it was the most prolonged heat wave since 1981. Moscow's City Hall sent out water tankers to sprinkle water on the roads to prevent the tarmac from melting. Moscow was hit by a minor cholera outbreak on 5 July. On 13 July the Russian Bird Conservation Union said that the heat was killing most of European Russia's birds, especially those in Moscow. The water levels in the River Volga dropped to very low levels. In the first half of July, average temperatures in Moscow were 6.2°C above average. Pollution levels in the city were five times higher than normal.

The worst drought in nearly 130 years destroyed about nine million hectares of crop or about 20 per cent of the grain harvest. Nineteen of Russia's 83 regions declared a state of emergency after crop failure caused by the heat induced drought. Russia's Emergency Situation Ministry said 774 forest fires had been registered. The fires destroyed approximately 100,000 hectares of forests. Some 4,000 soldiers were called in to help fight the fires in the Moscow district. Over 5,000 people had been evacuated from their homes. Russian prime minister organized an emergency meeting for August 2, with the governors of the various regions in the Central and Southern Federal Districts devastated by the fires. The grain harvest in these areas was also destroyed. Hundreds of wildfires threatened more than 200 villages around Moscow and nearby districts. 625 homes were destroyed the Volga Federal District and over 200 were destroyed Voronezh. More than 1,000 were evacuated in both places. The forest fires cost roughly $15 billion in damages. An estimated 56,000 people in all died from the effects of the smog and heat wave. Russian president declared a state of emergency in seven regions for the fires, while 28 other regions were under a state of emergency due to drought and crop failures.

Conclusion

Early man respected mother earth and nature and tried to live in harmony with it. Forces of nature like the sun, moon, rain, storms, found places in the pantheons of the pagan religions. But modern man has been degrading nature in search for energy, minerals, and corporate profits. It has been trying to tame forces of nature like the oceans and rivers with walls.

Man has been trying to control rivers like the Mississippi and Yangtze for centuries. However the attempts have failed many times. We can assume that the levee system on the Mississippi and the dams, dykes and sea walls all around the world are likely to fail many more times. That does not bother politicians and multinational corporations. After every disaster, billions of dollars are allocated for repair and rehabilitation. This will mean cut backs for politicians and profits for the corporations. But the ordinary people of the area will suffer every time. Their homes will be destroyed or damaged. Many of their personal belongings will be lost. Some will lose their livelihood. Who cares?

Optimists have often ignored dangers of natural disasters when selecting sites for hazardous projects. It has taken the world about 50 years to realize the dangers of having nuclear power plants on sea shores in tsunami prone areas. Dams are often located at seismically dangerous sites. Let us see if China's attempt to tame the Yangtze River succeeds or fails. The project has encouraged Brazil to attempt to tame the Amazon River. One of the hardest parts of the role of the Rational Pessimist is to convince engineers, investors and governments to avoid building sensitive facilities in geologically hazardous zones and design structures adequately for natural hazards. Most authorities consistently use assessment methods that minimize the probability and size of earthquakes, tsunamis, floods and volcanoes that might affect the proposed structure or facility. The "No one could have foreseen the magnitude of this earthquake or rainfall" argument is not tenable. The Kamchatka earthquake of 1952, the Aleutian Islands earthquake of 1957, the 1960 Chilean earthquake, the 1964 Alaskan earthquake were all M 9.0 or stronger. They were all on geological zones similar to the one underlying northern Japan. The fact is that the geologists, engineers and regulatory authorities involved in designing and building Japan's nuclear power plants on the sea shore made an enormous mistake. An earthquake of this magnitude was foreseeable. It is also not impossible for it to rain a year's rainfall in a matter of days. It has happened many times and is likely to happen again and again. Authorities need to remember this while designing dams and irrigation systems.

It is not possible to prevent natural disasters like earthquakes, tsunami's, cyclones, hurricanes, floods or volcanic eruptions. But the damage caused and loss of life can be reduced by ensuring adequate safety factors during design and construction, closely monitoring weather systems and the conditions of mega-structures and having effective evacuation and disaster mitigation plans. Mega structures should not be built in areas prone to earthquakes, floods or tsunamis.

Management of toxic waste needs much more attention than being currently given. The world is producing and storing billions of tons of hazardous chemical and nuclear waste. There is a risk of these hazardous substances polluting our rivers, seas and ground water, particularly during floods and tsunamis. No compromise should be accepted regarding the safety aspects of storing hazardous chemical and nuclear waste.

We depend on nature and environment for our food, mineral and energy requirements. We must learn to extract these with minimum damage to the environment and repair the damage where damage takes place. We cannot allow profit motive to degrade the environment which sustains us or cause misery to poor people of the area in the name of development. Can man learn to respect the power of nature and live in harmony with it?

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Chapter 7: Weaknesses Of Human Nature

The Rational Pessimist is most afraid of the negative or sinful traits of human nature. The most harmful of these traits is perhaps greed. But there are others like negligence and cost cutting, arrogance, hatred and religious intolerance which cause or increase human misery. Let us look at some examples of misery caused to mankind and the environment due to human failings.

Negligence and Cost Cutting

Deepwater Horizon Oil Spill in Gulf of Mexico

The "Deepwater Horizon", an oil drilling rig built by Hyundai Heavy Industries of South Korea, owned by the American Company Transocean and leased to British Petroleum (BP) began drilling in the Gulf of Mexico in February 2010. On April 20, 2010, the rig exploded killing 11 people and injuring 117. Multiple safety systems, including a blowout preventer failed. An estimated 5000 barrels (one million liters) of crude oil began to leak into the Gulf of Mexico off the US coast every day. The result was one of the greatest environmental disasters in the history of the world. The oil spill affected about 40 percent of the coastal wetlands in the continental United States. Fishing had to be banned in an area of about 228,000 sq km. About 14 million people living in five states along the coast were affected. Hundreds of thousands of Gulf region families who depended on fishing or tourism lost their earnings. The damage will take years to heal fully.

The disaster took place because the blowout preventer at the well did not work. The crew members could not activate the switch which activated the blowout preventer. One safety feature that was not installed in the blowout preventer was an acoustic switch which could be remotely activated. Such switches are mandatory in countries like Brazil and Norway. But regulators in the United States, under lobbying from the drilling industry, did not make them mandatory in the United States to enable the company to save about one million dollars in costs.

The Exxon Valdez Oil Spill

The Exxon Valdez oil spill occurred in Prince William Sound, Alaska, on March 24, 1989, when the Exxon Valdez, an oil tanker bound for California, struck a reef and spilled 260,000 to 750,000 barrels of crude oil into the sea. The accident took place due to careless sailing by its crew. The accident is considered to be one of the most devastating man made environmental disasters. The oil spill eventually covered 2,100 km of coastline, and 28,000 sq km of ocean. Immediate effects included the estimated deaths of 100,000 to as many as 250,000 sea birds, at least 2,800 sea otters, 300 harbor seals and about 250 Bald Eagles. The effects of the spill continued to be felt for many years afterwards. The actual damage was worth $ 287 million and Exxon had to pay $ 2.5 billion in punitive damages. Single hull tankers have been banned after the accident.

Bhopal Gas Tragedy

The Bhopal Gas Tragedy in Madhya Pradesh, India was one of the world's worst industrial catastrophes. It occurred on the night of December 2/3, 1984 at the Union Carbide India Limited pesticide plant at Bhopal. The leak of a lethal gas, methyl isocyanate, from the plant affected hundreds of thousands of people. The government of Madhya Pradesh has confirmed that 3,787 died due to the gas release. Another about 8,000 have since died from gas related diseases. The leak caused gas related illnesses to over 558,000 people. About 38,500 people became partly disabled. About 3,900 suffered permanent disabilities. In June 2010, seven ex-employees, including the former chairman of the company, were convicted in Bhopal of causing death by negligence and sentenced to two years imprisonment and a fine of about $2,000 each, the maximum punishment allowed by law. An eighth former employee was also convicted, but died before judgment was pronounced. Causes of the gas leak which wrecked more than 500,000 lives are believed to be filling toxic chemical in the storage tank beyond recommended levels, poor maintenance after the plant ceased production at the end of 1984 (no effort appears to have been made to dispose off the hazardous chemical) and failure of several safety systems due to poor maintenance. The safety systems including the refrigeration system of the tank holding the toxic chemical had been switched off to save money. The problem was made worse by non-existent disaster mitigation plans, and shortcomings in health care and socio-economic rehabilitation, all reflecting the apathy of the government in power and the company.

Chernobyl Nuclear Disaster

The world's worst nuclear disaster, the explosion and fire at the Chernobyl power plant in 1986 was caused by human error. According to a United Nation's report, the facility operators, in violation of safety regulations, had switched off important control systems at the Ukrainian plant's reactor number four and allowed it to reach unstable conditions. A power surge led to a series of blasts in the middle of the night which blew off the reactor's heavy steel and concrete lid and sent a cloud of radioactive dust billowing across Northern and Western Europe. The cloud reached as far as eastern United States. The cloud of radioactive materials affected Ukraine and neighboring Belarus, as well as parts of Russia and Europe. The governments of Ukraine, Belarus and Russia, have estimated the death toll from the explosion at only a few thousand. U.N. agencies have said some 4,000 people died because of radiation exposure. The environmental group Greenpeace puts the eventual death toll far higher than official estimates, with up to 93,000 extra cancer deaths worldwide. The Chernobyl Union of Ukraine, a non-government body, estimates the present death toll from the disaster at almost 734,000.

Chernobyl engineers shut down the last functioning reactor at the power plant in December 2000. Radioactive nuclear fuel is still being removed from the plant. A make shift cover of the damaged reactor called the 'Sarcophagus', was built in six months after the explosion to protect the environment from radiation for at least 30 years. This has now developed cracks, triggering an international effort to fund a new encasement. Ukraine is seeking a further $840 million to help finance the new structure which will slip over the aging 'Sarcophagus' and allow the old reactor to be dismantled. Officials say it could be up to 100 years before the station is completely decommissioned. A 30 km exclusion zone is in place round the disaster site.

The Ajka Alumina Sludge Spill, 2010

The Ajka alumina sludge spill was an industrial accident at a caustic waste reservoir chain of an aluminum refining plant in Ajka, in western Hungary. On 4 October 2010, the north-western corner of the dam of reservoir No. 10 collapsed, freeing about a million cubic metres of highly toxic liquid waste from the storage reservoir. The mud was released as a one to two metre wave, flooding several nearby localities, including the village of Kolontar and the town of Devecser. At least nine people died, and 122 people were injured with chemical burns. About 40 square km of land was laid waste. The toxic spill killed all life in the Marcal River and reached the Danube River on 7 October 2010 and threatened its ecological system. The cause of the accident was assessed to be poor maintenance of the dam which was further weakened by heavy rains. The Hungarian government arrested the managing director of the Aluminum plant and charged him with criminal negligence leading to a public catastrophe. The Government also took over the management of the company and was identifying other locations where accidents could take place.

The accident may be the first of its kind in Europe but it may not be the last. The process used for producing Aluminum from Bauxite at the plant produces the toxic sludge which cannot be treated and has to be stored. Since the dam of No. 10 reservoir collapsed, it is reasonable to assume that there are at least nine other reservoirs holding millions of cubic metre of toxic sludge at the plant. There could be hundreds of such plants around the world. Is anyone concerned about the risk they pose to the environment and the population living near these plants? Is there no cleaner and eco friendly way to produce Aluminum from Bauxite?

The Houston Chemical Complex Disaster, U.S.A. 1989

The Houston Chemical Complex (HCC) in Pasadena, Texas is a chemical facility which produced approximately 700,000 tons of HDPE per year. HDPE is a plastic material used to make milk bottles and other containers. The plant employed about 1500 employees. On October 23, 1989 there was a devastating series of explosions and fire. Some 23 employees were killed and 314 were injured. In addition to the loss of life and injuries, the explosion affected all facilities within the complex, causing about $ 700 million worth of damage plus an additional business disruption loss estimated at $700 million. The two polyethylene production plants nearest the source of the blast were destroyed. Windows were shattered and bricks ripped out in the HCC administration building nearly a kilo meter away. The initial explosion was equivalent to an earthquake registering 3.5 on the Richter scale and threw debris as far away as six miles. The accident resulted from a release of extremely inflammable gases and occurred during regular maintenance operations on one of the plant's polyethylene reactors. A vapor cloud formed and traveled rapidly through the polyethylene plant. Within 90 to 120 seconds, the vapor cloud came into contact with an ignition source and exploded.

The causes of the accident were; inadequate awareness of the fire hazard and dangers of explosion; inadequate standard operating procedures; inadequate maintenance system; lack of combustible gas detection and alarm system; presence of ignition sources; inadequate ventilation systems for nearby buildings. The fire protection system was not maintained in an adequate state of readiness. Additional reasons for the scale of damage included proximity of crowded offices to hazardous operations; inadequate separation between buildings; congested process equipment; insufficient separation between the reactors and the control room for emergency shutdown procedures.

If this can be the state of chemical plants in a developed country like the United States, one can imagine the state of affairs in similar plants in the developing world. Perhaps, we have to pay for technological progress with such disasters.

Greed

Farmer Suicides in India

A staggering 182,936 Indian farmers are reported to have committed suicide between 1997 and 2007. Close to two thirds of these suicides have occurred in five economically progressive Indian states namely Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh and Chhattisgarh. The rate at which farmers are killing themselves in these states is far higher than suicide rates among non farmers. The spate of farm suicides is the largest sustained wave of such deaths recorded in history. The rate of farmers' suicides has worsened particularly after 2001, when multinational corporations like Monsanto were allowed into India under WTO related liberalization.

The main reason for the suicides is inability to pay back debt and the harassment and humiliation that invariably follows. Those who killed themselves were mainly cash crop farmers growing cotton, coffee, sugarcane, groundnut, pepper, vanilla etc. who used latest hybrid and genetically modified seeds. Suicides are fewer among food crop farmers who grow rice, wheat, maize, pulses than those who grow cash crops. Suicides are also fewer among those who use traditional or government supplied seeds. The multinational companies selling hybrid seeds, fertilizers and pesticides, their dealers and marketing agents, often in connivance with the staff of government agricultural departments, encourage farmers to move from food crop cultivation to cash crops and vegetable cultivation using their costly hybrid seeds by arranging easy loans and creating illusions of huge profits. This means higher cultivation costs, bigger loans and much higher debt. For example, it used to cost about $165 to grow an acre of paddy in Kerala. When one switched to growing vanilla, the cost per acre was in 2003-04 became almost $3,000 an acre, a 20 fold increase. Indigenous hybrid cotton seeds were available at $ 7 for 450 gm. Monsanto's BT cotton seeds were initially sold at $ 33 to 35 per 450 gm. The cultivation of BT Cotton and other new hybrid cash crops and vegetables also requires more water and timely irrigation. The farmers going for cash crops using new hybrid seeds were thus subjected to greater risks of crop failure due inadequate or delayed monsoons, droughts and floods. Their returns are also subject to the volatility of global commodity prices, subsidising cotton prices by the US and fall in prices due to over production when crops were good or due to liberalization of imports. For example, the reduction of import duty on raw silk from 35 per cent to 5 percent has benefited Chinese producers but ruined most Indian raw silk producers. Whenever crops fail or prices crash, the farmer's debt management goes out of control. Unable to pay and harassed and taunted by the agents of the lenders, the gullible and greedy farmers, taken in by the sales talk of agents of Monsanto and other multinationals, are left with no other option but to commit suicide. The problem continues though on a lesser scale.

Floods, droughts and price fluctuations do not kill the farmers. Greed and dreams of getting rich quick with borrowed money does.

The Collapse of Northern Rock Bank

Northern Rock Plc. is a British bank, best known for becoming the first British bank in 150 years to suffer a bank run when its depositors lined up outside the bank to withdraw all of their savings as quickly as possible. It is the successor of the Northern Rock Building Society. Building societies offer banking and related financial services, especially mortgage lending. These institutions are found in the United Kingdom and several other countries. It became a bank in 1997 when the Northern Rock Building Society was converted into a bank and listed on the London Stock Exchanges. The Northern Rock Bank had a business plan which involved borrowing heavily in the UK and international money markets, extending mortgages to customers with this funding, and then to re-sell these mortgages on international capital markets, a process known as securitisation. When the global demand from investors for securitized mortgages dropped in August 2007, Northern Rock became unable to repay loans taken from the money market. On 14 September 2007, the Bank sought and received a loan from the Bank of England to provide funds it was unable to raise from the money market. This led to panic among individual depositors who feared that their savings might not be available should Northern Rock Bank go into receivership. This led to a bank run, the UK's first in 150 years. On 22 February 2008, the troubled bank was nationalized and provided a loan of ₤ 26.9 billion by the Bank of England and thus saving most of its depositors from financial ruin.

The share holders were not so lucky. Former shareholders of the bank and hedge funds who had lent to Northern Rock took legal action in January 2009 to get compensation for their shares and loans. The shareholders lost the case. They also lost their appeals in the British courts. They have lost their investments. Excessive leveraging in the search of large profits led to the crisis. Greed almost killed the Bank. It was of course, not the only bank which sank for the same reason during the financial crisis of 2007-08.

Spanish Real Estate Bubble

British and other north Europeans had fallen in love with Spain's sun-kissed beaches. In a country of 47 million people, some four million foreigners own property. Spaniards also aspired to own a second home in the countryside or on the coast. About a fifth of households own one. Till 2007, it was boom time for real estate in Spain. House prices had risen 270 per cent in the past ten years. It was too good to last. The Spanish housing market went into a tailspin in 2008, with prices falling by almost 9 per cent from their peak, in December 2007. Homes on the Mediterranean coast suffered the biggest drop in prices, with a fall of about 13 per cent over the 12 months to November 2008. Properties in the largest cities were also hit hard. Some agents speak of sellers slashing prices by up to 40 per cent. An estimated 800,000 new homes remain unsold. A sizeable proportion of these properties are in holiday resort towns. In spite the glut of unsold new homes, another 257,000 were completed in 2010. EU figures indicate that there has been a 43 per cent collapse in the value of the Spanish construction industry. Land prices have dropped about 50 per cent. Property experts quoted in the Spanish press say that oversupply could take up to 15 years to clear. Spanish banks, many of which hold thousands of repossessed homes as assets, are legally obliged to start selling these homes after holding them for two years. As a result, more properties are expected to flood the market for sale this year. The property market has been struck by a double whammy of the global credit crunch following the Sub-Prime meltdown in the United State in 2007-08 and an oversupply of new homes for sale. Developers and property companies are going bust. A few have gone into bankruptcy. Others are mothballing their biggest projects while renegotiating their debts.

Spanish banks are also in trouble. They have given mortgage loans to the tune of €240 billion. Of these, Bank of Spain estimates that the total of risky and non performing assets at the end of June, 2010 was about €180 billion. The Spanish finance ministry and the Bank of Spain are engaged in a rapid, forced restructuring of the country's banking sector, focusing on the unlisted local savings banks. The central bank estimates that Spanish banks need a further €15.15 billion injection of fresh capital. Massive bailout of Spain and its banks seem inevitable.

One question which comes to mind is why so many homes were built. The simple answer is greed. Household debt in Spain has climbed from 75 per cent of disposable income in 1995 to 133 per cent in 2011.

Mr. Madoff and His Ponzi Scheme

Mr. Bernard L Madoff was an American stock broker, investment advisor and former non-executive chairman of the NASDAQ stock exchange. He had founded the Wall Street firm, Bernard L. Madoff Investment Securities LLC, in 1960, and was its chairman until his arrest by federal authorities on December 11, 2008. On March 12, 2009, Madoff pleaded guilty to 11 federal crimes and admitted to turning the wealth management division of his business into a massive Ponzi scheme that defrauded thousands of investors of billions of dollars. Madoff said he began the Ponzi scheme in the early 1990s. It was possibly the largest investment fraud ever committed by an individual.

A Ponzi scheme is a fraudulent investment operation that pays returns to investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever increasing inflow of money from investors to keep the scheme going. Unfortunately for Madoff, flow of new investment stopped in the wake of the Financial Crisis of 2007-08. The scheme is named after Charles Ponzi who became notorious for using the technique in early 1920.

On June 29, 2009, Madoff was sentenced to 150 years in prison, the maximum permitted, with fines of $170 million. Prosecutors estimated the size of the fraud to be $64.8 billion, based on the amounts in the accounts of Madoff's 4,800 clients as of November 30, 2008. Freezing of Madoff's personal and business assets by federal authorities created a chain reaction throughout the world's business and philanthropic community, forcing many esteemed organizations to close or stop for some time. Many like financial analyst Harry Markopolos had warned of possible fraud because he considered it impossible to legally make the profits Madoff claimed using the investment strategies that he claimed to use. No one took any notice.

Why did Bernard Madoff, a respected and wealthy investment professional and chairman of a 30 years old investment company start a Ponzi scheme? Why did almost 5000 clients, all experienced investors, fall for his scheme? The answer is greed. The lure of high fixed rate of return is irresistible to many. Madoff's fraud may have been the biggest Ponzi Scheme, but it was not the oldest. Similar frauds existed before 1920 when it got its name from Charles Ponzi. Such schemes, large and small, will exist as long as uncontrolled greed exists.

Collapse of Gold Sukh Trade India Limited

Gold Sukh Trade India Limited was a multilayered marketing company based in Jaipur, India. In November 2011, the Jaipur city police registered a case against the managing director and other directors of Gold Sukh Trade India Limited for allegedly duping at least 50,000 investors in the state of about Rs 3 billion (U.S. $60 million). They have also arrested two directors of the company. Angry investors, on realizing that they were duped, had reached the company's office only to find that the directors had fled. The city police have initiated formalities to get a red-corner Interpol notice issued against the absconding directors who are suspected to have fled to Bangkok. The company had promised the investors that they will provide 10 to 15 times return on investment in 18 months. It **had the following investment plans for investors:**

Plan-1: Invest Rs 6000 and this money doubles after every 45 days. Investor will earn Rs 163, 800 rupees in 18 months.

Plan-2: Deposit Rs 22,920 and earn Rs 2,620,800 in 18 months.

Plan 3: Deposit Rs 120,480 rupees and get Rs 17,690,400, in 18 months.

_Plan 4: Invest Rs 603,356 and get Rs 101,556,000 in 18 months.  
_

The promises were much better than what Bernard Madhoff offered in his Ponzi scheme. Absurd as the promises were, an estimate 50,000 to 150,000 Indians fell for them and invested their lives savings in the company only to loose their investment. Interestingly, the Reserve Bank of India had advised the state police to investigate the operations of the company. But the company had employed relatives of senior police and government officials as marketing agents. The police took no action till complaints of non payment began to surface in the media.

It is a fact that lax regulations contributed to the multi million dollar fraud. And there are hundreds of frauds being committed every year where people are offered very high interest rates, or offers to double or triple the investment in a short period of time. Selling gold plated bricks or coins instead of gold bricks and coins is another common fraud in India. Though all these cases receive a lot of publicity in the media, people still fall for such schemes. Human greed is overpowering.

Hatred and Intolerance

War on Terror

0n September 11, 2001, there were a series of four coordinated suicide attacks by Al Qaeda upon the United States. On that morning, 19 Al Qaeda terrorists hijacked four commercial passenger jet airliners in the United States. The hijackers intentionally crashed two of the airliners into the Twin Towers of the World Trade Centre in New York City, killing everyone on board and most of those working in the buildings. Both towers collapsed within two hours, destroying nearby buildings and damaging others. The hijackers crashed a third airliner into the Pentagon just outside Washington D.C. The fourth plane crashed into a field in rural Pennsylvania after some of its passengers and flight crew attempted to retake control of the plane, which the hijackers had redirected toward Washington, D.C., to target either the Capitol Building or White House. There were no survivors from any of the flights. Nearly 3,000 victims and the 19 hijackers died in the attacks. The overwhelming majority of casualties were civilians, including nationals of over 70 countries. Only about 55 who were killed in the Pentagon attack were military personnel. The United States responded to the attacks by launching the "War on Terror", invading Afghanistan to depose the Taliban, who had harbored Al Qaeda members. The war in Afghanistan continues. Though Bin Laden was killed by the United States forces in May 2011, Al Qaeda continues to be active in Afghanistan, Pakistan, Iraq, Yemen and East Africa. It has also vowed to avenge Osama's death.

Islamic terrorism is a term used for acts of terrorism committed by Muslims for the purpose of achieving political and religious ends. Islamic terrorism has been identified as taking place in the Middle East, Africa, Europe, Southeast Asia, Europe and the United States since the 1970s. It started with the Palestine liberation movement and its primary aim is to end American presence in the Middle East and its support for Israel. Islamic terrorist organizations have been known to engage in tactics including suicide attacks, hijackings, bombing markets and public transport, kidnapping and executions. They usually select soft targets and most casualties are civilian. Islamic terrorism received a huge boost in the 1980s when United States and Saudi Arabia poured about 40 billion dollars of cash and weapons through Pakistan's ISI to Muslim Mujahedeen (freedom fighters) fighting the Soviets in Afghanistan. Thus Al Qaeda and Taliban became the force that they are.

Bush may have declared the war on terror in 2001. But religious hostility between Christianity and Islam has existed since Muslim conquest of Spain around 800 AD and the first crusade around 1000 AD. Publishing cartoons on Prophet Mohammed in Europe or burning the Quran in the United States does not help in improving relations between the two religions. It is also not helpful that the battles between North and South Sudan and the civil war in Somalia are, in reality, battles between Muslims and Christians. Muslim hatred for the United States and its ally Britain has existed since the formation of Israel. President Obama may proclaim that the United States is not against Muslims. But actions of the United States are yet to confirm that. 9/11 may be the most devastating Islamic militant attack on the United States till today. It is certainly not the last. Till Christians and Muslims, Jews and Palestinians learn to live together in peace and harmony, global war on terrorism will continue and blood will continue to flow.

26/11 Terror Attack on Mumbai

Islamic terrorists from Pakistan launched a devastating attack on Mumbai, the financial capital of India, on November 26, 2008. The terrorists arrived by sea, split into four teams and launched their attacks. One team attacked the Chhatrapati Shivaji Terminus, Mumbai's oldest and most important railway station, firing indiscriminately and killing and wounding passengers on its platforms. On meeting resistance from the local police, the team moved to the Cama Hospital nearby and created mayhem there. Then they ambushed a police vehicle, killed three senior police officers and commandeered their vehicle. The terrorists then ran into a police checkpoint. In the firefight that ensued, one terrorist was killed and one captured alive but wounded. The second team fired randomly at Leopold Café, a restaurant almost exclusively patronized by foreign tourist, killing and wounding a large number of clients. They then raided a Jewish community centre nearby at Nariman House, Colaba and killed all the Jewish inmates. Only one child survived. The other two teams took over Oberoi Trident and Taj Mahal hotels and killed or wounded a large number of tourists and hotel staff, took hostages and fought pitched battles with Indian security forces. Both hotels were severely damaged and required millions of dollars to restore. The macabre drama continued for three days on live television till the last terrorist was killed. The attacks, which drew widespread global condemnation, killed 164 people and wounded at least 300.

Ajmal Kasab, the only attacker who was captured alive, disclosed that the attackers were members of Laskar-e-Taiba; a Pakistan based militant organization active in Kashmir and other parts of India. Evidence, mainly intercepted phone calls, suggested that the attackers came from Pakistan, and their controllers were in Pakistan. On 12 February 2009, Pakistan's Interior Minister Rehman Malik admitted that parts of the attack had been planned in Pakistan. A trial court on 6 May 2010 sentenced Ajmal Kasab to death on five counts. According to Wikileaks Pakistan's ISI is alleged to have been involved in the attacks.

The partition of British India into India and Pakistan in 1947 had not been amicable. It was preceded by the most horrific and violent ethnic cleansing when millions of Hindus and Muslims were murdered, raped and evicted from their homes by marauding mobs and pushed across the border. Hundreds of thousands died. Unlike the Hindu's in Pakistan, a large number of Muslims in India stayed back. India has the largest Muslim population in the world after Indonesia. Much of the bitterness of the partition has subsided with time. But the two neighbors have fought three wars over Kashmir. Kashmir dispute and India's role in the creation of Bangladesh has made normalizing relations between the two countries almost impossible. In 1980, Pakistani president Zia ul Haq adopted the strategy of weakening India with terrorist attacks. He called the strategy "bleeding India from a thousand cuts". Under this strategy the Pakistani Army and ISI sponsored a number of militant organizations like Laskar e Taiba, Hizbul Mujahedeen and Harkat ul Ansar for operating against Indian security forces in Kashmir and provided them with funds, weapons, recruits, training and bases in Pakistan Occupied Kashmir and Pakistan. Pakistan also encourages Indian Muslims to indulge in terrorist acts with funds and training. The terrorist attack on Mumbai on November 26, 2008 was the biggest attacks ever. But there have been many smaller attacks in many cities including an attack on the Indian parliament which almost resulted in an all out war between the two countries. Unless Pakistan gives up its hostile attitude and stops sponsoring acts of terrorism against India and the two countries learn to live in peace and harmony, there is always a danger of an all out war between the two nuclear armed neighbors with disastrous consequences for both.

Sectarian Conflicts

The developments in electronic communications and transportation have globalized the world to a large extent. Mobile phones capable of recording videos of events and the internet enables us to see international events like wars, disasters, revolutions, cultural and sports events etc. in real time. Global and local issues are being constantly discussed on television and internet. But all this exchange of information and opinions does not seem to reduce religious, racial or tribal hatred or intolerance. In fact there is evidence that sectarian violence is on the increase.

Let us start with racial intolerance. The oldest racial conflict is between the Jews and the Palestinians which is about 4000 years old. The conflict is over the right to the land between the Jordan River and the sea and the right to the ancient city of Jerusalem. The creation of an independent Palestinian state is being resisted by Israel and the United States. The conflict has the potential to escalate into a major war and is likely to continue for another 1000 years or till the end of the world.

Racial intolerance between whites and black races was seen in the form of Apartheid in the United States and South Africa. Though officially Apartheid is finished, racial tension between whites and blacks including racial attacks both verbal and physical are quite common in the United States, United Kingdom, Australia and some parts of Europe.

The conflict between the Tamils and Sinhalese in Sri Lanka dates back some 2500 years. The conflict was held in check during European colonial rule. It erupted again from 1983 to 2006 with the Sinhalese majority fighting the Tamil minority. The Tamils have been defeated but racial tensions still exist.

Racial conflict continues in Myanmar between the Burmese and the indigenous tribes. There are also racial tension between the Tibetans and Han Chinese in Tibet and the Uyghur and Han Chinese in the Xingjian Province of China. These conflicts are also more than a thousand years old. However, conflicts based on race are likely to remain localized unless major global powers take sides. They will adversely affect the local population but their effect is unlikely to be felt worldwide.

Sectarian religious conflicts also plague the world. The oldest and ongoing religious conflict, and perhaps the most irreconcilable, is between the Sunnis and Shiias. These two sects of Islam have been fighting each other since the war of succession that followed the death of Prophet Mohammad. Sunnis form the majority, accounting for about two thirds of the followers of Islam. They are the majority in all countries except Iran and Bahrain and are in power in all Muslim countries except Iran and Syria. But both the sects are to be found in all countries which have Muslims. The sectarian conflict between them is most frequent and violent in Pakistan where both sides frequently use suicide and roadside bombings to kill each other. It has manifested its ugly head in Syria where a civil war is a reality. Sectarian conflict between the Shiias and Sunnis is likely to remain localized unless there is an all out conflict between Iran and its allies and the Sunni Arabs of Saudi Arabia, Egypt and Pakistan. That could plunge the world, particularly Japan, China and India, into its greatest oil crisis.

The conflict between Christianity and Islam started with the Moor's conquest of Spain and Portugal around 800 AD. They clashed again during the ten crusades starting around 1000 AD and again during the Turkish conquest of the Balkans from 1300 to 1500 AD. The conflict continues today in the form of War on Terror and civil wars in Sudan and Somalia. However, the real conflict is between the liberal, permissive and secular western lifestyle and the male dominated conservative and intolerant Islamic lifestyle.

Religious conflict between Hindus and Muslims dates back to about 1000 AD when Muslim kings from Afghanistan and Central Asia started their campaign to colonize India. Such conflicts do flare up occasionally. But these are usually small scale and localized. Hindus and Muslims of India have, by and large, learnt to live together in harmony. However, fundamentalists on both sides try to disrupt the amity whenever possible to assert their importance. Attempts by Jihadist elements in Pakistan to carryout terrorist attacks on India or to liberate Kashmir by force could lead to an all out war between the two countries with devastating consequences for the Indian subcontinent.

Tribal conflicts are primarily seen in Africa. The most violent and gruesome tribal conflict in modern times was the civil war in Rwanda between the Hutus and the Tutsis. The Rwandan Genocide of 1994 was the culmination of longstanding ethnic competition and tensions between the minority Tutsi, who had controlled power for centuries, and the majority Hutu peoples, who had come to power in the rebellion of 1959-1962 and overthrown the Tutsi monarchy. During a period of approximately 100 days from the assassination of President Juvenal Habyarimana on April 6, 1994, between 500,000 and 1,000,000, or as much as 20 percent of the country's total population, mostly Tutsis and pro-peace Hutus, were butchered. In response to the killings, the Tutsis restarted their offensive, eventually defeating the Hutu government army, retaking the capital Kigali on July 4, 1994 and seizing control of the country. Approximately two million Hutus, participants in the genocide and bystanders, fled from Rwanda, to the neighboring countries in the fear of Tutsi retaliation. Thousands of them died in epidemics of diseases common to the squalor of refugee camps. Over a million returned to the country after 1996. Some groups of Hutu militants operated in eastern DR Congo until May 22, 2009. Peace has returned to Rwanda and the Hutus and Tutsis are learning to live together in harmony. May they succeed. Tribal conflicts have been seen on a smaller scale in Kenya, Nigeria, and Ivory Coast etc. But the turmoil due to these conflicts is likely to remain localized.

Arrogance

Hitler and Nazism

Hitler was appointed chancellor of Germany on 30 January 1933. He transformed the German Republic into the Third Reich, a single party dictatorship based on the totalitarian and autocratic ideology of Nazism. He believed in the racial supremacy of the Aryan-Nordic (German) master race. He ultimately wanted to establish a "New Order" (a new political order) of absolute Nazi German hegemony in continental Europe and finally the world. To achieve this, he declared the goal of seizing "Lebensraum" ("living space") for the Aryan people and directed the resources of the state towards this goal. He rearmed Germany and made the German armed forces, arguably, the most efficient fighting machine in the world.

Hitler commenced his campaign to realize his dream in 1939 when the German army invaded Poland and captured it in a matter of days. In response, the United Kingdom and France declared war against Germany, leading to the outbreak of World War II in Europe. In 1941, Hitler grandly declared: "The year 1941 will be, I am convinced, the historical year of a great European New Order."

The New Order, among other things, it entailed the creation of a pan-German racial state structured to ensure the supremacy of the Aryan Nordic master race, massive territorial expansion into Eastern Europe through its colonization with German settlers, the annihilation of the Jews, and the extermination, expulsion, and enslavement of most of the Slavic peoples. Hitler had an unshakeable conviction that the Reich will be the master of all Europe by 1945 and later master of the world.

Hitler first signed the German-Soviet Pact on 23 August 23, 1939, prior to launching the invasion of Poland to secure the new eastern border and to circumvent a shortage of raw materials for German industries. After taking Poland, Hitler launched the Blitzkrieg with his Panzer forces and captured Denmark, Norway, Luxemburg, Belgium, the Netherlands and France by the summer of 1940. But his attempts to bomb the United Kingdom into submission failed. Slovakia, Hungary, Romania, Bulgaria and Serbia were already satellites of Nazi Germany. Eastern Europe, except Russia was under Germany's ally Italy. Then on June 22, 1941, buoyed by his successes in Western Europe, Hitler launched Operation Barbarossa, the invasion of Russia. It was the start of the second phase of establishing the New Order. The long term objective of the operation, as detailed by Hitler in his book the Mien Kampf, was the incorporation of large territories in Eastern Europe up to the Ural Mountains for German settlements. German women were encouraged to have as many children as possible to populate the newly acquired Eastern territories. An honor known as the "Gold Honor Cross of the German Mother" was awarded to German women who bore at least eight children for the Third Reich.

The grand plan of Hitler and his arrogant Nazis failed. By April 30, 1945, the German army had been defeated, Berlin had fallen to the Soviet troops and Germany had been completely devastated by Allied Bombing. Hitler's target for establishing the New Order in Europe had collapsed. Hitler committed suicide. But his arrogance committed Germany to a war in which almost six million German military personnel and over eight million civilians died. Estimates for the total casualties of the war vary. Most suggest that some 60 million people died in the war, including about 20 million soldiers and 40 million civilians. May God save the world from arrogant and powerful world leaders.

Conclusion

Human failings are as old as human history. That is why God had to lay down the Ten Commandments to the people of Israel and through the Bible to all Christians. But who listens? Failings of ordinary individuals cause sufferings to individuals or small groups of people. Profiteering and polluting by multinational corporations, greed and shady deals of banks and financial institutions, corruption of government officials and politicians can cause misery to hundreds of thousands. Sectarian conflicts based on race, religion and tribes bring misery to thousands around the world. The arrogance and interventionism of world's powerful leaders can cause devastating damage and misery to millions of people of this world. May God save the world from multinational corporations, investment bankers, religious and tribal leaders, and world's political leaders, and especially from the president of United States.

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Chapter 8: Economic Decline Of The Developed World

The Rational Pessimist is concerned about the economic decline of the developed nations. The decline is not a figment of his imagination. Goldman Sachs is now predicting that the largest developing economies namely Brazil, Russia, India and China, also known as the BRIC countries, will overtake G7, the seven largest economies of the developed world, in size of their economy. (Briefings; Time Magazine April 4, 2011). Fareed Zakaria, the well known author, TV anchor and correspondent has written the book, "The Post-American World". The decline is the direct result of neo-liberal capitalist, free market and deregulated economic policies of the governments of the developed nations led by the United States and the United Kingdom. Let us start by looking at evidences of the decline.

Decline of the United States

At the end of the World War II, United States emerged as the richest country in the world. However, by 2010, it had become the world largest debtor nation in the world with a government debt of over $ 14 trillion. Let us look at evidences of the economic decline of the United States.

Public Debt in the United States

The US debt has doubled to over $ 14 trillion between 2006 and 2010. It is expected to double again in the next debate. Of this about $ 9.5 trillion is in tradable Treasury Bonds. $ 3.4 trillion worth of these bonds is held within the United States. Of the balance, $ 1.3 trillion is held by China, $ 886 billion by Japan and the balance by other countries like Brazil, Saudi Arabia, Kuwait etc. The Standard & Poor has issued a warning that the United States may not be in a position to repay its debt. China has been saying that the American dollar should be replaced as the worlds trading currency by an SDR.

Excessive sovereign debt can be dangerous even for super powers. At the time of the World War II, Britain was the world's main super power and the British Pound was the global currency. Britain was deeply in debt to the United States after World War II. President Eisenhower used this leverage to make the American Dollar the world's reserve currency in place of the British Pound. The United States replaced Britain as the pre-eminent global power. China is the United States largest creditor holding over two trillion of dollar assets. Can China use its financial muscle to remove the American dollar as the world's reserve currency? In such a scenario, the United States will not be able to finance its imports and trade deficit by printing dollars. If China announces large scale sale of US Treasury Bonds, the effect could be disastrous. Borrowing costs will sky rocket. Some experts do not agree with this threat. They argue that in such a scenario, the value of the dollars held by China will also fall and would amount to the Chinese shooting themselves in the foot. Arguments and counter arguments can continue. The optimists are quite comfortable with the American debt. The Rational Pessimists are not. Even the Republicans in the United States have become apprehensive about the United States debt. They have been resisting President Obama's proposal for raising the debt ceiling.

The debate on how to deal with the piling debt is amusing. The Republicans want the Administration to do this by saving money by reducing expenditure on social security, healthcare etc while reducing corporate taxes which benefit the rich and the big business. The Democrats want to increase social security and healthcare by raising more money by ending tax holidays and increasing taxes. The Pacifists want to reduce the deficit by reducing the defence expenditure by pulling out of Afghanistan and other hot spots around the globe. What is missed in the debate is that government budget and individual budgets are two different things. Government budget deficit can be bridged by issuing Treasury Bonds or simply printing more money. Individual budget deficits can only be balanced by real earnings. Can the Democrats and Republicans ever get together and focus on the survival needs of the 99 percent of the American people, increase manufacturing, discourage imports, improve trade balance trade and generate employment. If that means the end of globalization or neo-liberal capitalism, so be it. Generating employment will reduce the social security expenditure and that is one way to reduce the deficit and save the economy.

Trade Deficit in the United States

According to the United States Census Bureau Foreign Trade Division, fifteen largest trading partners of the United States accounted for 75.0% of U.S. imports, and 72.5% of U.S. exports as of December 2010 These figures do not include services or foreign direct investment, but only trade in goods. If we examine the balance of trade between the United States and its top fifteen trading partners for the year 2010 we find that it has a deficit with twelve of them. With Canada it has a deficit of $28 billion, with China $273 billion, with Mexico $66 billion, with Japan $60 billion, with Germany $34 billion, with South Korea $ 10 billion, with France $11 billion, with Taiwan $10 billion, with India $10 billion and with Venezuela $22 billion. It has surpluses with Brazil $ 6 billion, Netherlands $16 billion and Singapore $12 billion. The United Kingdom is not included in the table as the trade balance in almost zero. It will be seen that United States has a surplus trade balance with only three of its top 15 trading partners. The deficits with Venezuela, Mexico and Saudi Arabia are mainly on account of import of crude oil. The deficits with the others are mainly due to import of consumables and manufactured goods. The U.S. has held a trade deficit starting late in the 1960s. Its trade deficit has been increasing at a large rate since 1997 (See table below). A record high of 817.3 billion dollars was recorded in 2006. After the crash of 2008, the trade deficit fell to about 400 billion dollars in 2009 and then rose to about 500 billion dollars in 2010. The United States trade deficit rose from $100 billion in 1997 to $700 billion in 2008.

Some economists believe that GDP and employment rate of a country can be dragged down by large trade deficits over a long period. Others believe that trade deficits are good for the economy. The successful American businessman and investor Warren Buffet was quoted in the Associated Press (January 20, 2006) as saying "The U.S trade deficit is a bigger threat to the domestic economy than either the federal budget deficit or consumer debt and could lead to political turmoil... Right now, the rest of the world owns $3 trillion more of us than we own of them." Mr. Buffet has recommended that the United States should try to balance its trade. The Rational Pessimist agrees with him.

Unemployment and Under Employment in the United States

Unemployment statistics keep changing. Unemployment in the United States rose from about 5 percent in 2000 to 10 percent in 2010 before dropping back to 8.6 percent in 2011. These statistics do not hide the pain of being unemployed and being unable to earn or being under employed. Take the example of an interior decorator who was earning a six figure salary and is now forced to work as a beautician's assistant for about $ 30000 a year. HSBC Bank has decided to lay off about 30,000 employees to generate $ 2-3 billion profit. Most of the layoff will be in the United States and many of the well qualified employees will be forced to work as sales assistants at departmental stores or waiters etc at a pittance of their earlier earnings. That is if they find employment at all. Employment is an important part of every person's life. It defines who we are. Without work we often feel socially excluded. For young people, finding a stable job is also a symbol that marks the transition from childhood to adulthood. It gives them a certain degree of economic security that is often a prerequisite for parenthood. The situation is pretty desperate for many Americans. As per Time Magazine issue of April 5, 2010, the number of unemployed candidates per job in the Government win 4th quarter of 2009 was 2.3; for Education and healthcare 2.3; professional and business services 3.5; information technology 3.8, financial services 4.0, wholesale and retail 6.4; leisure and hospitality 7.2; manufacture of non durable goods 7.5; manufacture of durable goods 16, transportation and utilities 11.3, oil and gas extraction and mining 14.2 and construction 34.8.

Creating jobs is obviously a major priority for the Federal and State Governments. But nobody seems to know how to do it. The Congress passed a job creation bill on March 17, 2010 which provided about $ 13 billion worth of tax benefits to coax companies to add to their pay rolls. It has not produced any major effect on the job market. Lack of demand for goods and services is suggested as the major reason for lack of jobs. People complain that the great American consumer is now over indebted, unemployed or under employed and endowed with a new sense of thrift or caution. They are consuming less. This is no doubt true to some extent. But the Rational Pessimist is unwilling to buy this logic. The United States still imports and consumes trillions of dollars worth of durable and non durable goods from the developing countries like China, Korea, India, Taiwan, Malaysia, Thailand, Bangladesh as also from Europe and Latin America. The real problem, as stated by Chinese Premier Wen Jiabao in an interview to Fareed Zakaria on October 3, 2010, is that many of the items that the United State imports from China are no longer produced in the country. If the United States did not import the items from China, they would still have to import them from other countries. The exchange ratio between the dollar and the Yuan or any other currency is not the problem. The real problem is that the United States has forgotten how to produce what it consumes or has succumbed to lobbying by corporations like Wal-Mart who make billions of dollars of profit by buying or manufacturing in the developing countries and selling in the United States. Wealth producing primary sector jobs in the United States such as those in manufacturing and computer software have often been replaced by much lower paying wealth consuming jobs such those in retail and service sector. Some economists contend that the United States. is borrowing to fund consumption of imports while accumulating unsustainable amounts of debt. On June 26, 2009, Jeff Immelt, the CEO of General Electric, called on the United States to increase its manufacturing base employment to 20 percent of the workforce. He commented that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand.

The optimists see tax holidays and other sops for the industry and corporations as the only way to reduce unemployment. The Rational Pessimist believes that the only way to achieve sustained and permanent growth of employment is for the United States to produce most of what it consumes. In view of lower wages in the developing world, that will require reverting to old fashioned protectionism for domestic industries, increased duty on imports and subsidizing domestic industrial products in the same way as agricultural products are subsidized to be competitive with Third World prices. Jobs are created by producing goods and services and not by consuming products of other countries. The labour force will require to be retrained accordingly.

Hunger in the United States

There has been a dramatic increase in hunger in the United States in recent years. 6.7 million US households had to skip a meal or meals because there wasn't enough money to buy food at some time during 2008. The number represented a 39 percent increase from 2007. This was the largest increase ever recorded since nationally representative food security surveys were initiated in 1995, as well as the largest year-to-year percentage increase. 10.4 million US households had to eat less varied diets, participate in Federal food assistance programs, or get emergency food from community food pantries in 2008, a 27 percent increase from 2007.

The United States has a number of food and nutrition assistance programs. In addition there is a significant private effort to feed hungry people through food banks and allied agencies.

The Food Stamp Program helps roughly 40 million low-income Americans to afford a nutritionally adequate diet

The Special Supplemental Nutrition Program for Women, Infants and Children (WIC) provides nutritious foods, nutrition education, and referrals to health and other social services to low-income pregnant and breastfeeding women, and infants and children up to age 5 who are at nutrition risk. The participants receive checks or vouchers to purchase nutritious foods each month. About 8.7 million Americans received WIC benefits each month in 2008. Approximately 4.3 million of them were children, 2.2 million were infants, and 2.2 million were women

The National School Lunch Program is a federally assisted meal program that provides nutritionally balanced, low-cost or free lunches to children from low income families. It benefited 30.5 million children in 2008.

Food banks established in local communities obtain food from growers, manufacturers, distributors and retailers who in the normal course of business have excess food that they cannot sell. Other sources of food include the general public in the form of food drives and government programs that buy and distribute excess farm products, mostly to help support higher commodity prices. Food banks then distribute food to a large number of non-profit community or government agencies, including food pantries, soup kitchens and homeless shelters.

America's Second Harvest, the nation's largest network of food banks, reports that 23.3 million people turned to the agencies they serve in 2001, an increase of over 2 million since 1997. Forty percent were from working families. 33 million Americans continue to live in households that did not have an adequate supply of food. Nearly one-third of these households contain adults or children who went hungry at some point in 2000.

Poverty in United States

Poverty is a reality in America, just as it is for millions of other human beings on the planet. According to the US Census Bureau, 35.9 million people out of the population of 300 million live below the poverty line in the United States. This includes 12.9 million children. In 2010, the number of American homes with TV fell from 98.9% to 96.7%, the first time that the number has dropped in 20 years. (Briefings, Time Magazine May 20, 2011).

The main causes of poverty in the United States is the political and economic system in the United States which has tended to increase corporate profits by shifting manufacturing to developing countries and importing the products, out sourcing business activities and employing non Americans in places of Americans to reduce the salary costs. All these practices keep people from poor families poor. In 2009, 43.6 million people were classified poor, up from 39.8 million in 2008 and 37.3 million in 2007. The nation's official poverty rate in 2009 was 14.3 percent, up from 13.2 percent in 2008. Between 2008 and 2009, the poverty rate increased for children under the age of 18 from 19.0 percent to 20.7 percent. Thus, one in five children in the United States lives in poverty. Almost half of these children (9.3 percent) live in extreme poverty. 19 million Americans (6.3 percent) live in extreme poverty. This means their family's cash income is less than half of the poverty line, or less than about $11,000 a year for a family of four. The percentage of people without health insurance increased to 16.7 percent in 2009 from 15.4 percent in 2008. The number of uninsured people increased to 50.7 million in 2009 from 46.3 million in 2008. Crime is becoming a way of earning a living. Unemployed men are not willing to marry. This in turn leads to single parent families. People living in poverty can develop patterns of behaviour such as alcoholism which is harmful to society. The United States is ranked 21st on the World Human Poverty list. Single parent households make up 60 percent of the poor families. The US spends less than 1 per cent of GDP on poverty alleviation.

The poorest community in the US is the Pine Ridge Indian Reservation. It has 85% unemployment, 97% poverty, life expectancy 50, teenage suicide 4 times the national average, and infant mortality 5 times the national average. Many families don't have electricity, tap water or sewer. The US has 3.5 million homeless and 1.3 million are homeless children, with 4 percent under the age of 5. Half of all homeless women and children are fleeing domestic violence. Families make up 33 per cent of the homeless population. Veterans account for one third of the homeless in America. 45 percent of homeless population are single males, and of those 40 per cent are veterans. 15 to 22 per cent of the homeless are employed.

The US political system, which should address the major problems of its citizens, is to a great extent, not focused on fundamental concerns of poor people. Their concerns are for the rich and the corporations. Military and security expenditure represent half of US federal government discretionary expenditures. The United States gives $ 2 billion per year each as aid to Israel and Egypt, about $ 1.5 billion per year to Pakistan, a country whose defense and intelligence establishments supports Al Qaeda and Taliban who are killing U.S. and NATO troops in Afghanistan. What does it spend on Indian Reservations and on the victims of natural disasters like flood, storms, droughts and manmade disasters like the Gulf Oil Spill? Corporations and the rich, through their ability to lobby the Congress and the Administration by spending large amounts of money on lobbying efforts and on political campaigns of elected officials, have succeeded in getting their way, including tax breaks and subsidies. There is also a culture of acceptance of inequality and poverty.

Unfortunately, social security programs, food security programs and other unemployment benefits do not remove poverty. They alleviate poverty. Only creations of jobs and other incomes which can push households over the poverty threshold of the country can remove poverty.

Education in the United States

School education in the United States is mainly provided by the public sector. Funding is at three levels: federal, state and local. Child education is compulsory. About 10 percent students attend private schools. The country has a reading literacy rate at 99 percent of the population over age 15. However United States ranks below average in science and mathematics understanding when compared to other developed countries. In 2008, the graduation rate from high school was 77 percent. That is also below that of most developed countries. More than $500 billion is spent each year on primary and secondary education. Nearly 6.2 million students between the ages of 16 and 24 dropped out of high school in 2007. The dropout rate among African Americans is much higher than the national average. In 2010, American students ranked 17th in the world in terms of academic proficiency.

The economic recession post 2008 has affected almost every aspect of American life, including education. Funding for public education has been cut as many states of the United States face budget problems. One of the places hardest hit is the western state of California. Thousands of teachers have lost their jobs there. There will be 30 students per classroom rather than 20 due to cuts in funding. Some projections estimate that across the country, 160,000 teachers have received lay off notices in 2010. United Teachers Los Angeles union President A.J. Duffy says that between 2007 and 2010, the state of California has lost $20 billion in funding for public education. If the state's budget problem does not improve, schools will have to do without librarians and nurses. Some schools will have to be closed and combined with others. U.S. public schools lag behind the schools of other developed countries in the areas of reading, math, and science. The situation is so bad that President Obama has been urging American students to improve their mathematics and science skills to prevent Indians and Chinese taking their jobs.

College or University education in the United States consists of four years of study at an institution of higher learning. There are 4,352 colleges, universities, and junior colleges in the country. In 2008, only 36 per cent of enrolled students graduated from college in four years. 57 per cent completed their courses in six years, at the same college they first enrolled in. The United States is ranked 10th among industrialized countries in terms of percentage of adult population that has college degrees. In 2007, the United States stood 15th out of 29 rated nations for college completion rates, slightly above Mexico and Turkey.

A vast majority of students (up to 70 percent by some estimates) lack the financial resources to pay tuition fees up front and must rely on student loans or scholarships from their university, the federal government, or a private lender. The United States is ranked 37th in the world in education spending as a percentage of GDP. Annual undergraduate tuition varies widely from state to state. In 2009, average annual tuition fee at a public university for residents of the state was $7,020. Depending upon the type of school and program, annual graduate program tuition can vary from $15,000 to as high as $50,000. Please note that these amounts do not include living expenses like room rent, food cost etc. These fees, especially room and board, can range from $6,000 to $12,000 per academic year for a single student. The mean annual total cost (including all costs associated with a full-time post-secondary schooling, such as tuition and fees, books and supplies, room and board), as reported by collegeboard.com for 2010 was about $ 28,000 per year for a Public University and $ 40,500 per year for a Private University. Between 1982 and 2007, college tuition and fees rose three times as fast as median family income, in constant dollars. It will be seen that most American families cannot afford college education for their children.

As per Times Higher Education World University Rankings, the US dominates university education with 27 of the top 50 places and has a total of 72 institutions in the top 200 table. It has more than twice as many universities represented in the top 200 as its nearest rival, the United Kingdom, which has 29. Only a small percentage of American students, who apply to these universities, gain admission. Most American students attend one of the 2,400 colleges and universities which are not included among the twenty-five or so 'top-tier' institutions. With jobs in manufacturing and IT getting outsourced to developing countries or given away to foreigners with H1b visas, job and salary prospects of American college graduates is dwindling by the year. It is natural that less and less Americans will seek college education in technical fields. The declining standards of education amongst Americans and the United States dependence on foreign rather than home grown talents for preserving their lead in technology and innovation is a clear indication to the downward slide of the United States. The government of the United States does not seem to care.

Decline of Europe

Europe dominated the world both economically and militarily from around 1750 to 1945. The British Empire covered 25 percent of the earth. Other European countries had colonized most of the rest of the world. Europe produced over 90 percent of the world's industrial production till 1920s when American manufacturing started eating into its market share. Today, most governments of Europe have large budget and trade deficits. These deficits are made up by government borrowings or simply by printing more currency. Financing needs for the Euro zone governments in 2010 came to a total of €1.6 trillion. The amount was raised in government bonds by its 30 member countries. Some of these countries have faced difficulties in selling the bonds in the markets because of rising debt levels and falling ratings of their debt. Even countries such as the France, Germany and the UK, have had difficult moments when investors shunned bond auctions due to concerns about public finances and the economy.

Before the formation of the European Union, European countries were free to follow independent monetary policies and print their requirement of money. But after introduction of the Euro, this was not allowed. The global financial crisis that began in 2008 had its effect on these countries. Industries like tourism, banking and shipping were affected. To keep within the monetary union guidelines, the governments of some countries have been found to have consistently and deliberately misreported the country's official economic statistics.

European Debt

The state of European government debt is another indication of the decline of Europe. Statistics of European government debt will keep changing. But what is alarming is the rate at which it is growing. Government debt as a percentage of GDP of Britain increased from 48 percent in 2006 to 91 percent in 2011. In France it increased from 73 percent to 99 percent during the same period. In Germany it increased from 72 percent to 84 percent; in Greece it increased from 112 percent to about 150 percent; in Ireland it increased from 28 percent to 93 percent; in Italy from 120 percent to 135 percent; in Portugal from 74 percent to 99 percent and in Spain from 48 percent to 78 percent.

Europe emerged as a welfare state after the World War II with generous labour laws providing permanent employment and social security including health care, unemployment and old age benefits. The incomes of the governments have shrunk after decolonisation. So it is natural that European governments will have cumulative budget deficits which have to be covered by public borrowing or printing of currency. With the creation of the Euro Zone, the latter option of printing currency is not available to European countries listed above except Britain. There were three main reasons for the sudden growth in debt after 2006. All the reasons are attributable to the global financial meltdown of 2007-2008. Firstly, the governments had to bail out their banks and financial institutions with huge injection of funds. Secondly, there was a surge in expenditure on unemployment benefits. Thirdly, there was a reduction in tax revenues due to decrease in economic activity due to recession. Government debt is manageable as long as governments can borrow money at reasonable rates. However, when a government is unable to borrow money at a reasonable rate, there is a risk of sovereign default and a bailout by the European Central Bank or IMF or both becomes necessary. Bailout is usually accompanied by demands by the lenders that the government introduces austerity measures, reduces deficit in the short term and generates surplus in the long term so that it can repay its debt. European nations negotiating bailouts or close to a debt crisis are Portugal, Ireland, Italy, Greece and Spain. Government debts, like individual debts have to be repaid.

When governments are unable to repay money borrowed, a default takes place. The value of the bonds is rated as junk. The governments are unable to raise more money. They usually approach the IMF for a bailout. The austerity measures which usually accompany IMF bailouts are painful for the ordinary citizens and usually include the following:

Reduction in public sector salaries, bonuses, overtime pay and pensions. This increases financial hardship of the poor.

A special tax on high pensions.

Changes to the laws to facilitate lay-offs. This increases unemployment.

Increased taxes on company profits and rich individuals.

Increases in VAT resulting in rise in prices.

Rise in luxury taxes and taxes on alcohol, cigarettes, and fuel.

Increase in average retirement age for public sector workers to 65. The measure reduces outlay in payment of pensions and retirement benefits in the short term but increases unemployment and frustration among younger people seeking to enter the workforce.

Closure of poorly performing public sector companies. This again raises unemployment.

Reduction in subsidies or government expenditure in education, health care and other forms of social security.

Austerity measures are deeply unpopular. They are resisted by the people affected and violent protests follow. Ireland went from boom to bust in 2008 when hidden bad loans in the Anglo Irish Bank brought it to the verge of collapse. The bank had to be nationalized in 2009. There have been violent protests in France over increasing the retirement age to 65. There have been violent student's protests in UK over the raising of tuition fee in colleges. A nationwide general strike was held in Athens in May 2010 to protest to the planned spending cuts and tax increases. Three people were killed, dozens injured, and 107 arrested. The governments of Ireland, Spain, Italy, Greece and Portugal have had to resign in face of no confidence motion brought in by coalition partners in face of unpopular austerity measures.

All European nations have large budget deficits. Almost all European nations except Germany have a negative current account balance or increasing foreign currency debt. The optimists naturally believe that things will get better. The Rational Pessimist believes that European countries will have to generate surpluses by reducing imports and producing what they consume. They may even have to increase taxes on imports to enable local products to compete with imported products. If they want to survive, they will have to put nationalism over globalisation.

Unemployment in Western Europe

Western European countries like Iceland, Switzerland, Denmark, Norway and the Netherlands have the highest employment to population ratio. But in the rest of Europe, the unemployment situation is worrisome. The average unemployment rate at over 10 percent is worse than in the United States. Spain is worst off with an unemployment rate of about 20 percent. Bright young Italian graduates, unable to find work in their own country have found work in developing countries like China and Dubai. The two reasons most frequently bandied about for the state of unemployment are archaic labour laws and lack of demand due to recession. The first is true. The retirement and retrenchment benefits in some countries are so high that they make the cost of production uncompetitive. It makes it difficult for employers to adjust their strength according to the profitability of the business. It also makes companies reluctant to have permanent employees. So contract employment seems to be the order of the day with very little job security, growth prospects and hence motivation. European nations will have to find a middle path between guaranteed life long employment and crass exploitation of the labour force by the employers. One way as practiced in Singapore is to deduct retirement and provident fund benefits from the salaries of the employed and giving it back to them in lump sum or monthly pension incomes after retirement. The second reason of lack of demand is unacceptable. Western Europe has one of the wealthiest consumer bases. It imports and consumes trillions of Euros worth of goods and services. So the problem is not about demand. It is about local products not being able to compete with cheaper imports from developing countries. With the difference in the value of the Euro and the currencies of the developing world, the situation can never change. It is said that Europe provides its farmers a subsidy of $ 2 per day per head of cattle. The same kind of support has to be given for European manufacturers of durable and non durable products. Alternately, import duties have to be raised to protect domestic industries. This will be more advantageous to governments as it will increase their incomes. The measures will increase the price of products. But that will happen in any case when the Euro is devalued in comparison to the currencies of developing nations.

A successful manufacturing story is the revival of the British cars Aston Martin and Jaguar Land Rover (JLR). The JLR was taken over by India's Tata Motors for $ 2.3 billion in 2008. After a slump in sales in 2009, the sales have picked up 17 percent and the company made a profit of over $ 45 million in 2010. Manufacturing is possible and can be profitable even in Europe if effectively managed.

Poverty in Europe

In Europe, poverty is defined as having to live with 60 percent or less of the median income. In UK in 2009 it was about $ 22000 per year for a family of four. These sums of money are measured after income tax, council tax and housing costs including rent and allied charges have been deducted. In 2008/09, 13.5 million people in the UK or about 22 percent of the population were living in households below this low income threshold. This is an increase of 1.5 million compared with 2004/05. Inner London has by far the highest proportion of people in low income but also has a high proportion of people on a high income. The UK has a higher proportion of its population in poverty than most other EU countries. Of the 27 EU countries, only 4 have a higher poverty rate than the UK. The proportion of people living in relative low income in the UK is twice that of the Netherlands and 1.5 times that of France. The number of children living in poverty increased from 3.3 million in 2004/05 to 3.9 million in 2008/09.

The proportion of Spaniards living below the poverty line grew to 20.8 percent in 2010 from 19.5 percent in 2009. The bursting of the property bubble plunged the Spanish economy, Europe's fifth largest, into its worst recession in decades in 2008 and sent the unemployment rate soaring to more than 20 percent, the highest in the Euro zone. The 2010 Living Conditions Survey of the National Statistics Institute report shows that almost 25 per cent of boys and girls under 16 years old live below the poverty line. According to data from the Ministry of Education, of Spain, 31 percent of the population aged between 18 and 24 years had not completed compulsory secondary education in 2009. In the last three years, the school dropout rate has increased and the youth unemployment rate is over 45%. There has been a clear increase in the lack of motivation and professional objectives among children and teenagers within poor families or in a situation of unemployment, poverty or social exclusion. The situation is not very different in Italy, Greece and Portugal.

Other Problems of the Developed World

Tax Evasion and the Developed World

The government finances of the developed countries have been in doldrums ever since the global financial meltdown of 2007-08. This has suddenly changed the attitude of the governments to tax havens and tax cheats from benign tolerance to serious concern. It was earlier assumed that despots, dictators and corrupt politicians and businessmen of the third world parked their undeclared wealth with Swiss banks and other tax havens. This was welcome as the funds were invested in the developed world and helped their economies to grow. In June 2007, an employee of the Swiss bank UBS flew to Washington and handed over documents that revealed that the bank had been assisting thousands of American taxpayers to illegally hide billions of dollars of income. The event has prompted the United States and European governments to expand their hunt for tax cheats. The off shore wealth management business is widespread. The money handled by major tax havens in 2009 were Caribbean Islands and Panama $ 900 billions, UK, Channel Islands and Dublin $ 1.9 trillion, Luxemburg $ 800 billion, Switzerland $ 2 trillion, Hong Kong and Singapore $ 700 billion. The US and Germany are cracking down on tax evaders and foreign banks that assist them. Under a new US law, all foreign banks have to inform the Inland Revenue Service (IRS) about all American tax payers who have undeclared accounts in their banks by 2013. It is surprising that the developed nations who have the financial and military clout to take on armies of Iraq and Libya cannot quickly windup these tax havens and banks which provide "wealth management" sic tax evasion services which are hurting their war on government deficits. As per one estimate, Greece looses $ 20 billion in taxes per year due to tax evasion. Effective tax compliance will go a long way in improving the debt situation of governments of the developed and the developing world.

Banking in the Developed World

The financial crisis of the 21st Century did not originate in the developing economies of Mexico, Latin America or Asia. They occurred in the supposedly safe havens of the United States and Europe. The seeds of the problem were sown with the removal of regulatory mechanism for financial institutions in the United States in the 1980s. Banks make profit by lending money deposited with them. With the decline of manufacturing in the developed world, reduction in the demand for loans from companies with the exception of the housing industry decreased. At the same time the top management of banks wanted to increase profits and earn multi million dollar bonuses. Banks became aggressive in their lending. More risky the loan, higher was the interest rate. The US banks borrowed from European banks at high interests and lent to the Sub-Prime Mortgage sector. Banks leveraged their capital 15 to 30 times in search of profits. The problem started when the property bubble in the United States burst and prices of properties fell below their mortgage prices. That meant that banks could not recover bad loans by selling the property mortgaged. The house of cards built on greed of the banking community began to unravel in September 2007.

The global meltdown of 2007-08 started with the collapse of Lehman Brothers and collapse of the share prices on Wall Street and other bourses around the world. Bear Sterns was sold to J P Morgan Chase who was lent $ 30 billion by the government for the purchase. Freddie Mae and Fanny Mac were nationalized with capital injection of $ 400 billion. AIG was given a credit guarantee of $ 85 billion and later recapitalized with $ 180 billion. Citigroup were given $ 280 billion and Bank of America $ 142 billion. All this was done with tax payer's money. The US government is grappling with its debt while the bankers are making merry with the money. The situation can be gauged from the fact that while only 25 banks went burst in the US in 2008, 140 went bankrupt in 2009, 158 in 2010 and 31 till May 2011.

The financial crisis of 2008 quickly spread from the United States to Europe. The problem started in Iceland in 2007 when its banks and currency collapsed. The United Kingdom came out with an $ 850 rescue package for the major banks in the United Kingdom in 2008. The Northern Rocks Bank had to be nationalized. A number of banks in Ireland, Belgium and Spain had to be either nationalized or bailed out. The debt crisis in Ireland and Spain stems from the banking collapse.

After the financial crisis of 2008, the banking industry all round the world secured massive bailouts by convincing the US and European governments that banks make the real economy grow. They argued that banks provide money for creating and running businesses. If banks are not healthy, no one else can be healthy. However, economic growth in the developed world has been sluggish and demand for funds from businesses houses has not been very high. So the money has found its way to the stock markets of the United States and Europe and share prices have recovered most of their losses. Rise in speculative business or the financial sector reduces the desire to invest in agriculture, manufacturing or services. This in turn reduces the chances of generating employment, reducing trade and current account deficit or reducing poverty. Another asset and commodity bubble is in the making. The reality is that 40 percent of GDP of the United States is expected to come from firms that did not exist in 1980. Nearly all new jobs in the United States are created by firms less than five years old. The political emphasis should not be on bailing out old companies and banks but on helping new ones to start and grow.

Banks of developing countries like Brazil, India, China and the Asian Tiger Economies are mostly well capitalized and run conservatively. They are also well regulated by their central banks. They have not needed any bailouts.

External Debt of Developed Nations

External debt or foreign debt is that part of the total debt that a country owes to creditors outside the country. The debtors can be the government, corporations or private individuals. The debt includes money owed to private commercial banks, other governments or international financial institutions like the World Bank and IMF. High external debt is believed to have harmful effects on an economy. There are various indicators for determining a sustainable level of external debt. These indicators can be thought of as measures of the country's "solvency" in that they consider the stock of debt at certain time in relation to the country's ability to generate resources to repay the outstanding balance. Rating agencies like the Standard and Poor rate the debt repayment capabilities of nations. The interest rates at which governments can borrow money is another indication. United States has the highest external debt of over $14 trillion. It can afford it without devaluation of its currency because the USD is the worlds reserve currency. The total external debt of the Euro-zone is also over $14 trillion. Per capita external debt in USD of United States in 2010 was $46,577; of Britain it was $144,757; of Germany it was $ 57646; of France it was $74,410; of Italy it was $39,234 and of Spain it was 52,188. In comparison per capita external debt of Russia was only $ 2611, of China it was $7000, of Brazil it was $1129 and India was $187. As percentage of GDP, external debt of the United States was 97 percent in 2010. For the Euro-zone it was 120 percent; for United Kingdom it was 398 percent; for Germany it was 143 percent; for France it was 188 percent. In comparison for Russia it was 21 percent; for China it was 7 percent; for Brazil it was 14 percent and for India it was 18 percent. It will be clear from the above figures that the external debt of the developed countries is very large compared to that of the most prosperous developing nations. At the same time, their foreign exchange reserves are miniscule compared to their external debt and that of the developing nations. The large external debt may not hurt the United States too much because the dollar is the world's reserve currency. But Europe is already in trouble with Spain, Portugal, Ireland and Greece negotiating bailouts from IMF and the European Central Bank.

Current Account Balance

The current account balance is another indication of the economic health of nations. The current account is the sum of the balance of trade (exports minus imports of goods and services), net income from interests, dividends and profits from foreign investment and net transfer payments such as foreign aid and remittances received from persons working abroad. A current account surplus indicates that a country's net foreign exchange assets increased by the corresponding amount, and a current account deficit does the reverse. Both government and private payments are included in the calculation. The table below shows the current account balances of some developed and developing nations. As per the CIA Fact Book 2010, the current account balance of the United States was - $561 billion, of United Kingdom – $40.3 billion, of France - $53.3 billion, Spain -$66 billion. Only Germany has a surplus of $162 billion. In comparison Russia has a current account surplus of $9.5 billion and China $272 billion. Of the developing countries Brazil has the highest current account deficit of $52 billion with India having a deficit of $26.9 billion. It will be seen that only Germany, Russia and China have positive balances. The negative balances of the developed countries are much higher than that of the top developing economies.

Reasons for the Decline of the Developed World

Much has been written and discussed on television channels about the economic situation, debt, unemployment etc of the United States and European countries. Much is also being written about the need for austerity at government level and reducing government deficits. However, I have not come across a single objective analysis of the reasons for the situation. Nor have I come across a single meaningful suggestion regarding the long term solution to the problem. Writers and commentators in the United States keep talking about the value of the Chinese Yuan, defense expenditure and need to cut on social security and Medicare expenses. But no one talks much about shifting of manufacturing and jobs, immigration and other problematic issues. Unless these core issues can be solved the downward slide of the economies of the developed countries cannot the arrested.

Shifting of manufacturing and jobs

Developing countries have a lot of cheap labour, but relatively little capital. There is a theory of economics called the "price equalization theory". This theory states that wages in rich countries will tend to go down and increase in developing countries. Thus China, with low wages, puts pressure on wages in the United States, as production is shifted to China from the United States. This movement of production from developed to developing countries is initiated by multinational corporations and supported by some governments. For Example, Britain and other European Countries shifted some of their production facilities from their homelands to their colonies or ex-colonies and United States Administration under President Ronald Regan gave tax incentives to US corporations that set up manufacturing facilities abroad in Asia. Unfortunately, it shifts jobs and income generation from developed countries to developing countries. This shifting has been going on for the last 200 years, perhaps most markedly in the last 30 years or so due to Globalization. Lower income people, professionals and artisans in the developed world are particularly vulnerable to such shifts as their jobs tend to be the ones that are shifted. No one hazards a guess as to how many years the "the price equalization theory" will take to become effective. It is also not clear as to what the unemployment and poverty levels will be in the developed countries before manufacturing and producing in the developed countries can be reversed, if at all.

Immigration

People of all nations seek to migrate to countries where jobs are easier to get and are more paying. Sometimes, migration takes place because of non availability of jobs in the country of origin. Such immigration is sought by corporations who pressurize governments of developed countries to allow immigration because the immigrant labour is happy to work for less payment than local labour or professionals and increase corporate profits. Thus Indians, Pakistanis, Bangladeshis etc. migrate to the United States and United Kingdom; Turks, Algerians, Moroccans etc. migrate to Europe and East Europeans like the Poles, Slovaks, Hungarians etc migrate to Western Europe, United Kingdom or United States. Immigration is always at the cost of the indigenous poor or middle class as there is a reduction in the availability of jobs and salaries. Unemployment and poverty increases with immigration. But most governments in the developed countries are soft on immigration. This is primarily to help the corporations make more profit because immigrants are always willing to work for less.

Conclusion

The Rational Pessimist is worried about the decline of the developed countries simply because Americans, together with the Europeans are the worlds champion consumers and wasters. Can the consumption by the progressively unemployed and impoverished people of the United States and Western Europe sustain the economic growth of the rest of the world? The optimist may consider it possible but the Rational Pessimist does not. Optimists interpret Adam Smith's "the Wealth of Nations" to support neo-liberal capitalism and "Rational Optimism". But Adam Smith also wanted regulation of interest rates and laws to protect workers from their employers. Neo-liberal capitalism attributed to Adam Smith and his followers and Globalisation is not going to save the developed nations from declining from kingdoms of prosperity and joy to kingdoms of abject poverty and despair. Only a return to "Mercantilism" of 18th and 19th Century Europe or "The American Way" of 1820s in United States can reverse the trend.

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### Chapter 9: Limits OF Freedom

The concept of human rights or fundamental freedoms like freedom of speech, freedom of belief, freedom from want and freedom from fear is of recent origin. These rights were not available in feudal societies controlled or influenced by kings and powerful religious institutions like the Church. Equal rights of sexes were unimaginable even in the United States till the 20th Century. But things have changed. Human Rights in today's world are governed by the "International Bill of Human Rights". It is an informal name given to one General Assembly resolution and two international treaties established by the United Nations. It consists of the "Universal Declaration of Human Rights" (adopted in 1948), the "International Covenant on Civil and Political Rights" (adopted in 1966) with its two Optional Protocols and the "International Covenant on Economic, Social and Cultural Rights" (adopted in 1966). The two covenants entered into force in 1976, after a sufficient number of countries had ratified them.

The "Universal Declaration of Human Rights" is a declaration adopted by the United Nations General Assembly on 10 December 1948 at Paris. It consists of 30 articles. Each paragraph of the preamble sets out a reason for the adoption of the Declaration. The first paragraph asserts that the recognition of human dignity of all people is the foundation of justice and peace in the world. The second paragraph observes that disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind and that the four freedoms: freedom of speech, freedom of belief, freedom from want, and freedom from fear, are desired by all the people. The third paragraph states that human rights should be protected by rule of law. The other paragraphs are of general nature and not relevant to this book. "Universal Declaration of Human Rights" has not been accepted by some Muslim Nations as some provisions are contrary to the "Shariah" Law.

The "International Covenant on Civil and Political Rights" is a multilateral treaty adopted by the United Nations General Assembly on December 16, 1966, and in force from March 23, 1976. It commits its parties to respect the civil and political rights of individuals, including the right to life, right to freedom of religion, freedom of speech, freedom of assembly, electoral rights and rights to due process of law and a fair trial. The treaty has not been ratified by China, Saudi Arabia, Myanmar etc.

The "International Covenant on Economic, Social and Cultural Rights" is a multilateral treaty, adopted by the United Nations General Assembly on December 16, 1966, and in force from January 3, 1976. It commits its parties to grant of economic, social and cultural rights to individuals, including right to work, right to health, right to education and right to an adequate standard of living. Six countries led by the United States, South Africa, Saudi Arabia have not yet ratified the Covenant.

It will be appreciated that rights must be tempered by responsibilities. When one person's rights impinges the rights of another, or hurts religious or social sentiments of others, there is a case for restricting the freedoms enshrined in the International Bill of Human Rights. Let us examines some instances of abuse of fundamental rights.

Cartoons on Prophet Mohammad

The cartoons depicting Prophet Muhammad were published in a Danish newspaper on 30 September 2005. The newspaper had announced that this publication was an attempt to contribute to the debate regarding criticism of Islam. Danish Muslim organizations objected to the depictions by holding public protests. They also filed a complaint with the Danish police claiming that the newspaper had committed an offence under Section 140 (Blasphemy law which prohibits publicly ridiculing or insulting the dogmas of worship of any lawfully existing religious community in Denmark) and Section 266b (which criminalizes insult, threat or degradation of persons, in public and with malice, and attacking their race, color of skin, national or ethnical roots, faith or sexual orientation) of the Danish Criminal Code. The Public Prosecutor, however, discontinued the investigation as he found no basis for concluding that the cartoons constituted a criminal offence.

In 2005, the Prophet Muhammad cartoons had received only minor media attention outside of Denmark. Six of the cartoons were first reprinted by an Egyptian newspaper on 17 October 2005, along with an article strongly denouncing them. The publication did not provoke any immediate condemnations or other reactions from religious or government authorities of Egypt. Between October 2005 and the end of January 2006, the cartoons were reprinted in newspapers in more than 50 other countries, primarily in Europe. This led to protests across the Muslim world. There were instances of firing on crowds of protestors in Libya and Nigeria resulting in at least 130 deaths. The Danish embassy in Pakistan was bombed. Danish Embassies in Syria, Lebanon and Iran were set on fire. European buildings in Gaza city were attacked. A 60 year old Malaysian newspaper was shut down for printing the cartoons. In India, a Muslim minister in the Uttar Pradesh state government announced a cash reward of roughly about US $ 11 million for anyone who beheaded "the Danish cartoonist" who caricatured Prophet Muhammad. A consumer boycott was organized in Saudi Arabia, Kuwait, and other Middle East countries. The boycott reportedly cost Danish business about $ 170 million in exports. The Danish Prime Minister described the controversy as Denmark's worst international crisis since the World War II.

Various Christian groups, primarily in the Western World, responded to the protests by endorsing the Danish policies. Supporters of the cartoonists said that the cartoons illustrated the important issue of Islamic terrorism and that their publication was a legitimate exercise of the right of free speech in the Danish constitution, and explicitly tied to the issue of self-censorship. Rightwing Americans started buying Danish goods. In the first quarter of 2006, Denmark's exports to the US soared 17 percent. The defense of free speech and domestic political calculations remain paramount for the government and for many Danes.

Newspapers in Canada, United States and United Kingdom did not publish the cartoons. Critics of the cartoons described them as Islam phobic and racist and blasphemous to people of the Muslim faith. They claimed that the cartoons were intended to humiliate a Danish minority.

There have been many attempts to assassinate the cartoonists. In 2008, Danish police arrested three men suspected of planning to assassinate the cartoonist who drew the "Bomb in the Turban" cartoon. The next day, many other Danish newspapers reprinted the cartoon, as a statement of commitment to freedom of speech. On 1 January 2010, Danish police shot and wounded a man at the home of the cartoonist. On September 10, 2010, a letter bomb that was meant to be sent to the newspaper publishing the cartoons exploded in a hotel in Copenhagen. In September 2010 an Iraqi Kurd was arrested in Norway on suspicion of planning unspecified terrorist attacks on the newspaper. In December 2010, five men were arrested in connection with a suspected plot to stage a gun attack of the offices of the newspaper.

Not to be outdone by the Danish cartoonists, the Swedish artist Lars Vilks drew a cartoon of Prophet Muhammad as a dog. His life has been under threat since a newspaper published the cartoon in 2007. Muslims worldwide found this profoundly offensive. Since then, Vilks has been assaulted at a lecture. Two men tried to torch his home. An American woman stands accused of plotting to kill him, and Al Qaida put a price of $ 150,000 on his head. In December, 2007, a suicide bomber attacked Sweden's capital, Stockholm. The bomber, an Iraqi-born Swede, only succeeded in killing himself. But it was a close thing. Dozens could have died. Many Swedes wrote to Vilks and said his actions had jeopardized people's lives.

These two small and usually peaceful countries, Denmark and Sweden, are under attack mainly because some Scandinavian newspapers have published cartoons about the Prophet Muhammad. Does freedom of expression mean that individuals have the right to hurt religious sentiments of people?

Burning of the Koran

The Rev. Terry Jones, the pastor of a Christian congregation at Dove World Outreach Center, Florida, United States, had threatened to burn the Quran in September 2010. Like many other Americans, he was angry over plans to develop an Islamic center near the site of the September 2001 terrorist attacks in Manhattan, New York. He was eventually dissuaded through the pleas of religious leaders and government officials, including a phone call from Defense Secretary Robert M. Gates. But a few months later, he changed his mind and burned the Quran. The burning of the Quran was streamed live on the Internet. To reach out to Muslims overseas, Jones included Arabic subtitles.

The burning of the Quran was greeted with protests in Muslim countries and India. Death threats poured in. It was reported that a $2.4 million bounty had been placed on the pastor's head in Pakistan. A mob incited by the burning of the Koran attacked a U.N. Compound in Mazar-e Sharif, Afghanistan, killing seven U.N. employees. Related protests in Kandahar left nine dead and more than 90 injured.

The church's membership had plummeted. It was selling furniture to survive. Burning the Quran was possibly an attempt to revive its fortune. The church received nearly $20,000 in donations since the burning, along with letters of encouragement from radical Christians around the world. There is no shortage of intolerant people in the world. It seems clear that hatred, intolerance, and war between Christianity and Islam are destined to continue till the end of world.

Does freedom of expression entitle an individual to put other's lives at risk through reckless action?

Same Sex Marriage

Same sex marriage is another aberration of freedom. Homosexuality, like other forms of sexual deviation and perversion are as old as the history of civilization. Various types of same sex relationships have existed for centuries. In China, during the Ming and Zhou Dynasties, females and males could bind themselves in contracts to members of the same sex. The occasions were celebrated with elaborate ceremonies. However, there was no religious ceremony binding the couple in matrimony. The first historical mention of the performance of same sex marriages in Europe occurred during the early Roman Empire. Emperor Nero is reported to have been ceremoniously married to one of his male slaves. But the so-called marriages between two Roman males or with a slave had no legal standing in Roman law. In 342 AD Christian emperors Constantius II and Constans issued a law, the "Theodosian Code," prohibiting same sex marriage in Rome and sanctioned execution for those so married. Opposition to same sex marriage in Abrahamic religions (Judaism, Christianity and Islam) is based upon Old Testament passages that discuss the fate of Sodom (Genesis 19:4 – 19:11), Gods command that one shall "not lie with mankind, as with womankind" (Leviticus 18: 22), and direction that those that do "shall surely be put to death". Same sex marriages are not sanctioned in the Catholic Church or major branches of the Protestant Church. It is also not sanctioned in Orthodox Judaism or in Islam. Homosexuality is punishable by death in Afghanistan, Iran, Saudi Arabia, Yemen, Sudan, with life imprisonment in Pakistan and severely punishable in many Muslim countries.

In 2001, the Netherlands became the first nation in the world to legalize same sex marriage. Pope John Paul II, the previous head of the Roman Catholic Church, criticized same sex marriage when it was introduced in the Netherlands. His successor, Pope Benedict XVI has maintained opposition to gay marriage, and categorized it amongst "the most insidious and dangerous threats to the common good today". Some Christian groups have been vocal and politically active in opposing legalizing same sex marriage in the United States. In 2009, a group of Christian leaders from various denominations issued the "Manhattan Declaration", a statement that united evangelicals and Catholic leaders in fighting abortion and gay marriage. As of November 2010, the Declaration had been signed by over 475,000 individuals. The Islamic view of marriage is that it is a contract (Nikah) between two parties where the man offers protection and maintenance to the woman in return for exclusive sexual and reproductive rights. Same sex marriages thus cannot be considered legal within the constraints of a Muslim marriage.

Since 2001, ten countries, Netherlands, Argentina, Belgium, Canada, Iceland, Norway, Portugal, Spain, South Africa and Sweden have legalized gay marriage. Same sex marriages are also performed and recognized in Mexico City and parts of the United States. About 250 million people (or 4% of the world population) live in areas that recognize same sex marriage.

The word "Marriage" comes from the Latin word "matrimonium", and is an institution involving a mother or "mater" (Latin for mother). The idea implicit in the word is that a man takes a woman in marriage so that he may have children by her. Calling a gay union a marriage is an insult to the ancient institution of marriage. The basic intention of our forefathers in creating the institution of marriage was to ensure moral discipline in society and to ensure proper care and development of children in a stable family and social environment.

Legalization of same sex marriage normalizes homosexual behavior and encourages it. Sexual perversions should remain under cover of darkness or behind closed door. There is no need to specifically proscribe homosexuality and make it a criminal offence. At the same time, it is dangerous for a healthy family and society to encourage deviant sexual behavior by recognizing gay marriage.

Sexual Freedom and Children out of Wedlock

A major tragedy of sexual freedom in the Westernized societies is the growing number of children that are born outside marriage. All the world's major religions look with disfavor on sexual relations outside of marriage. Many non western countries, particularly the Muslims, sanction criminal penalties for sexual intercourse outside marriage. Sexual relations by a married person with someone other than his/her spouse are known as adultery and are also disapproved by the major world religions. Adultery is considered to be a crime in many countries and grounds for divorce. Children born outside of marriage were known as illegitimate and suffered legal disadvantages and social stigma. In recent years the legal relevance of illegitimacy has declined and social acceptance of children born outside marriage has increased, especially in Western countries.

The Western world, particularly Europe and the United States is obsessed with sex. Sex is in the air through implicit and explicit picturization of sensuality and the sexual act on television and films. Pornography is freely available on the internet and in book stores. Sexiness oozes out of almost every advertisement in the print or electronic media and in hoardings on the streets. Magazines are encouraging young women to have sex before marriage and to cheat on their spouses after marriage. There is peer pressure for free mixing and uninhibited sex in schools and colleges. Even mothers are encouraging their teenage daughters to date and even have sex without marriage. The result is the ever increasing number of unwed mother, mostly in their teens with some in early twenties. Most of them are victims of inexperience, immaturity and unsafe sex. Sixty minutes of the pleasure of love making and sixty years of suffering the consequences and repenting. Let us look at some figures of the magnitude of the problem.

In the United States, the National Center for Health Statistics reported that in 1992, about 30 percent of births were to unmarried women. In 2006, that number had risen to 38.5 percent. In 2006, 12.9 million families in the U.S. were headed by a single parent. 80 percent of such families were headed by women. Since 1994, the percentage of US households headed by a single parent has remained steady at around nine percent, although it has nearly doubled in numbers since 1970. In 2003, 14 percent of all Australian households were single parent families. Since 2001, 31 per cent of babies born in Australia have been born to unmarried mothers. In the United Kingdom, there were 1.9 million single parents in 2009 with 3 million children. About 1 out of 4 families in the United Kingdom with dependent children are single parent families. Only about 10 percent of them have a male single parent.

United Kingdom poverty figures show that 52 percent of single parent families are below the Government defined poverty line (after deducting housing costs). The major issue facing single parents and their children in the United States today is poverty. Female headed single parent families comprise 50 percent of all families in poverty (U.S. Bureau of the Census, 1979).

It is also well established that children raised by both parents grow up with more financial, emotional and educational advantages. On the other hand, children with single parents are at risk of not having adequate emotional and financial support that is necessary to nurture them into healthy, educated and successful members of the society. When you realize that one third of all children born in the developed Christian world are born to single parents and that most of them are condemned to a childhood of poverty, neglect and inadequate opportunities for education and growth, we have an enormous problem indeed. We may not like to acknowledge the existence of the problem but that will not make it go away. With one third of the developed world's children with single parents and another one third traumatized by broken homes, there will be more abnormal children than normal in the developed world. And these children will grow up into poor, disadvantaged and perhaps violent adults who will be a threat to social order. It is quite a price to pay for sexual freedom in the Western world and societies in developing countries that are aping them.

Governments can grant legal rights to children born outside wedlock. But they cannot provide them the social, emotional and financial support that a traditional family can provide. Such support is necessary to make them healthy and productive citizens of the future.

Commercial Freedom

Neo-liberal economic strategy followed by the Western world is allowing complete commercial freedom to big business to exploit human weaknesses and to profiteer at all cost. The cost to society, to the country and to future generations is ignored. Let us look at a few examples.

Advertising

Advertising is an extension of freedom of expression. It is justified by saying that advertising enables the consumer to know what choice of products are available and enables him to choose from what is available. Only adults have the legal right to choose and take financial decisions. So why is advertising children's products permitted on children's channels on television? Such advertising creates peer pressure amongst children to buy branded costly shoes and clothes, things like chocolate and candy which may not be good for their health or items which the child's parents may not be in a position to afford. This often results in conflict between children and their parents. This peer pressure often results in children stealing money to buy things they want but parents are not ready to buy them. This leads some of them to submit to sex for money, stealing items they want to possess and even murdering to get what they want. Children's products can be advertised in channels showing family programs.

Advertisements of deodorants and scents are most odious. The advertisements usually depict a young man spraying himself with the deodorant and finding himself being mobbed by scantily clothed women panting with desire. Minors and adolescent males buy these costly products, spray themselves and venture out hoping that the girls will come rushing. But nothing happens. Frustrated by the lack of response, they try force their attention on women and often end up committing sexual crimes.

Another two products much advertised are fairness creams for men and women and slimming aids (pills and gadgets). If fairness creams could make dark skinned people white skinned, there would no dark skinned people in the world. Mercifully these creams damage the pockets but not the health of the user. But slimming pills are not harmless and often cause permanent damage to organs like the kidney. Gadgets except genuine exercisers rarely work.

Taking money under false pretenses is a crime but making false claims in advertisements seem to be passé. Government regulators who are responsible for consumer protection are happy to take their cut and look the other way.

Gun Control

Gun control or regulations restricting acquisition of fire arms, particularly automatic weapons has been sacrificed at the alter of commercial freedom in the United States and many parts of Europe. Thousands of innocent people die every year in shooting incidents in schools, colleges, restaurants and other public places. In Norway, 84 young people were hunted and killed by one man armed with automatic weapons. Who cares? What is important is that arms manufacturers and dealers should be able to laugh their way to the bank.

Violence in Videogames and Movies

There has been a sharp rise in violent crimes committed by juveniles around the world. That is particularly so in the developed world and the more prosperous of the developing world. Part of the problem is the inability of working parents and single parents to devote necessary time and attention to rearing their children. Domestic violence and broken homes also psychologically scar the children. Children are left alone to their devices and the most common devices available to them are videogames, movies and internet. Constant exposure to violence and sex make them oriented and addicted towards these activities. Thus scores amongst peers are frequently settled by violent means, often with fire arms available in the house. Kidnapping of classmates for ransom, and murder for money or in a fit of rage or jealousy is becoming common. Troublesome or nagging parents are some times killed by their own children.

However, violence and sex sells the most. So in our era of commercial freedom, violent videogames will continue to be sold and screening of violent and sexually explicit movies will continue uninhibited. GDP growth rate and profits of games manufacturers like Sony and film makers are more important than the future of our children and of mankind.

Internet Pornography

Internet has boosted the freedom of expression as never before. Internet is a useful tool for acquiring knowledge and for communication. It also provides children with easy access of pornography. It also enables children and adults to upload nude pictures of themselves or their friends with lewd proposals or simply to hurt ex-partners or those not submitting to sexual advances. The governments will and ability to control misuse of the internet appears to be totally inadequate.

Women's Liberation

Women's liberation is considered to be one of the greatest achievements of the 20th Century. Women joined the workforce in strength in the United States in the 1920's and the trend continued in the developed and even in some of the developing world. With husband and wife working, there is more money to spend. Working women also need to spend more money on cosmetics, dresses and grooming. The economic freedom of the working woman is good for the economy. Then came the easy availability of contraceptives and provided the women with sexual freedom. Women have equal status with men in all spheres of life. But there is one small problem. Women, particularly non Muslim women, also have the freedom not to bear and rear children. That is wonderful for the women but what about the world? When women opt not to have children, population growth is checked. So the Non Muslim population growth in Europe, Americas and Australia is negative while the Muslim population growth remains strongly positive. So in fifty to hundred years time, Muslim population will be the majority in most of Europe and being democracies, Muslims will rule Europe.

When women have the freedom not to rear their children because they are too busy working, earning and enjoying themselves, the children are neglected. They grow up like unloved orphans. There is no one at home to hug them when they return from school, to give them a hot meal, to share their joys and sorrows, to help them with their homework and their emotional and teenage problems. The well to do mothers shower gifts on their children instead of love and attention. Many not so well to do mothers cannot even do that.

Only women can bear and rear children and make a house a home.

Conclusion

Are individual rights more important than common good of mankind? Can we have rights without responsibility? Should our freedom of speech permit us to abuse others, to slight others and to hurt religious sentiments? Should our right to assembly enable us to stop essential services and bring life to a standstill? What price are we ready to pay to ensure corporate profits?

Our forefathers, illiterate, ill fed, ill clad had one rule, the wellbeing of the tribe came first and the well being of the individual came last. Slowly, the tribe was replaced by nations. Patriotism was greatly valued. Family honor was greatly valued. Society was strictly controlled. All religions abhorred greed, lust, adultery, profiteering, and deceit. All religions rewarded compassion, honesty, humility. All religions placed restrictions on human freedom. But we, the Western world, have developed. We are secular. We have abandoned the ancient religions. Wealth is our god. Commerce is our religion. Selfishness is our virtue. I, me and myself is our philosophy. We live to enjoy ourselves. We are free to do what we please.

The Rational Pessimist is worried that we have more freedom than what we know how to handle.

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Epilogue

Nature is on the warpath. 2011 has started with devastating floods in Australia and Brazil. At least seventy towns and over 200,000 people were affected in the states of Queensland and Victoria in January. About 35 people died. Damage initially was estimated at around 10 billion Australian dollars. The coal industry of Queensland was affected with 15 to 20 percent output being lost. The floods devastated farms with over 51,000 hectares of pastures and 41,000 hectares of field crops. Over 6,000 sheep were killed. Across the Pacific a series of floods and mudslides took place around the same time in several towns of the mountainous region in the state of Rio de Janeiro in Brazil. The heaviest rains in 44 years sent earth and rocks rolling down hillside communities. The floods and mudslides caused at least 900 deaths. Around 6000 people lost their homes. Local media called it the worst natural disaster in Brazilian history. The cost of rebuilding was estimated at $ 1.2 billion.

At the beginning of February 2011, a severe winter storm left a 3,000 km long trail of snow and ice from the Midwest to the Northeast United States. Snowfalls of 30 to 45 cm piled up in parts of Illinois, Missouri, Wisconsin, Indiana, Iowa, Kansas, Chicago, New York and Oklahoma states. Two thirds of United States faced downed power lines and blocked highways. Chicago's public schools were closed for the first time in 12 years. Several trains were canceled or delayed in some parts of the Northeast. Across the United States, over 13000 flights were canceled during the week. Several deaths were reported. The storm was labeled as a "winter storm of historic proportions" by the National Weather Service.

On March 11, 2011, a devastating earthquake of magnitude M9 struck Japan. The epicenter was about 70 km off the eastern coast of Japan about 200 km from Tokyo. It was the most powerful earthquake to hit Japan since modern record keeping began in 1900. The earthquake triggered extremely destructive tsunami waves of up to 20 m that struck Japan. The tsunami topped the sea walls at Kesenuma city and the fishing port of Minamisanriku. In some cases the tsunami waves traveled up to 10 km inland. The earthquake and tsunami killed over 25000 people. Over 125,000 houses have been destroyed. Around 4.4 million households in northeastern Japan were left without electricity and 1.5 million without water for some time. Sendai city, a city of over one million, its airport and an air force base, were also submerged by the tsunami. In addition to loss of life and destruction of infrastructure, the tsunami caused the second most serious nuclear accident in the world at the Fukushima Nuclear Power plant. A 20 km evacuation zone had to be declared around the stricken power plant. The overall cost of relief and reconstruction could exceed $300 billion, making it the most expensive natural disaster on record in Japan. The disaster has reduced Japan's power generation by 10 per cent, pushed Japanese economy into recession and put a question mark on the safety standards at nuclear power plants around the world.

An extremely large and violent tornado outbreak occurred in the United States from April 25 to 28, 2011. Over 492 tornadoes were reported over those four days. Of these 292 hit 16 states on April 27. It produced large scale destruction in the states of Alabama, Arkansas, Georgia, Mississippi, North Carolina, Tennessee and Virginia. At least 344 people were killed as a result of the outbreak. April 27 was the deadliest tornado day in the United States since the 1925. It was also the costliest tornado outbreak in United States history with insured damage estimated as high as $6 billion, and total damages exceeding $10 billion. The tornadoes produced large amounts of rainfall in the Mississippi valley. The unprecedented extensive rainfall from these storms, combined with springtime snow melt from the Upper Midwest, created the perfect situation for a major flood along the Mississippi. The river and many of its tributaries swelled to record levels by the beginning of May. Areas along the Mississippi including Illinois, Missouri, Kentucky, Tennessee, Arkansas, Mississippi and Louisiana were flooded. U.S. President Barack Obama declared the western counties of Kentucky, Tennessee, and Mississippi federal disaster areas. For the first time in 37 years, the Morganza Spillway was opened, deliberately flooding 12,000 sq km of rural Louisiana to save most of Baton Rogue and New Orleans. Fourteen people were killed in Arkansas. Thousands of homes were evacuated. Up to 13 percent of the countries petroleum refinery output was disrupted by flood waters. The river transportation along the Mississippi was severely disrupted for weeks causing huge losses. By 15th of May, the situation had stabilized. The floods in the Mississippi were the worst since 1927. The floods had hardly subsided when the city of Joplin was struck by a category 5 hurricane. The hurricane completely devastated the city of about 60,000 destroying a third of all the houses and cars. President Obama visited the site and called it a national disaster.

While floods ravaged Eastern Australia and the Mississippi River basin in the United States, an unprecedented drought, perhaps the worst in 50 to 60 years struck China's Yangtze River valley, which supports 400 million people and 40 percent of China's economic activity. Hubei, Shanghai, Jiangsu, Shandong and Hunan provinces were severely affected. 1300 lakes could no longer be used for irrigation and drinking water supply. According to officials the shortages affected 4.4 million people and 3.2 million farm animals. The low levels of the Yangtze and its tributaries had stranded thousands of boats and left a 220 km stretch of the river off limits for container ships. The lack of water depth in the river had endangered a number of wildlife species like the Yangtze dolphin and finless porpoises. The drought severely effected China's wheat production. The primary cause of this drought is a lack of rainfall. But it seems certain that the Three Gorges dam has had a negative impact on the water supply downstream. To minimise the impact, the Three Gorges Dam authority has been instructed to partially open the sluice gates. It had already discharged 1.8 billion cubic metres of water in May, taking the level of the reservoir below 153m from a peak of 175m. The dam released 5 billion cubic metres of water till 10th June as engineers sacrificed hydroelectric generation for irrigation, drinking water supplies and ecosystem support. Volcanoes in Iceland spewed ash clouds miles into the atmosphere in Scotland and Northern Germany in May and disrupted air traffic.

June brought devastating floods in southern China killing over 50 and rendering more than half a million homeless. The Yangtze River in China which had almost dried up in May was in heavy flood following heavy rain with its water levels at highest level since 1955. Over 170 people were killed and over two million people have displaced due to the floods. Standing crops have been destroyed in the flooded areas. At the same time the worst wild fire in history of Arizona persisted for over twenty days and destroyed over 400000 acres of forests. Wild fires in California, United States have destroyed over two million acres of forest and threatened a nuclear research facility holding thousands of tons of nuclear waste. Over 200 wild fires were reported in Siberia. An earthquake struck Christchurch town of New Zealand killing a few and damaging houses. A volcano in Peru has released large quantities of ash which has covered large parts of Peru and Argentina and disrupted flights in Peru, Argentina and even Western Australia. A river in North Dakota, United States, was in its worst flood in 130 years.

July saw nature in a mellow mood. A severe heat wave with temperatures crossing 50˚C, the worst in 70 years, struck the East Coast of United States resulting in the death of at least 22 people. But since then only an unusual blizzard struck the Northeast regions of United States in October leaving about 3 million people without electricity for about a week.

Politically, 2011 has started on a turbulent note. The so called "Arab Spring" has brought waves of changes in many North African and Middle East countries. A peoples' revolution in Tunisia led to the ousting of their long time president in January. The protests inspired similar action throughout the Arab world. The Egyptian revolution led to the removal and prosecution of its long time president Hosni Mubarak. Yemen is in the midst of a civil war with opposition demanding the ouster of its long term president who has returned after recuperating in a military hospital in Saudi Arabia from wounds received in a missile attack on his palace. The uprising in Bahrin by the Shiia minority has been brutally put down by the Sunni regime with military assistance from Saudi Arabia. A full scale civil war started in Libya with NATO and the United States siding with the rebels and successfully overthrowing the regime of Col Gaddafi. Protests on the streets of Syria by Sunni Muslims have been greeted with bullets and tank-fire. Casualties are mounting and thousands of refugees are fleeing to Turkey. In Iraq, the Shiia cleric Moqtadar al Sadr and his Mahdi Army has served an ultimatum to the American forces to leave the country by December.

In May, American forces located and killed Osama Bin Laden inside Pakistan leading to worsening of relations between United States and Pakistan. The Al Qaeda have promised revenge and carried out some strikes within Pakistan including a major attack on a Pakistani naval base at Karachi. In December NATO airplanes attacked two Pakistani posts on the Afghan border allegedly after being fired at from inside Pakistan. 24 Pakistani soldiers were killed and many were wounded. An enraged Pakistani government has stopped logistic support to NATO troops in Pakistan, got the U.S. to vacate the Samshi air base in Baluchistan and promised to review its relationship with the U.S. What effect it will have on the War on Terror in Afghanistan is yet to be seen.

In Washington, the Israeli prime minister declared in an address to a joint session of the Congress that Israel will not allow division of Jerusalem in any peace deal with Palestine. He also reiterated that Israel will retain most of its settlements in the West Bank, retain strategic gains from the 1967 Arab Israel war, not allow the future Palestine state to have an army of its own and will not negotiate with Hamas. The conditions have been rejected by the Palestinians and their Arab supporters who are likely to press for recognition of Palestine as an independent state by the United Nations in September. In the mean time Egypt has reopened the Rafa crossing into Gaza allowing free access to Palestinians living in Gaza with the outside world for the first times in four years in spite of objections from Israel. Thus the Israel Palestine conflict is likely to become volatile and violent once again. Israel has already shot and killed over 25 unarmed Palestinians on Golan Heights during a protest. Palestinians fire rockets into Israel. Israel retaliates with air strikes.

The conflict in Afghanistan continues unabated. Pakistan continues to be on the brink of economic collapse and implosion. Two terrorist attacks in Norway on the same day in July damaged the office of the Prime Minister and killed at least 87 people. It appears to be the work of a Christian rightwing extremist who was angered by the secular Norwegian government's soft attitude towards Muslims and bombing of Serbia in aid of Muslims of Bosnia and Kosovo. With elections to the presidents of United States and Russia due in 2012, many changes in the political scenario could be in the offing.

Violent riots swept London and other English cities like Birmingham, Manchester, and Liverpool following the killing of a man by London Police in an attempted arrest on August 8. The event was followed by four days of rioting by the poorer sections of the society in which cars and buildings were torched and shops were vandalized and looted. 16,000 policemen were deployed on the streets of London. Thousands had been arrested. The damage is expected to cost around ₤ 300 million. Critics of United Kingdom like Zimbabwe, Libya and Iran are rubbing their hands in glee. The awakenings of "Arab Spring" seem to have reached the streets of London.

It is acknowledged by the discerning that most governments round the world are of the rich, run by the rich and for the benefit of the rich. Government policies, coaxed by corporate lobbies and bribes are designed to increase the profits of multinational corporations and big business while the ordinary people, unemployed, under employed and under nourished eke out a miserable existence and the environment is ravaged. It is only natural that around the world, the rich are getting richer and the poor are getting poorer.

The economies of the developed world, arguably, are in terminal decline. Greece has been spared the agony of default with a $ 230 billion bailout, the second in a few years. Will the bailout turnaround the Greek economy or will it require a third bailout in a few years? In the United States, the tussle between the President and the Republicans over budget deficit and increasing the debt limit threatened an American sovereign default which has been avoided. Economic melt down in Europe and the United States can only spell trouble to the smaller developing economies that rely on their exports to the developed world for their export dependant growth. In September "Occupiers of Wall Street" came on the streets of New York in protest against corporate greed, rising inequality and the politician – big business nexus. The protest soon spread to other cities of United States and the world. The only sector of the economy that appears to be doing well is stock market. That is a sure sign that too much money is being invested in the market and an asset bubble is being formed. The bubble has to burst sooner or later and will plunge the world into another financial crisis.

The Rational Pessimist acknowledges that there are critical and apparently insoluble problems facing the world. He acknowledges the supremacy of God and nature. He acknowledges the weaknesses and follies of men. But he does not worry about them. Whatever will be, will be. But one thing is certain. The world, in spite of suggestions to the contrary by some Christian organizations and other Apocalyptic Pessimists, is not coming to an end. Those who have the will to survive and know how to survive in difficult times will survive.

The Rational Pessimist believes that individuals, families, and societies have to learn to solve their own problems. Others including governments, NGOs, charities etc. have their own agenda. They do not solve problems unless they are approached. We can seek help of others but we have to do our best. Even a loving mother, some times, does not feed her child till he cries in hunger.

The Rational Pessimist has a strategy to survive in difficult times. He remembers the story of the "The Cricket and the Ant". The cricket sang through the summer and had nothing to eat in the winter and the ant, which toiled through the summer and saved enough for the winter, had enough to eat. The Rational Pessimist buys what he needs and what he can afford and not what his neighbors buy. He saves money for emergencies and old age. He stocks up staple food when it is cheap. He avoids unnecessary risks. He does not venture alone into unfamiliar forests or go for swims in unknown waters. He does not invest in stock markets but in gold, silver, housing, life insurance and job oriented education to enhance employability of himself and his children.

The Rational Pessimist is not influenced by advertisement. He does not think that using a deodorant or a scent will bring sexually aroused members of the opposite sex rushing to him in droves. He does not believe that modesty is a waste of time. He believes that modesty is the essence of well bred women.

The Rational Pessimist believes in the existence of God. He believes in the institution of marriage, in the institution of family and in his duties towards his parents and children and to the family of man.

The Rational Pessimist discourages his children from wasting time by playing games on computers or mobile phones and encourages them to study and become knowledgeable and employable. He encourages them to be physically healthy and mentally strong. He teaches them the value of money and the effort that goes into earning money.

If you are one of the rich and the powerful, one of the "1 Percent" of the world, you have every reason to be optimistic. You rule the world through your politician friends and their neo-liberal economic policies. If you are one of the "99 Percent" of the world, you have every justification to be concerned. You have a long struggle ahead before you can get economic and social justice.

The Rational Pessimist supports movements like "Occupiers of Wall Street", "The Arab Spring", "India Against Corruption" and "Green Peace".

**The Rational Pessimist hopes for the best but prepares for the worst**.

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Bibliography

The book has been researched mostly off the internet by typing in the topic into the Google or Yahoo search engines. Immediately hundreds of thousands of sites pop up. The real problem is to decide which sites to refer to. The default choice of the author is en.wikipedia.org/wiki/.... The same has been used for every topic. There after, hyperlinks are followed to reach other related sites. Where other sites have been referred to, the same has been mentioned. Time Magazine has been another important input, particularly for latest information on the United States and Europe.

Prologue

Chapter 1: Reasons for Rational Pessimism

Afghanistan: en.wikipedia.org Palestine: en.wikipedia.org, mideastweb.org/brief history Iraq: en.wikipedia.org Poverty: en.wikepedia.org, oneworld.net

Happiness: "Thirty Nine Steps to Happiness" by Col B. Sarkar ISBN 81-248-0142-8

Chapter 2: Types of Pessimists

Chapter 3:- Prodigal Politicians

Chapter 4:- The Realm of Virtual Wealth

Chapter 5: American Interventionism

Chapter 6:- Man Versus Nature

Levees of New Orleans: Spectrum.ieee.org/energy/environment/flood-or-hurricane protection-the-new-orleans-levee Earthquake in Japan; cbsnews.com, May 24, 2011, Japans Nuclear Plant Closing While Sea Wall is Built by Tomoko A. Hosaka, Associated Press, Tokyo, May 09, 2011 Wild Fires: Environment.nationalgeographics.com

Chapter 7: Weaknesses of Human Nature

Spain's Real Estate Bubble: asiaone.com, ft.com, property.timesline.com, gaurdian.co.uk/money, moneyweek.com

Chapter 8: Decline of the Developed World

Unemployment in the US: How to Create a Job by Barbara Kiviat, Time Magazine April 5, 2010, New Challenge from China by Fareed Zakaria, Time Magazine October 18, 2010 Hunger in America: "U.S.- Massive Food Waste & Hunger Side by Side" by Haider Rizvi; U.S. Dept. of Agriculture, March 2002, "Household Food Security in the United States, 2000"; worldhunger.org Poverty in United States: Sounddivision.com/info/poor/statistics.asp; Aspe.hhs.govt/poverty/11shtml; Povertyprogram.com/uspoverty.html European Debt: Briefings, Time Magazine May 24, 2010, the Lost Continent by Michael Schuman, Time Magazine July 12, 2010 Unemployment in Europe: The Lost Continent by Michael Schuman, Time Magazine July 12, 2010; Saving Saab by Joseph R Szczesny, Time Magazine August 30, 2010; Driving Profits by Thomas K Grose, Time Magazine June 28, 2010, Arrivederci, Italia by Stephan Faris, Time Magazine October 25, 2010.Poverty in Europe: poverty.org.uk/summary Tax Evasion and the Developed World: The Secret is Out by Vivienne Walt, Time Magazine October 4, 2010 Banking in the Developed World: The Curious Capitalist by Zachary Karabell, Times Magazine May 24, 2010, The Curious Capitalist: Rana Foroohar, Times Magazine April 4, 2011, propublica.com, en.wikipedia.org/wiki/bailout, FDIC website Public Debt: The Debt Dilemma by Yuval Levil; Times Magazine April 4, 2011, You are What You Owe by Sebastian Mallaby, Time Magazine May 9, 2011 Conclusion: What would Adam Smith Say? By Justin Fox, Times Magazine April 5, 2010, Times Magazine May 17, 2010

Chapter 9: Limits of Freedom

Burning of the Quran: www.christianpost.com

Epilogue

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###

### About the Author

Bhaskar Sarkar was born at Calcutta, India in 1940. He graduated in civil engineering in 1963 and joined the Corps of Engineers of the Indian Army and hung his boots after 28 years of distinguished service in the rank of Colonel. A keen student of military history, economics and international affairs, he has eleven published and a few unpublished books to his credit. This is his Second E book. The first E Book is titled "Occupiers of Wall Street; Losers or Game Changers ISBN 9781476282435 Other Books by the Author are:

Pakistan Seeks Revenge and God Saves. India ISBN 81-85462-11-9. Fiction.

Tackling Insurgency and Terrorism. ISBN 81-7094-291-8. Non fiction.

Kargil War, Past Present and Future. ISBN, 1-897829-61-2. Non Fiction.

Outstanding Victories of the Indian Army. ISBN 1-897829-73-6 . Non Fiction.

Thirty Nine Steps to Happiness. Non Fiction. 81-248-0142-8

President Takes Over. Fiction. (Unpublished)

Practical Approach to Vaastu Shastra. (A Peacock Book)

Earthquakes, All we need to know about them. ISBN 978-81-248-0188-8. Non Fiction.

**Decline and Fall of the American Empire. Non Fiction. (Unpublished)**

**Nationalism: Economic Strategy for Survival of Developing Countries. ISBN 978-81-269-1093-9.**

**An Introduction to Religions of the World. ISBN 978-81-269-1339-8. Non Fiction.**

**Can the American Economy be Saved? Non Fiction. (Unpublished)**

**Who is Afraid of the Chinese Dragon? I am. Non Fiction. (A Peacock Book)**

**Tackling the Maoist Menace. ISBN 978-81-269-1636-8. Non Fiction.**

**Prevention, First Aid and Treatment of Diseases with Homeopathy. (On offer)**

**The Laments of a Rational Pessimist. (On offer)**

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