Monday, March 14, 2016

My Review of Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy by Michael Hudson

Below is my review of Michael Hudson's Killing the Host as submitted to the editor for the February, 2016 issue of the Sturbridge Times Magazine.  I don't completely agree with the author, but his analysis is better than much I've read.

If you grew up in this country before the 1970s, you experienced a world that is nothing like today. Back in that other reality, there were factories in abundance employing full complements of workers, sometimes in multiple shifts.

American Optical, with beginnings in 1833, was a powerhouse, with its great factory complex in Southbridge. Once dominant in its field, it is now defunct, brought out by others.

Driving along the Quaboag River on Route 67 in Warren, you can see the Wright's Mill Complex. It seemed like everyone knew someone who worked there. Since 2008, no more.

There are still factories, but they are all too often, sans workers. How could our region, let alone country go from having workshops everywhere, all highly productive, to the point where they have almost died out?

One man has an answer, debt.

Michael Hudson is a research professor of economics at the University of Missouri Kansas City. Your reviewer discovered him accidentally. As a history nerd, I came across his writing and was surprised to find out that his research found the builders of the pyramids were not slaves but well paid, skilled workers. It's too bad Charlton Heston and Yul Brynner are no longer with us, as some corrections need to be made to their movie, the Ten Commandments.

Mr. Hudson avers that the debts owed to the FIRE (Finance, Insurance, Real Estate) sector were causing labor and industry to suffer. American labor, squeezed by debt becomes over priced as do American products. Debt is taking a greater and greater share of revenues from non-financial businesses, and workers have to pay more in interest such that they are on the way to debt peonage.

According to Professor Hudson, we are headed to the day when the parasite of a financialized economy will kill the host, or the debts will have to be reduced or even forgiven. Your average free-marketer might be scandalized by the idea, but it is no more unfair than the bailing out of the banks in 2008.

The concept is one that raised its head with the phenomenon of the Occupy Wall Street movement. Mr. Hudson, among others, noted that student loans exceed credit card debt. Paying that debt takes a toll on graduates whose salary prospects may be less than what they can afford to service the loan.

As Michael Hudson states many times in his book, “Debts that can't be paid, won't be.” The FIRE Sector would want it to be for the debtors to sell off assets. As there are less and less assets with enough equity, that is not going to be too popular and one day it will be impossible. A reduction of debt or even forgiveness would be inevitable as an alternative to national ruin.

Many consider Hudson a bit of a commie as he participates in Marxist conferences and has good words to say about Karl. To be fair, he has some nice things to say about Adam Smith and Classical Economics.

He has, however a special dislike for free market economists. He sees them as champions of the FIRE sector. Free market advocates would disagree with that characterization. They would be adamantly against the existence of a central bank and would claim the crony capitalist shenanigans were only possible because there is a Federal Reserve. That discussion is for another day. If there must be a central bank, the author's points are well taken.

In his last chapter, he offers Reforms to Restore Industrial Prosperity. Will they bring economic nirvana? Some make common sense, such as writing down debts that can't be paid and letting people stay in their homes rather than protect the second homes of Goldman and Morgan execs.

His suggestion to tax economic rent to save it from being capitalized in interest payments has merit in that we should have a tax structure that promotes production over financialization. Is his emphasis on land taxes as the way to do it the right idea?

Revoking the tax deductibility of interest has some good arguments, but will not go over too well with every home buyer.
The public banking option, similar to the Japanese Post Office banks is not a bad idea, but my local savings bank provides most of those services. The Japanese system had low interest on savings, but they had been tax free. Bring that on any old time.

Funding government deficits by central bank, and not by taxes, is, for a true believer in that system, reasonable. Of course, if you are going to create money to cover the shortfall, hey, why not fund the whole budget in the same manner. No IRS or Form 1040 would make a lot of people happy this time of year.

Paying Social Security and Medicare out of the general budget has some appeal as there are demographic problems and the last deal raided SS for $150 million for the Disability Trust Fund.

Keeping natural monopolies out of the public domain is okay. Privatizers have taken over some water departments and gouged the public. No, one, however, is remotely thinking of trying to take the MBTA away from the government.

As most capital gains are in real estate, taxing them at progressive rates should dampen speculation.
Hudson's desire to deter irresponsible lending by making the creditor bear the cost of any loan that could be considered a fraudulent conveyance is worthwhile. Many loans have been made that there was no way that they could be paid without looting assets. That should be stopped.

One question about his reforms is why he did not propose a restoration of the Glass-Steagall Act separating retail deposit banking from investment banking. It would seem if you are not going to hang investment bankers from the lamp posts, you would want to restore that law.

One might grant a federal reserve run by Mr. Hudson or someone like him would establish policies that would better serve the economy as a whole. It is hard to believe it could be anything more than an interregnum as capture by interests is what happens to bureaucracies.


Still, it should be given a try. It would be hard to do worse. If it fails, we can bring in Ron Paul to shut down the Fed.

Saturday, March 12, 2016

How Sweet It Is - Maple Syrup in the Sturbridge and Quaboag area.




Below is my column as submitted to the editor for the March 1, 2016 issue of the Sturbridge Times Magazine.

by Richard Morchoe

The little boy put a few pancakes on his plate. That task done, he grabbed a jug and, proceeded to drown the flapjacks. After a short while, the syrup being absorbed, he added more. At this point, his father, no longer able to contain himself said to the lad, “Do you think you might have a little pancake with the maple syrup?”

I remember well my dad's gentle teasing as he observed the gargantuan appetite.

Maple syrup is a pleasure of life. Unfortunately, another region has done what it could to capture the brand. The Green Mountain State wants the world to believe the brown juice should not be mentioned without the word Vermont prefixed.

Don't be fooled. The syrup most associated with our northern neighbor is fraudulent. Vermont Maid Syrup is glutted with high fructose corn syrup and contains only maple flavor of natural and artificial provenance.

Fortunately, you don't have to leave town and go north for the real thing. You can head out to the back yard and produce it yourself. We are coming into the season.

Granted, it's not without some hard work. That said, the basic method is fairly simple. You may have seen those homey pictures of men emptying buckets in winter. Well most of it is like that, heavy routine labor.

The first thing you must do is make sure you have the trees. We caution you right away that, sans les arbres, the degree of difficulty reaches a level that can only be described as insurmountable. Once you are certain that you own or have permission to tap and you are sure they are sugar maples, proceed.

Next, you need taps, at least one for each tree. They are available at farm stores and some hardware shops. Make sure your drill is working and you have a 7/16” bit. A clean plastic gallon milk jug with a hole made off to the side at the top can be used to catch sap.

For storing fresh sap, clean is the word. Depending on volume, it could be galvanized or plastic cans or pails. A deep metal pan that can hold five gallons should do for an evaporator.

Your going to be boiling on a wood fire outside so set that up and gather dry fast burning wood. You want to do it out of doors or there will be problems, but not for the gas or electric company as they will clean up, and so will you, differently.

Locate a candy thermometer to test when the syrup is done. You will need clean glass or metal jars for storing. Did we mention clean?

Ready, drill the hole and bang in the spout, but not so hard you split the tree. Hang your jug or container on the hook of the spout. Be sure to cover to keep out rain, snow and foreign material.

That fireplace you set up should be ready. When the jugs have enough sap, fill the pan, and start the fire. Don't fill your pan to the top as it will boil over. As the water boils away keep adding more sap to the pan. Do not have less than an inch in the pan or it may burn down. Keep pouring the rest of the sap in to the boiling liquid. It will take a lot of boiling to get it to syrup as about ten gallons of sap make one quart.

Sap is finished when it is seven degrees warmer than boiling temperature at your elevation. That's what the candy thermometer is for. Pour the hot syrup through a syrup filter or a double layer of outing flannel. Store in sterile canning jars in a cool place. A freezer is ideal.

So that is the basic process. Full disclosure, we did it once. It is work and maybe you were born to do it. Most of us, however, would be satisfied with just the finished product. You probably have a neighbor or at least someone in the vicinity who boils. If you don't know anyone, read the list of local producers below.

In Sturbridge, KE Farms is on Leadmine Road. They have a website at http://www.maplesugarhouse.com/index.html with everything you want to know about their operation.

Maple Ledge Farm is in Holland on Vinton Road. Best to connect with them through Facebook at https://www.facebook.com/maple.ledge/.

On Little Alum Road in Brimfield is the stand of Freeman Farm. To contact Jane or John call (413) 436-7621.

On the south side of West Brookfield, Amy and Jeff and their son Nick, boil sap this time of year. If you are interested the email is jeffrobbins@charter.net or (508) 867-5428.

Same town on Long Hill Road is the Meade's Bucket List Farm. Call (508) 637-1297 or email at thomas.meade53@yahoo.com.

Head a little south on that street and you come to a farm operated by Abraham and his family and they have a website at http://browniefarms.com/maple-syrup/.

Up in North Brookfield, the Warren Farm and Sugarhouse has been around forever. They are on the web at http://www.thewarrenfarm.com.

The Harms Family Farm operates in Brookfield and way out in Colrain. Their web address is http://www.harmsfarm.com/.

East Brookfield has Triple Oaks Farm Sugarhouse owned by Lori And William Gregoire. They can be reached at (508) 294-5990.

If you still are bound and determined with that unquenchable do it yourself spirit, a better set of instructions is provided at the Massachusetts Maple Producers website www.massmaple.org/make.php. They can also help if you decide to turn pro.

We'll be thinking of you as we pour warm syrup on hot pancakes.



Monday, March 7, 2016

Review of The Quaboag And Nipmuck Indians: The Quaboag Indians, A Loup People and the Nipmucks of the Upper Quinebaug River Valley

Below is my review of The Quaboag And Nipmuck Indians: The Quaboag Indians, A Loup People and the Nipmucks of the Upper Quinebaug River Valley as submitted to the editor of The Sturbridge Times Magazine for the October 2015 issue.  

The Quaboag And Nipmuck Indians: The Quaboag Indians, A Loup People and the Nipmucks of the Upper Quinebaug River Valley By Donald Duffy

Book review by Richard Morchoe

It has been said that the closest a human population has ever experienced to an invasion from outer space was the American Indian encounter with Europeans. To say that the native population was blindsided is understatement. Out of the blue, beings with different appearance, outlook, history and customs appear, and the invaded must make sense of it, quickly.

No more was that the case than out here in Western Central Massachusetts. The indigenous people had to deal with a geopolitical situation for which they were not and could not be ready.

The meeting of English and Indian in our region has been the subject of a few books. The latest is The Quaboag and Nipmuck Indians. The subtitle, The Quaboag Indians, A Loup People and the Nipmucks of the Upper Quinebaug River Valley is descriptive of where the people lived and that's where we live. The Quaboag tribe made home along that river and the Quinebaug, where it flows through Sturbridge, was the abode of a segment of the Nipmucks.

The author, Donald Duffy of Palmer, has not written a book that will replace any that went before, but is an addition to the genre and stands on its own. The author refers to previous work in the text and the bibliography.

What is an enjoyable aspect is the exploration of geography. The author goes over the conjecture of where places really were. This is useful as we are dealing with a population that had no written language. Never was the term, lost in translation more apt. There are often many spellings for a place. The Brits did as well as they could phonetically, except when they didn't.

Language misunderstandings were a problem, mostly for the indigenes. The settlers had a talent, if not genius for putting more into a deed then the sellers thought was included.

One bit of difficulty for the reviewer is the Massachusetts Indian campaign against the Mohawk. In 1669, an alliance of tribes from the Pioneer Valley eastward mounted an expedition to deal with depredations of the New York tribe. The Mohawk were formidable and feared so the adventure involved serious risk. According to Duffy and some others, it was an unmitigated disaster.

Ill planned and ill executed from start to finish, the Indians from the East came home weakened and some bands were effectively ruined. The defeat was so all encompassing that the Quaboag were happy to have the English settle as protection against the bad boys to the west.

Leo Bonfanti, author of several pamphlet size booklets of English-Native history from settlement to conclusion of the Indian war in Maine, viewed the Mohawk-Massachusetts encounter in a different light. In Volume II of his BIOGRAPHIES AND LEGENDS of the NEW ENGLAND INDIANS, he essentially agrees with Duffy and other writers up until the end of the battle.

According to Bonfanti, under their leader, Chikataubut who fell in the encounter, the Massachusett counterattack defeated the Mohawk. The reverse was enough to cause them to request mediation from the Dutch and English.

This is an important, as Duffy notes the Quaboag welcomed protective English settlement. If they had lost heavily against the Mohawk, siding with KingPhilip could only have been suicidal as they would now have two mortal enemies.

Success against the Mohawk might have allowed them some confidence in their own ability against the colonists.

Then again, maybe none of that mattered. Michael J. Tougias, in his novel of the era, Until I Have No Country, writes of an older Indian speaking to a younger warrior, telling him that the tribes would lose the war. The youthful man asks him why fight then. His reply was that they had, more or less, to do something

That has its own logic, somewhat. Duffy details the fate of the Nipucks of the Quinnebaug who tried to stay out of the war. They avoided the fate of the Quaboag which was immediate death, slavery or exile. In the end it did not matter. They were effaced from the land as were their neighbors to the north, albeit in slow motion with all legal niceties observed, sometimes.

It is fascinating to think that events that shaped where we live played out almost outside our doors. The battles that happened here were local events, but also involved the three major imperial powers of the day, England, France and The Dutch Republic.

It is conceivable that the Quaboag who ambushed the colonials in Wheeler's Surprise could have wiped them out, had it not been for the “Praying Indians” aiding the English. Had they destroyed the remnant on Foster's Hill as well, it would have been an immense victory, but in the end, would have probably changed little.

The Quaboag and Nipmuck Indians is far more than battles in scope, and even if you've read other books, this will be worth your while. The author has a previous work, Around Pottequadic, that looks at the native people and settlers more to the Ware and Palmer area. I look forward to reading it.