Category: "Finanacial"

China immense impact on the global community

by Ginosar  

China is becoming the most powerful player in global events. Its economy is projected to overtake the US in less than a decade!
The US and China are the key players in a tightly woven global community and must cooperate and find common paths to help ourselves and the global community.
China is also the largest generator of greenhouse gases and also suffers considerably from global warming. Reducing GW and increasing economic growth are interwoven elements.

This is just a brief exposure of some key differences between the US and China.

China with its rapidly growing GDP of $6 Trillion is often more influential internationally than the US with its 15 Trillion GDP, a quarter of global GDP. We have by far the strongest military power in the world, but economic power is as important, or often more important, than military power. Exerting military power is not a good option in most cases.

The key reasons that China is so powerful are that it has:
1. A strong central authoritarian government that can make decisions relatively quickly
2. A government which actually care to improve the lot of its population,
3. The ability for planning and executing long term national goals
4. Immense foreign exchange reserves of over $3 Trillion; all of which allow China to achieve its goals rapidly.


The Chinese government and their private economic enterprises operate with less moral and ethical constraints than any other influential nation. This allows China to acquire vast long-term - international energy and mineral resources and exerts its economic influence with little regard to its impact on the local population or international concerns think Iran and Sudan. China's economic power is growing rapidly at 10% per year with less moral concerns or self imposed or external limits. China GDP was one trillion dollar in 2000; it is now 6 times larger! These numbers do not show the total story, since its labor costs are so much lower, China can build twice as much infrastructure and housing per dollar as the US.


Although some assessments predict that China's GDP will surpass the US in just five years, it does not seem realistic- there are always unforeseen difficulties. Serious bumps are around the corner, such as a potential housing bubble, (25 million, often expensive, housing units are unoccupied now). Also there are increasing wage demands, and their artificially low currency exchange rate which would not be tolerated for long. China is already planning to change the rate slowly.


There are a lot of negative elements in China: lack of individual freedom, severe corruption, weak rule of law, building empty cities to sustain employment, lack of environmental control, expanding arid areas due to global warming, diminishing water supplies to vast population centers, no social safety net, suppression of native minorities and more. This is all part of the picture of this vast land. However, it is important to note that most Chinese are happy to have these vast economic opportunities, fast rise in their standard of living at the cost of their political freedom.


The US has serious economic problems most of them politically generated:

1. Representative government, in which local interest prevails over national needs.
2. We have huge and growing national and private debts, totaling $50 trillion, 3 and a half times GDP.
3. We do not have a national vision nor national long term or even short term plan.
4. We let short term self-serving financial forces dictate our direction.
5. Both Democratic and Republican administrations and Congress concentrate on benefiting the financial elite, the wealthy upper few percent of the population to the detriment of the lower income half of the population.


The US richest 10 percent control some 2/3 (73%) of our net worth. The lower 90% has only 27%; this is a ratio of 24 to one on a per capita basis. Think about it, for every thousand dollar a person in the lower 90% can spend monthly, a person in the upper 10% can spend twenty four thousand dollars!

Our US government is divisive, polarized, non transparent, and unable to work for the benefit of the country. And because we generally believe that every one should be free to pursue his/her goals, essentially free from central supervision, our widely spread greed burdens the nation by economic collapse, huge national debt ($14 billions, almost equal to GDP) and immense private debts, some $35 trillions. Recently some 20% of our GDP has been generated by the non-productive financial sector, which mostly shuffled immense amount of fabricated capital from hand to hand with no productive benefit for the country but their own short-term financial wealth.


In summary, China concentrates on achieving its long term rapid national growth at the cost of individual freedom and lack of the rule of law. We concentrate on protecting the wealthy, retaining individual freedom, sustaining the rule of law at a sacrifice of our other important national needs.


The impact on morality of overpopulation:

Democracy cannot survive overpopulation. Human dignity cannot survive it. Convenience and decency cannot survive it. As you put more and more people into the world, the value of life not only declines, it disappears. It doesn't matter if someone dies. The more people there are, the less one individual matters.
Isaac Asimov


China is not constrained, nor guided by morality or ethics due largely to its vast population. The more people we have, the less we value each individual. And this is evident especially in China and India. Their population is about 1350 and 1210 millions, respectively; together over a third of the global population.

It is not surprising, therefore, that most Chinese focus on their own economic progress and ignores the suffering of others. It has been so for a long time. The current news from China is that 18 people saw and ignored the suffering of a 2 years old, severely injured girl in a car incident. They looked, did not lift a finger to help, and if you heard the driver explanation why he did not stop you would be revolted of his inhuman attitude. I am glad that a considerable debate started in China about this sad experience.


I am bringing the MORALITY ISSUE up to illustrate the great significance of China to the struggle to reduce economic suffering and global Warming. China is the key to cutting global Greenhouse gases. No effort by any other country, or a combination of countries, will make much impact compare to the impact that China has now and will increasingly have (plus the negative impacts expected from India economic and population growth.)


China is driven; it can not stand still economically. To retain political stability the central and regional governments must supply jobs and housing to the current 600 million urban population and the 200 million more poor rural people that will be moving to urban areas over the next decade.
China is obviously focusing on its own survival and growth and naturally ignores the needs of other nations. China "conforms" to Western moral standards only when it suits it or required to propagate China's own aims. China is especially reluctant to support UN effort that reduce the ability of dictatorial powers such as Syria and Iran to subdue their population by force since they have been doing it in some cases and will do it again. They are extremely concerned about the desire of some of their minorities for self determination. Up to now local rebelions are unrelated and focus on correcting local wrongs. But China leadership fears a possible coordination of these local upsets and widespread instability if they are not stopped early. This is why they clamp down on small events that to us seem so minor nad unjustified. Even if we do not like it, We must look at it from their point of view in order to coordinate better the global fight against GW. Yes, this ultimate danger to humanity is more important than achieving soon our dream of full human rights.

China's Communist leadership is working hard to improve the lives of the majority of their population, concentrating on its Han majority of 91.5%. China controls the major banks and holds the majority of foreign capital and gives just a minimal political freedom to prevent upsetting the apple cart. I admire what China leadership did after the death of Mao and his immediate successors. It understood realistically the needs of the country; the first one was reducing its rapid population growth. Under Mao China's population grew from 530 millions in 1948 to 800 millions in 1970 at a rate of 2.2%.

China long term goal has been to first achieve a zero population growth and eventually to reduce their population over the next century to some 750 millions. Wise and courageous aims. The one child policy came from that and succeeded very well to limit the growth rate to just 0.5% and cut the expected population by some 400 millions people. But despite this marvelous effort it could not cut the actual population growth - the current population is nearly three times the population of 1948!


In addition, the ability of the central government to influence local affairs, which is the key to actual developments and the rule of some level of law, is limited. Regional leaders are very powerful and influence local development by often making their own rules and even breaking national guidelines.

China not only has cheap labor in combination with low cost capital, it also does not insist on profit. Full employment is the key goal. Therefore, their competitive position borders on illegal product dumping.


In contrast, we must follow long established safety laws, environmental protection laws, pay social security taxes, income tax, sales tax, and many other requirements (which I agree with) undercutting most western industries ability to compete with an industry that ignores almost anything but current minimal salaries to a vast labor pool. Most of their product undercut substantially similar US products.


But much of China low cost products also come with big negatives: internally high pollution, and low quality and even dangerous products. It is not only that the color of a toy will fade faster but that dangerous lead paint will be used in children toys. Or dangerous chemicals will be used to modify milk products killing hundreds. Or the death of hundreds (thousands?) of children when their schools buildings collapsed on them in an earthquake because the concrete was well below specified strength- to increase builder's profits.


I will discuss this important aspect of Chinese products at another time.





Our standard of living will go down

by Ginosar  

For decades I told my friends and family that we are spending beyond our means and we will pay for it, both nationally and individually. All my life I was "rich" because my desire for material things were lower than my income, so I did not face drastic economic situations even when I resigned to work for social causes some 30 years ago.

I also knew well the meaning of playing with the stock market; I did everything in the market for a decade, from puts and calls to leverage bonds ten to one, trying to do it the American way-- to get income without working for it. I dropped off the Market almost 40 years ago to live with less economic ups and downs, but with more peace. I recommend that to all of you - the stock market is a game that only some professionals* can win. The ups and downs are not worth it, not economically and not emotionally.

Assuming that you have been following the dire economic situation the US and most of the rest of the developed world is now facing, borrowing to the hilt to shore the troubled economies, I strongly suggest that you rethink how to spend your money wisely. That is not a short term blip! We are now paying for our bubbles and will continue to do so for many years to come. Something in the order of 10 to 15 TRILLION DOLLARS disappeared in this recent economic game. You simply can not spend what you do not have for too long, even a big country like the USA. Our national obligations are way beyond our ability to pay them if we do not change course drastically after a hopeful economic recovery.

Here is what Stanford professor of International Peace, Jeffry Friedman, stated: "We are going to have to produce more than we consume, save more than we invest, and the government will have to take in more than it spends. That translates into austerity; a lower standard of living...Every country that has gone through the crisis successfully has done so by imposing fairly stringent austerity measures. That means real wages are stagnant or declining, you have to increase export, decrease imports, increase savings, and reduce consumption. That is the macroeconomic of dealing with a debt crisis."

[Harvard magazine July- Aug 2010]

Add to this that the foundation of advanced economies is cheap energy sources, from coal to oil and natural gas; these sources will increase in price with time due to higher international demand, by China and India especially, and some replacement by low greenhouse energy sources. Electricity will cost more and so transportation fuels. All of these forces will increase the cost of most of our material things, from houses to foods.

That will impact each and every one of us to a different degree.

Choose your own path to a sensible life.

*" Wall Street is populated by a bunch of people whose primary goal is to make money, and the rules are pretty much caveat emptor. You'd be a fool or a deluded idealist to think ethics would be prominent on Wall Street. That is not a statement against people in the money business, just a fact."

Steven Levitt, Univ. of Chicago economist and best selling author:  Freakonomics and SuperFreakonomics. [Money - July 2010]

It is the Economy - Stupid.

by Ginosar  

The deep financial problems of  Greece have resulted in riots and even killings in Athens. This is the result of living with lies for a long time. The Greek for too long lived as if there is no tomorrow. Their productivity is very low. They want a very easy life, with very early retirement, and enjoy life. The problem is the Germans do not want to pay for it. And I can't blame them.

The Greek government falsify its financial data to mask its dire financial situation from the European Union. The EU and especially the German public is angry at being forced to pay to rescue Greece from major financial collapse.

The evidence in Greece were not hidden. I knew that few years ago when my daughter lived in Greece for several years and the Greeks were starting their preparations for their Olympics. There is no place here to write all the economic incompetence of Greece, but it was clearly evident then that they could not afford the ten billion dollars to prepare for the grandiose Olympics they wanted. With a very small national economy, with inability to work efficiently and productively, with incompetent management and lazy workers, you could see the writings on the walls. They were beyond their means. They could not afford this extravagance but their national pride forced them to show to the world how great Greece is. That spending beyond their means was one of the main nails in their financial coffin.

What does this have to do with global warming? A lot. First, all of us who want  greener energy and a greener economy must realize that it will cost a lot of money. Fossil fuel are cheap partially because they do not include the environmental damages they are causing all over the world-vast amounts of Carbon Dioxide -CO2 emissions that are the main cause of global warming.

We will have to make sacrifices to reduce expected damages from the global warming. We can do it. Instead of enriching hundreds of thousands of financial employees, real estate and financial analysts, we will have to redirect our country towards more energy efficient economy based on tighter rules.

We do not like rules and constrains in our country. We want to be free to do what each of us want. That is the same approach the Greeks have been taking, and we too for many decades.

The Greeks ignored reality and lived high, for a while. We have ignored realities, one of which is the "externalities," the damage caused from our wasteful use of energy. The price of energy is artificially low since we have not paid for the severe environmental damages caused from burning fossil fuels.

We have been playing similar financial games in the US and around the world for many years. We have also hidden key facts from governments, and from the public, but because our economy is so large we have been able to muddle through to date. We are not in the same sinking boat the Greeks are sailing now, but we have the same mentality when the financial institutions controlling our economy are playing unproductive financial games, grow from 6% of the US economy to 20%; produce a third of corporate income and make a very narrow section of the public very wealthy while causing millions of unemployed. And all of this false wealth have not created anything. It is based on shuffling of highly leveraged money all around, and at each stage some one is taking a percentage for profit.


Almost every one is angry, how could they lose their stock market gains, the inflated value of their home? Our wealth was false, it was not based on real economic gains. It was a Monopoly game.

We have forgotten that the elevation of millions of workers to the middle class created the purchasing power that elevated the US economy to such a high level.

The public does not know enough about the financial bailout, its magnitude, and potential impact on future generations. So much is hidden, so much is under the table. Congress with its revolving doors with the financial institutions, and with the cooperation of the Administration keep us in the dark.

I wonder if there is any possibility that we will grasp that the Greek financial tragedy is a wake up call for us to look at reality and strip our economy from some of the major lies, and falsehoods we have swept under the rug.


Misleading reporting on Green Energy

by Ginosar  

There is a report by the BBC today about China increased investment in clean energy. China is now number one in investment according to the report by the non profit Pew' Research. This is a poor way of reporting because it has little to do with what is critical -- reducing GHG.


When you talk about money invested without emphasizing result achieved you are misleading most people to think that that is the critical issue. It is not.

Just to focus for a second: cutting GHG is not a luxury, it is not "nice", it is not something to help create jobs- it is a matter of human survival and the coming of a lot of human agonies all over the world. Therefore we must focus on what is important - cut GHG fast and effectively. To do that you need to put your eggs in the right baskets, there are not so many eggs that you can drop some on your way to make a good omelet.

Look at the table below, it shows how much each country put into its green energy program, but NOTHING about what it achieved. How much energy did they produce? how many kWh? how much GHG they have cut or could cut once the systems are on line?

The title is:

China steams ahead on clean energy


China - $34.6bn

US - $18.6bn

UK - $11.2bn

Spain - $

Brazil - $7.4bn


And here is more from the article:

"Even in the midst of a global recession, the clean energy market has experienced impressive growth,"

"Countries are jockeying for leadership.

"They know that investing in clean energy can renew manufacturing bases, and create export opportunities, jobs and businesses."

The US still holds a marginal lead in the total amount of installed capacity, but will be overtaken by China during the course of this year if existing trends continue. "

They briefly mentioned installed capacity but not actual numbers, which still is misleading.

They are looking at it from a very narrow and less important point of view.

They have ignored, and it is ALMOST ALWAYS IGNORED,  the achievement in reducing GW.

Phyllis Cuttino, director of Pew's Campaign on Climate Change should known better [may be the BBC did not give the details of usefulness she puts in her report, but I doubt it].


Countries could have spent much of this money and put it into very unproductive technologies, or even into useless technologies  and achieved little, while some other country invested less but put it into much more productive technologies. We are not learning anything important from this reporting.

If they put it into energy efficiency such as CHP they could have reduce GHG by a factor of ten times then PV for example. Efficacy and CHP are two of the most neglected and cheapest way to cut GHG.

Germany, for example, spent $70 B on PV producing miniscule 0.3% of its electricity from it, while at the same time it is increasing its dependence on dirty coal, the source of more than 50% of its electricity. The US is trying to follow the stupidity of Germany because we have here a very vocal combination of dreamers and very effective propaganda by the PV marketing- not necessarily US producers of PV. We buy much of the production from other countries.

They may have created jobs with these large sums, but how many permanent ones? What have they achieved?


The key in working in the GW field should be the results, not the tools, not the money alone, not the technology, but the reduction in GHG!


Illuminating the Developing world.-Energy Eff. Conf. Cont.

by Ginosar  

Energy Efficiency Conference



Illuminating the Developing world.

Evan Mills, Ph.D.
Staff Scientist, Lawrence Berkeley National Laboratory
Research Affiliate, Energy & Resources Group, UC Berkeley


There is a substantial global lighting inadequacy. It can easily be seen in the famous satellite picture of the Earth night sky. US, Europe, East side of China, Australia East coast and the like have considerable lights. The poor areas of the world, about one and a half billion people, Africa, much of China, much of interior India, have no electricity. They have been using kerosene lights for a century. And many do not have even that.


The fuel cost of these primitive kerosene lights is around $40 B a year, emitting 190 Million Tones of CO2. Replacing these lights with self generating electricity is equivalent to eliminating CO2 from 30 million cars. And obviously would provide more reliable, steady and non polluting source. The inside air pollution from kerosene is considerable too.

"The most promising modern illumination is by LED because of their high light to energy efficiency, small size, ruggedness, and ability to run on low voltage. It is natural to produce local electricity, away from any power grid, by extremely small PV systems or through temporary connections to grid nodes such as cellphone charging shops. The miniature power supplies may be as low as 3% and thus are a key problem.

The idea is appealing but there are problems and barriers.  PV charging has high initial costs, although well-designed systems can pay for themselves in less than a year.  Poor-quality manufacturing can result in unnecessarily inferior products that spoil the market.  Current LED are up to 60 lpw (lumens per watt.) The best LEDs are approaching 100, but the worst ones tested are around 10 lumens per watt.

Major international initiatives from the World Bank and the U.S. Department of Energy are addressing these issues by instituting better consumer information and quality-assurance testing and rating systems.


Dr. Matania Ginosar wrote:

Evan, thank you very much.

I am puzzled by your statement that PV can be paid back in one year. Here roof locations are, according to our utility  $9500/kW installed, and up to 1400 kWh/yr output in good locations.


Dear Matania,

We are talking about developing country applications for extremely poor people who only have a lantern or two for lighting.  We are powering replacement lights with electricity and providing higher levels of energy services, but we aren't electrifying the whole home.  The system you described is of course running many lights plus major appliances.

The systems we are working with are less than one watt, because the LED itself is less than one watt. 
Households can easily spend $50-$100/year on kerosene lighting, depending on local fuel prices and how they use their lamps. 

LED systems are retailing for $20-$50 with small pv panels.

This is really the power of miniaturization (small light, small battery, small solar cell).  The systems are of course considerably less expensive without the solar cell (if they can be charged at cell-phone charging shops, at work, etc.)

Make sense?

Dr. Matania Ginosar wrote:

It make sense. I tried last night my 8 LEDs low-cost flashlight. At 4.5V and 0.2 Amps it is close to one watt. But the light in a dark room was very weak, may be equivalent to 10 W incandescent bulb.


We are so accustomed to high intensity light, we probably do not grasp how thankful those without electricity could be even with that small illumination.

Another possibility is that you have a much higher efficiency LEDs than those in my cheap flashlight.




We've seen LED efficacies ranging from 10 to 60 lpw (and that was several years ago).  Best ones are approaching 100 lpw now!  ~  Evan



Financial sector shenanigans- Derivatives and other games.

by Ginosar  

The financial world has immense and almost final say on any significant effort to curtail Global Warming.

Without the willingness of financial markets to provide funds at reasonable costs, little can be accomplished.

So lets look at some dark corners of the financial market - derivatives and the power to control our government and Congress. Why, because derivatives, to a significant extent, added to and complicated the global financial decline we are going through now.

During our current financial trouble it is very hard to raise significant funds to build the exceedingly capital-intensive alternative-energy fields. We are talking about tens of trillions. Several trillions a year, as a minimum, to make the major changes needed. And very large financial institutions are needed to raise this level of capital.

My purpose, partially, is to show you why both the US administration and Congress are very reluctant to do any thing meaningful to control, to set some meaningful limits, on LARGE financial institutions. Or, saying it another way, our financial world determines to what extent our political system will operate to mainly benefit themselves vs. benefiting them and our society.

We are at their mercy. And their arrogance is huge, as was shown clearly on several special PBS FRONTLINE programs.

And I guarantee to you that their self- interest is by far larger than any national interest.

Some history:

The financial sector was about 6% of the US GDP a quarter of a century ago. But as president Reagan and the Republican party destroyed much of the governmental supervision and control of  the financial markets, three major things occurred.

First, a major tax cut for the 5% upper income earners shifted some $750 billions for the US Treasury to the wealthy, increasing our national deficit.

Second, we got the collapse of the Saving & Loan that costs the Treasury some $350 to $500 billions. Remember that all of these sums are in the old, much more valuable dollar, more than  twice current value!

Third: the financial sector was freed to invent all kind of new tools to increase its business and profits and grew to 20% of U.S. GDP!

That means that one fifth of our economy is involved in shifting money around, from one institution to another. Some shifting around, loans, are obviously necessary for the functioning of the economy. But this huge sector, to a large extent, does not create real wealth, it does not build houses, does not build ships,  it collects money, fees, interests, chargers, some of it illegally off- shore, to make that sector operators' very rich. Operating off-shore as Goldman- Sacks, an American corporation, did with its financial packages, is to bypass legal "constrains" in the US.

While this shifting of "non-existing" funds is going on, the financial institution takes its cut, both for arranging the deal, and also interest on the outstanding loans. Try to understand, non-existing funds means that when normal banks operate within the law, for example making small business loans, they have the legal right to loan out up to 15 times their capital. In the last decade, the loans extended by many of the massive financial institutions like City Bank, Goldman Sacks, Bank America, where 50 times or more of their capital. Which is highly leveraged, and thus risky. A small misfortune would drain their total assets trying to cover losses.


To increase their income they resorted also to derivatives,  a highly complicated tool that is a very unique and specialized financial agreement, that people even in the financial sector, do not grasp much.

A derivative can be thought as: "derived from". Basically, it relates to some financial transaction.

"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency - the Commodity Futures Trading Commission (CFTC) - who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?" PBS.

Why? The "regulators" were part of the brotherhood of the financial industry. Many in Congress were their beneficiaries.

It is so complicated that a 7/6/09 Fortune article said:


And in the summary:


Now they could risk any amounts with limited if any risk - these "wise people" of the financial world believed.

According to a chart in that Fortune issue the total derivative outstanding in 2008 was some

600 Trillion dollars!

Again, six hundred trillions. The total global GDP then was about $45 trillions. That means that outstanding derivatives have been thirteen times the total global production of all goods and services.

Can you grasp this? I can not.

Remember, each derivative is suppose to provide profit to one of the parties. With so much theoretical (paper) funds in existence, even a very low fee can make hundreds of billons in profits. A fee of only 0.1% would provide a profit of $600 billions!

That is what you call real money.

Basically these are agreements between two or more financial institution that say, I am paying you this amount, that under certain future condition you will pay me so much money. If the condition did not occur, you have my fees as profit. If the condition does occur, you pay me the total sum we agreed on.

That is similar to insurance. Any one can insure any future event, from life insurance to safe-shipping insurance. You do not have to have any connection to the basic event. That means, you can take life insurance on a man on his deathbed without knowing him or have any relation to him. That is all legal. The only requirement, both side have to agree. Its their money.

But in our national disaster they did not risk their money. And they knew it - we had to jump in to rescue them. THEY WERE TOO BIG TO FAIL. That is the key problem. They gained privately, we pay for their risk if it is big enough.

Now grasp this one of many shenanigans by Goldman Sacks. In 2007 they realized that the bundling of many risky home loans were staring to sour, and are likely to be worthless. So they told some of their customers that these deals are likely to be highly profitable and sold it to them at a good profit. To increase their ill-gained profit, lying all the way to the bank, they went to AIG, the now famous American International Group, and "insured" that financial deal that they just sold. Goldman-Sacks (GS) was no longer having any risk with it, but they took insurance on it since they knew it will be worthless soon. Now, the bundle collapsed in value and GS demanded fro AIG the value they agreed to pay. AIG "knew" that all of these loans were good because they got very high rating from the rating agencies such as Standard & Poor.  S&P lied, did not tell the true value of the financial bundle because they had large business dealings with GS, beyond their so called "independent" market analysis.

Here is what I copied just now from S&P Home page:

"Today Standard & Poor's strives to provide investors who want to make better informed investment decisions with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions."

S&P is still claiming that after they were found to lie and over-rate much of the risky financial packages called subprime mortgage loans. They were one of the key reasons for the global financial melt down. The losses from that global meltdown is not clearly known but in the order of possibly hundreds of trillions dollars. That means that the global community must tightens its collective belts very tight to accommodate the money we never had. The money we thought we had and we spent as if we have it.

And here is another outrageous act by our government. The US is covering the above unjustified agreement between GS and AIG and paying GS the full amount owned by AIG if it was solvent. However, I believe the Fed should have repaid just the fee GS paid to AIG, not the total they agreed on. The Fed put out nearly $200 billions to rescue AIG!

I wonder why?

Now, think about it. Until recently, across the globe we lived as if we had so much net worth we could do everything we wanted (obviously not the underprivileged). We bought mega homes we could not afford, furnished them lavishly and went to vacations paying a few hundred dollars a night. But these high spending was not in real money, it was all pretend money. It was not based on real value, on lasting market value. It was a flash in the pan. Money loaned by the banks. The results, as we know it, are the wide spread agony of unemployment, low income, higher tuition fees, lower services for the needy, lower ability to spend, and uneasy futures.

The irony is that many people complain as if they had these homes they are now lost by bank repossessions. They lost the furniture and the easy life style. But it was not there, and it was not theirs, it was a false promise.

The people in fast moving housing industry, from labor, suppliers, to contractors are now unhappy. They should be, it was not their fault. Again it was based on a mirage.

To add to the problem, we can not contain and regulate the financial industry. They are bigger, smarter, more financially endowed than any Administration, Congress or government agency could be.

How come?

When a financial writer discussed the potential of financial regulations with a financial professional, he told him "we are not worried about government regulation. You see, he emphasized, we have the best brains here, we can out smart any regulation." And he is right, the best brains in the last decade went to the financial sector to develop more exotic instruments and find more effective ways to overcome government regulations. Some 50% of Harvard graduates IN ALL FIELDS - went to work in the financial sector before the recent collapse.

By the way, the outlandish high bonuses paid most in the failed financial institutions are back to their old levels. These high bonuses had major impact on the "profit at any cost" approach the industry, from bottom to the top took. How else can you explain that no one from that sector waved the flag and warned the government about the nearly illegal activities taken place. Money can overcome morality.

Now, may be you can realize why it is nearly impossible to regulate the financial sector, and why Congress does what is being told by financial lobbyists.

And that is one of the key reasons why this country has little if any ability to have a society that many of us want. A society based on the some reasonable elements of the common good, such as health care to all, care for the underprivileged, and better distribution of the national wealth.

With this kind of immense financial power - the overwhelming force in our economy- we should not expect that most of the US industry, commerce, and financial institutions would willingly participate in reducing global warming.  They see it from a very different perspective- what is in it for them. And both political parties are playing this game.