The Shadow Superpower: System D

by Robert Neuwirth, Foreign Policy

With only a mobile phone and a promise of money from his uncle, David Obi did something the Nigerian government has been trying to do for decades: He figured out how to bring electricity to the masses in Africa's most populous country.

It wasn't a matter of technology. David is not an inventor or an engineer, and his insights into his country's electrical problems had nothing to do with fancy photovoltaics or turbines to harness the harmattan or any other alternative sources of energy. Instead, 7,000 miles from home, using a language he could hardly speak, he did what traders have always done: made a deal. He contracted with a Chinese firm near Guangzhou to produce small diesel-powered generators under his uncle's brand name, Aakoo, and shipped them home to Nigeria, where power is often scarce. David's deal, struck four years ago, was not massive -- but it made a solid profit and put him on a strong footing for success as a transnational merchant. Like almost all the transactions between Nigerian traders and Chinese manufacturers, it was also sub rosa: under the radar, outside of the view or control of government, part of the unheralded alternative economic universe of System D.

You probably have never heard of System D. Neither had I until I started visiting street markets and unlicensed bazaars around the globe.

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of "l'economie de la débrouillardise." Or, sweetened for street use, "Systeme D." This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy. A number of well-known chefs have also appropriated the term to describe the skill and sheer joy necessary to improvise a gourmet meal using only the mismatched ingredients that happen to be at hand in a kitchen. (...)

It used to be that System D was small -- a handful of market women selling a handful of shriveled carrots to earn a handful of pennies. It was the economy of desperation. But as trade has expanded and globalized, System D has scaled up too. Today, System D is the economy of aspiration. It is where the jobs are. In 2009, the Organisation for Economic Co-operation and Development (OECD), a think tank sponsored by the governments of 30 of the most powerful capitalist countries and dedicated to promoting free-market institutions, concluded that half the workers of the world -- close to 1.8 billion people -- were working in System D: off the books, in jobs that were neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes.

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Photo: TED ALJIBE/AFP/Getty Images

Pluto and Persephone, Benini 1622-1625

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How the GOP Became the Party of the Rich

[ed.  History of modern American fiscal policy, from the inflation of the 1970s through to the Bush tax cuts and the Tea Party. Because it's in Rolling Stone it's actually fun to read, and full of stuff to make non-rich people angry. (Browser)]

by Tim Dickinson, Rolling Stone

The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."

Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"

The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"

The year was 1985. The president was Ronald Wilson Reagan.

Today's Republican Party may revere Reagan as the patron saint of low taxation. But the party of Reagan – which understood that higher taxes on the rich are sometimes required to cure ruinous deficits – is dead and gone. Instead, the modern GOP has undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.

Modern-day Republicans have become, quite simply, the Party of the One Percent – the Party of the Rich.

"The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility," says David Stockman, who served as budget director under Reagan. "They're on an anti-tax jihad – one that benefits the prosperous classes."

The staggering economic inequality that has led Americans across the country to take to the streets in protest is no accident. It has been fueled to a large extent by the GOP's all-out war on behalf of the rich. Since Republicans rededicated themselves to slashing taxes for the wealthy in 1997, the average annual income of the 400 richest Americans has more than tripled, to $345 million – while their share of the tax burden has plunged by 40 percent. Today, a billionaire in the top 400 pays less than 17 percent of his income in taxes – five percentage points less than a bus driver earning $26,000 a year. "Most Americans got none of the growth of the preceding dozen years," says Joseph Stiglitz, the Nobel Prize-winning economist. "All the gains went to the top percentage points."

The GOP campaign to aid the wealthy has left America unable to raise the money needed to pay its bills. "The Republican Party went on a tax-cutting rampage and a spending spree," says Rhode Island governor and former GOP senator Lincoln Chafee, pointing to two deficit-financed wars and an unpaid-for prescription-drug entitlement. "It tanked the economy." Tax receipts as a percent of the total economy have fallen to levels not seen since before the Korean War – nearly 20 percent below the historical average. "Taxes are ridiculously low!" says Bruce Bartlett, an architect of Reagan's 1981 tax cut. "And yet the mantra of the Republican Party is 'Tax cuts raise growth.' So – where's the fucking growth?"

Republicans talk about job creation, about preserving family farms and defending small businesses, and reforming Medicare and Social Security. But almost without exception, every proposal put forth by GOP lawmakers and presidential candidates is intended to preserve or expand tax privileges for the wealthiest Americans. And most of their plans, which are presented as common-sense measures that will aid all Americans, would actually result in higher taxes for middle-class taxpayers and the poor. With 14 million Americans out of work, and with one in seven families turning to food stamps simply to feed their children, Republicans have responded to the worst economic crisis since the Great Depression by slashing inheritance taxes, extending the Bush tax cuts for millionaires and billionaires, and endorsing a tax amnesty for big corporations that have hidden billions in profits in offshore tax havens. They also wrecked the nation's credit rating by rejecting a debt-ceiling deal that would have slashed future deficits by $4 trillion – simply because one-quarter of the money would have come from closing tax loopholes on the rich.

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Illustration: Matt Mahurin

Cat Dreams, by Bernard Kliban
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Good News for Menhaden

by Abby Goodnough, NY Times

A fishing oversight group voted Wednesday to sharply reduce the allowable East Coast catch of menhaden, an oily forage fish that does not show up on dinner plates but is vital, scientists say, to the ocean ecosystem.

The Atlantic States Marine Fisheries Commission, which includes representatives from 15 Eastern states and the federal government, voted to reduce the menhaden harvest by as much as 37 percent compared with 2010 levels after a review found the species had been overfished and needed to rebuild.

Millions of pounds of menhaden are caught along the Atlantic Seaboard each year, most by Omega Protein, a company that grinds it and reduces it to fish meal and oil that goes into fertilizer, feed for livestock and farmed fish, pet food and even dietary supplements. But menhaden — which is rich in Omega 3 fatty acids and is also known as bunker or pogy, depending where you live — is also an ecological building block, serving as a crucial food for larger fish like tuna, striped bass and bluefish, as well as birds and marine mammals.

“There’s really not much in the ocean that is as healthy to eat, pound for pound, as menhaden,” said Peter Baker, director of Northeast fisheries at the Pew Environment Group, which supported the catch reduction. “If these other species don’t have menhaden in their diet it becomes less nutritious and they’re more susceptible to disease.”

Mr. Baker said the menhaden fishery was the largest on the East Coast by weight and that the population had fallen to less than 10 percent of historic levels.

The bait industry also harvests the fish for use in lobster and crab traps, Mr. Baker said, though it is estimated to catch 20 percent of the harvest, compared with about 80 percent for Omega Protein.

“We’ve been pushing this fish into the red zone over and over again,” he said, “and we’re now at the critical point where it’s going to stop being able to reproduce itself and perhaps go into freefall and collapse if action isn’t taken immediately.”  (...)

Ben Landry, a spokesman for Omega Protein, said the company was disappointed and felt the commission was responding to pressure from environmentalists and recreational fishermen.

“One thing is certain,” Mr. Landry said. “The industry is going to have to face some significant harvest cuts that will lead to a lot of hard employment questions, and a lot of tough questions as to how they’re going conduct their operation.”

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Photo: Stephen M. Katz/The Virginian-Pilot, via Associated Press

Guests and Associates

[ed.  I've never been a fan of this manufactured 'tradition' and don't know how much longer it will survive as a paean to consumerism.  People on both sides of the equation seem to be getting more cynical about it.] 

by Stephanie Clifford, NY Times

For the first time in years, Michelle Nyberg probably will not be standing in line when stores open for their Black Friday sales.

She still loves a good deal — last year she spent a couple of thousand dollars on markdowns that day, the Friday after Thanksgiving — but Ms. Nyberg says that she does not want retailers to ruin the holiday for her or their own employees.

Ms. Nyberg is drawing the line now that major chains like Target, Macy’s, Best Buy and Kohl’s say they will open for the first time at midnight on Thanksgiving, and Wal-Mart will go even further, with a 10 p.m. Thanksgiving start for deals on some merchandise.

Retailers, eager to be the first to draw customers on one of the biggest shopping days of the year, are pulling the equivalent of the Republican primary shuffle by opening earlier and earlier than competitors.

Last year, a few stores, including Toys “R” Us, pushed into Thanksgiving.

But judging from the negative reaction among dedicated Friday after Thanksgiving shoppers on blogs, Twitter and Facebook, the wave of midnight openings this year has crossed a line.

Part of the objection is inconvenience. To be at or near the front of the line, shoppers say they will now have to leave home hours earlier — in the middle of the turkey dinner for some. But the wider objections reflect sentiments like those of the Occupy Wall Street movement, including a growing attention to the rights of workers and a wariness of decisions by big business. (...)

One retail executive sounded sad about the decision to open earlier. Brian Dunn, the chief executive of Best Buy, said that the midnight opening “became an operating imperative for us” after competitors moved their openings back. “I feel terrible,” he said.

A handful of retailers are holding out, like J. C. Penney, which will open at its usual 4 a.m. on Friday. “We wanted to give our associates Thanksgiving Day to spend with their families,” said Bill Gentner, senior vice president for marketing.

Still, some of the big retailers making the switch said that the response from workers and customers had been positive.

“There are many associates who would prefer to work this time as they appreciate the flexibility it affords their schedules for the holiday weekend,” Holly Thomas, a Macy’s spokeswoman, wrote in an e-mail. A Target spokesman, Antoine LaFromboise, said that employees will get holiday pay for Thanksgiving work, and “we’ve heard from our guests that they are excited.”

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Photo: Jesse Tinsley/The Spokesman-Review, via Associated Press

Friday Book Club - Cadillac Desert

[ed.  Can't recommend this book highly enough.  A jaw-dropping account of the water politics that shaped the American West, most notably the development of Los Angeles.  Intrigue, bribery, blackmail, it's all here - in super spades. 1986 National Book Critics Circle Award Winner.]

by Gladwin Hill, NY Times

It's unlikely that most taxpayers will read ''Cadillac Desert: The American West and Its Disappearing Water,'' but they should. It's a revealing, absorbing, often amusing and alarming report on where billions of their dollars have gone - and where a lot more are going.

The money has gone into Federal water projects in the Western states - some of the projects awesome, some scandalous but all with an uncertain future. More than a century ago John Wesley Powell, the nation's pioneer hydrographer and an explorer of the Grand Canyon, concluded that so much of the West was virtually desert that if all the flowing water in the region were applied to it, the water would spread too thin to make much difference.

But that didn't daunt several generations of pioneers, who believed the selective harnessing of available water could yield miracles. And it did. It virtually created modern California, making it the nation's most populous state and one of the world's prime agricultural areas. On a smaller scale, similar marvels were wrought in other states - Arizona, Utah, Colorado, the Dakotas, Montana and even Nevada.

It all came about less through engineering skill than through political prestidigitation. There's a thing known in Federal circles as the Iron Triangle. One side - depending on the week - is either the Interior Department's Bureau of Reclamation or the Army Corps of Engineers, rival bureaucracies dependent for their existence on the building of dams and related water facilities. The second side of the triangle consists of members of Congress, shamelessly wooing votes via pork-barrel projects. On the third side are beneficiaries of water projects - farmers, contractors, merchants, local politicians and a host of secondary opportunists. Link these together, and you have a greed machine, fueled by taxpayers, that for generations has been unbeatable. President Carter tried to challenge it with his ''hit list'' of questionable water projects and came out of Congress's threshing machine too battered to swing a second term.

The taxpayers' problem is that the chronicle of this hocus-pocus normally emerges in inconclusive bits and pieces, in reports based on sanctimonious handouts from the Bureau of Reclamation and the Corps of Engineers that are heavy on how they are saving the world, light on what it's costing - and often opaque about the justification for the projects.

Marc Reisner, a former staff writer for the respected newsletter of the Natural Resources Defense Council, has put the story together in trenchant form. He details the Machiavellian competition between the bureau and the engineers, recounts how huge sums have been spent to benefit small numbers of influential people and suggests painful days of reckoning lie ahead.

Parts of his account are oft-told stories, such as Los Angeles's snaffling of water from farmers 300 miles away. But much of his material is fresh and powerful, taken from such previously unplumbed sources as the bureau's ''blue envelope'' (secret correspondence) files and a marvelous, hair-down interview with Floyd Dominy, its free-swinging former commissioner. The 1976 collapse of the Teton Dam in Idaho - an instance of a structure that never should have been built - is detailed for the first time, with all its implications of carelessness and incompetence. Mr. Reisner also makes clear that much Western irrigation has been based on reckless ''mining'' of water in the great Ogallala Aquifer, which extends into seven states, from Texas to South Dakota. The severe depletion of this eons-old unrenewable resource, he says, has been matched in other areas by a reckless indifference to the accumulation of salts in soils. This has killed farmland and caused drainage crises like the current mess at California's Kesterson Reservoir, where pollution has poisoned the wildlife.

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Sean Costello

Confidence Game

by Dean Starkman, CJR

“The question that mass amateurization poses to traditional media is ‘What happens when the costs of reproduction and distribution go away? What happens when there is nothing unique about publishing anymore because users can do it for themselves?’ We are now starting to see that question being answered.”—Clay Shirky

“The whole notion of ‘long-form journalism’ is writer-centered, not public-centered.”—Jeff Jarvis

“As a journalist, I’ve long taken it for granted that, for example, my readers know more than I do—and it’s liberating.”—Dan Gillmor

“As career journalists and managers we have entered a new era where what we know and what we traditionally do has finally found its value in the marketplace, and that value is about zero.”—John Paton

“The story is the thing.”—S. S. McClure

{excerpt}

No one reading this magazine needs to be told that we have crossed over into a new era. Industrial-age journalism has failed, we are told, and even if it hasn’t failed, it is over. Newspaper company stocks are trading for less than $1 a share. Great newsrooms have been cut down like so many sheaves of wheat. Where quasi-monopolies once reigned over whole metropolitan areas, we have conversation and communities, but also chaos and confusion.

A vanguard of journalism thinkers steps forward to explain things, and we should be grateful that they are here. If they weren’t, we’d have to invent them. Someone has to help us figure this out. Most prominent are Jeff Jarvis, Clay Shirky, and Jay Rosen, whose ideas we’ll focus on here, along with Dan Gillmor, John Paton, and others. Together their ideas form what I will call the future-of-news (FON) consensus.

According to this consensus, the future points toward a network-driven system of journalism in which news organizations will play a decreasingly important role. News won’t be collected and delivered in the traditional sense. It will be assembled, shared, and to an increasing degree, even gathered, by a sophisticated readership, one that is so active that the word “readership” will no longer apply. Let’s call it a user-ship or, better, a community. This is an interconnected world in which boundaries between storyteller and audience dissolve into a conversation between equal parties, the implication being that the conversation between reporter and reader was a hierarchical relationship, as opposed to, say, a simple division of labor.

At its heart, the FON consensus is anti-institutional. It believes that old institutions must wither to make way for the networked future. “The hallmark of revolution is that the goals of the revolutionaries cannot be contained by the institutional structure of the existing society,” Shirky wrote in Here Comes Everybody, his 2008 popularization of network theory. “As a result, either the revolutionaries are put down, or some of those institutions are altered, replaced or destroyed.” If this vision of the future does not square with your particular news preferences, well, as they might say on Twitter, #youmaybeSOL.

And let’s face it, in the debate over journalism’s future, the FON crowd has had the upper hand. The establishment is gloomy and old; the FON consensus is hopeful and young (or purports to represent youth). The establishment has no plan. The FON consensus says no plan is the plan. The establishment drones on about rules and standards; the FON thinkers talk about freedom and informality. FON says “cheap” and “free”; the establishment asks for your credit card number. FON talks about “networks,” “communities,” and “love”; the establishment mutters about “institutions,” like The New York Times or mental hospitals.

The blossoming of new voices, the explosion of conversation, has in fact been breathtaking, a modern marvel. News outlets have been forced to step down from their pedestals, and that’s mostly a good thing. The idea of communities reporting on themselves, pooling knowledge in service of journalism, is indeed attractive. But if the FON consensus is right, then the public has a problem. You can call it the Ida Tarbell problem, or you can call it the Nick Davies problem. The problem is that journalism’s true value-creating work, the keystone of American journalism, the principle around which it is organized, is public-interest reporting; the kind that is usually expensive, risky, stressful, and time-consuming. Public-interest reporting isn’t just another tab on the home page. It is a core value, the thing that builds trust, sets agendas, clarifies public understanding, challenges powerful institutions, and generates reform. It is, in the end, the point.

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The Resentment Machine

[ed.  I've hesitated posting this because I'm not sure I support the generalizations that contribute to the author's central thesis, but I've read enough articles by others in the Millennial generation to believe there must be some relevancy in this argument.] 

The immiseration of the digital creative class

by Freddie deboer, New Inquiry

The popular adoption of the internet has brought with it great changes. One of the peculiar aspects of this particular revolution is that it has been historicized in real time—reported accurately, greatly exaggerated, or outright invented, often by those who have embraced the technology most fully. As impressive as the various changes wrought by the exponential growth of internet users were, they never seemed quite impressive enough for those who trumpeted them.

In a strange type of autoethnography, those most taken with the internet of the late 1990s and early 2000s spent a considerable amount of their time online talking about what it meant that they were online. In straightforwardly self-aggrandizing narratives, the most dedicated and involved internet users began crafting a pocket mythology of the new reality. Rather than regarding themselves as tech consumers, the most dedicated internet users spoke instead of revolution. Vast, life-altering consequences were predicted for these rising technologies. In much the same way as those speaking about the importance of New York City are often actually speaking about the importance of themselves, so those who crafted the oral history of the internet were often really talking about their own revolutionary potential. Not that this was without benefits; self-obsession became a vehicle for an intricate literature on emergent online technology.

Yet for all the endless consideration of the rise of the digitally connected human species, one of the most important aspects of internet culture has gone largely unnoticed. The internet has provided tremendous functionality, for facilitating commerce, communication, research, entertainment, and more. Yet for a comparatively small but influential group of its most dedicated users, its most important feature, the killer app, is its power as an all-purpose sorting mechanism, one that separates the worthy from the unworthy—and in doing so, gives some meager semblance of purpose to generations whose lives are largely defined by purposelessness. For the postcollegiate, culturally savvy tastemakers who exert such disproportionate influence over online experience, the internet is above and beyond all else a resentment machine.

The modern American “meritocracy,” the education/employment vehicle, prepares thousands of upwardly mobile young strivers for everything but the life they will actually encounter. The endlessly grinding wheel of American “success” indoctrinates young people with a competitive vision that most of them never escape. The numbing and frenetic socioacademic sorting mechanism compels most of the best and the brightest adolescents in our middle and upper class to compete for various laurels from puberty to adulthood. School elections, high school and college athletics, honors societies, finals clubs, dining clubs, the subtler (but no less real) social competitions—all make competition the natural habitus of American youth. Every aspect of young adult life is transformed into a status game, as academics, athletics, music and the arts, travel, hobbies, and philanthropy are all reduced to fodder for college applications.

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Illustration: (Geoff McFetridge, via)

Why Americans Won't Do Dirty Jobs

by Elizabeth Dwoskin, Bloomberg Businessweek

Skinning, gutting, and cutting up catfish is not easy or pleasant work. No one knows this better than Randy Rhodes, president of Harvest Select, which has a processing plant in impoverished Uniontown, Ala. For years, Rhodes has had trouble finding Americans willing to grab a knife and stand 10 or more hours a day in a cold, wet room for minimum wage and skimpy benefits.

Most of his employees are Guatemalan. Or they were, until Alabama enacted an immigration law in September that requires police to question people they suspect might be in the U.S. illegally and punish businesses that hire them. The law, known as HB56, is intended to scare off undocumented workers, and in that regard it’s been a success. It’s also driven away legal immigrants who feared being harassed. (...)

His ex-employees joined an exodus of thousands of immigrant field hands, hotel housekeepers, dishwashers, chicken plant employees, and construction workers who have fled Alabama for other states. Like Rhodes, many employers who lost workers followed federal requirements—some even used the E-Verify system—and only found out their workers were illegal when they disappeared.

In their wake are thousands of vacant positions and hundreds of angry business owners staring at unpicked tomatoes, uncleaned fish, and unmade beds. “Somebody has to figure this out. The immigrants aren’t coming back to Alabama—they’re gone,” Rhodes says. “I have 158 jobs, and I need to give them to somebody.”

There’s no shortage of people he could give those jobs to. In Alabama, some 211,000 people are out of work. In rural Perry County, where Harvest Select is located, the unemployment rate is 18.2 percent, twice the national average. One of the big selling points of the immigration law was that it would free up jobs that Republican Governor Robert Bentley said immigrants had stolen from recession-battered Americans. Yet native Alabamians have not come running to fill these newly liberated positions. Many employers think the law is ludicrous and fought to stop it. Immigrants aren’t stealing anything from anyone, they say. Businesses turned to foreign labor only because they couldn’t find enough Americans to take the work they were offering.

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Photo: Peter van Agtmael

Scholarly Research Papers: 30 Key, Free Websites

by Roddy MacLeod

Below, I’ve listed 30 freely available websites and services that help anyone find details of new scholarly research.  These are services which link directly to research papers or reports or conference papers or pre-prints or theses which have appeared in journals or subject/institutional repositories, or elsewhere; and especially services which produce RSS feeds, because I’m always interested in RSS, as RSS can be an excellent facility for keeping up-to-date.

These are not services which only allow you to Search, but rather ones which let you browse, or which provide lists of, or information about, new research output, with links to the actual papers.

The first few sites showcase, in various ways, new research:

1. AlphaGalileo calls itself “…the world’s independent source of research news.”  This service distribute news releases and other information from science, health, technology, the arts, humanities, social sciences and business to the world’s media.  As well as News releases, they also have Publication announcements which link to new scholarly books and journal articles.  The news releases and publication announcements can be read by anyone, however there are subscription rates for organisations to post news.  Over 1,700 research organisations use the service – mostly organisations and the larger publishers, rather than individual researchers.  There are RSS feeds for broad subject areas, regions and countries.  For example, this is the feed for Applied Science.

2. ScienceDaily offers readers news, on a subject basis, about the latest scientific discoveries.  It is freely accessible with no subscription fees.  It contains over 65,000 articles – here’s one example, entitled Emulating Nature for Better Engineering, which covers how UK researchers describe a novel approach to making porous materials, solid foams, more like their counterparts in the natural world, including bone and wood in the new issue of the International Journal of Design Engineering.  That particular story was reprinted by ScienceDaily from materials provided by Inderscience, via AlphaGalileo (see above).  Other articles are produced from materials provided by institutions, organisations and others directly to ScienceDaily or through press release services.  ScienceDaily also has RSS feeds, for example Electronic News.

3. Futurity aggregates research news produced by a consortium of participating universities, on a broad subject basis (Earth & Environment, Health & Medicine, Science & Technology, and Society & Culture).  Sometimes, the news items link to published articles, and sometimes they link to research centres or groups.  The university partners are members of the Association of American Universities (AAU), the Russell Group, and the Group of Eight.  There are currently 62 universities in the consortium, which includes the following UK universities: Cardiff University, King’s College London, University College London, University of Leeds, University of Nottingham, University of Sheffield, University of Southampton, and the University of Warwick.   Futurity has RSS feeds, e.g. Science & Technology.

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Current Events: Contagion

by Steven Erlanger, NY Times

Since the start of the euro crisis two years ago, the big fear has been contagion, that market unease about the high debt and slow growth in Europe’s southern rim would infect the core. On Wednesday, contagion arrived with brute force.

Italy, a central member of the euro zone and its third-largest economy, struggled to find a new government as anxious investors drove Italian bond rates well above 7 percent and the markets tumbled worldwide. And although critics have warned of just such an escalation for months, European leaders again were caught without a convincing response.

Unappeased by the imminent resignation of Prime Minister Silvio Berlusconi, investors appeared to have focused on the political gridlock in Italy that seemed likely to follow his departure from office, and the unenviable task awaiting a successor: restoring growth in a country that has seen almost none in a decade, and financing $2.57 trillion in debt. Italy, unlike Greece, is seen as too big to default and too big for Europe to bail out.

Only days after the Group of 20 meeting in Cannes, France, where President Obama and other world leaders urged European officials to take bolder action, they appeared frozen in past positions. The German chancellor, Angela Merkel, met with her kitchen cabinet of economic “wise ones.” They proposed the creation of a 2.3 trillion euro debt repayment fund that would pool and jointly finance debts of all 17 members of the euro zone in return for some conditions like legal debt limits and collateral.

But Mrs. Merkel effectively dismissed the idea, saying that it could be studied and would in any case require major treaty changes, which would take time. She instead emphasized that deep economic changes were required in some member states and that Europe needed to restore fiscal discipline.

“It is time for a breakthrough to a new Europe,” Mrs. Merkel said. “A community that says, regardless of what happens in the rest of the world, that it can never again change its ground rules, that community simply can’t survive.”

But the German prescription of austerity is not popular. It is Berlin, citing the very treaties that it now wants to adjust, that has resisted the boldest answer to the euro crisis — using the European Central Bank as the euro zone’s lender of last resort. Berlin does not even want to sanction American-style quantitative easing to promote economic growth, one recipe to stoking growth and reducing the debt burden.

“Contagion is alive and well,” said Rebecca Patterson, chief market strategist at J.P. Morgan Asset Management. Unlike Greece, she said, Italy could pose “systemic” risks to the global economy, accounting for 20 percent of the gross domestic product of the euro zone. “People are wondering if we’ve moved to a new level of the crisis.”

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photo: Justin Lane/European Pressphoto Agency

The Coming Death Shortage

by Charles C. Mann, The Atlantic  {excerpt}

The scientists' argument is circuitous but not complex. In the past century U.S. life expectancy has climbed from forty-seven to seventy-seven, increasing by nearly two thirds. Similar rises happened in almost every country. And this process shows no sign of stopping: according to the United Nations, by 2050 global life expectancy will have increased by another ten years. Note, however, that this tremendous increase has been in average life expectancy—that is, the number of years that most people live. There has been next to no increase in the maximum lifespan, the number of years that one can possibly walk the earth—now thought to be about 120. In the scientists' projections, the ongoing increase in average lifespan is about to be joined by something never before seen in human history: a rise in the maximum possible age at death.

Stem-cell banks, telomerase amplifiers, somatic gene therapy—the list of potential longevity treatments incubating in laboratories is startling. Three years ago a multi-institutional scientific team led by Aubrey de Grey, a theoretical geneticist at Cambridge University, argued in a widely noted paper that the first steps toward "engineered negligible senescence"—a rough-and-ready version of immortality—would have "a good chance of success in mice within ten years." The same techniques, De Grey says, should be ready for human beings a decade or so later. "In ten years we'll have a pill that will give you twenty years," says Leonard Guarente, a professor of biology at MIT. "And then there'll be another pill after that. The first hundred-and-fifty-year-old may have already been born."

Critics regard such claims as wildly premature. In March ten respected researchers predicted in the New England Journal of Medicine that "the steady rise in life expectancy during the past two centuries may soon come to an end," because rising levels of obesity are making people sicker. The research team leader, S. Jay Olshansky, of the University of Illinois School of Public Health, also worries about the "potential impact of infectious disease." Believing that medicine can and will overcome these problems, his "cautious and I think defensibly optimistic estimate" is that the average lifespan will reach eighty-five or ninety—in 2100. Even this relatively slow rate of increase, he says, will radically alter the underpinnings of human existence. "Pushing the outer limits of lifespan" will force the world to confront a situation no society has ever faced before: an acute shortage of dead people.

The twentieth-century jump in life expectancy transformed society. Fifty years ago senior citizens were not a force in electoral politics. Now the AARP is widely said to be the most powerful organization in Washington. Medicare, Social Security, retirement, Alzheimer's, snowbird economies, the population boom, the golfing boom, the cosmetic-surgery boom, the nostalgia boom, the recreational-vehicle boom, Viagra—increasing longevity is entangled in every one. Momentous as these changes have been, though, they will pale before what is coming next.

From religion to real estate, from pensions to parent-child dynamics, almost every aspect of society is based on the orderly succession of generations. Every quarter century or so children take over from their parents—a transition as fundamental to human existence as the rotation of the planet about its axis. In tomorrow's world, if the optimists are correct, grandparents will have living grandparents; children born decades from now will ignore advice from people who watched the Beatles on The Ed Sullivan Show. Intergenerational warfare—the Anna Nicole Smith syndrome—will be but one consequence. Trying to envision such a world, sober social scientists find themselves discussing pregnant seventy-year-olds, offshore organ farms, protracted adolescence, and lifestyles policed by insurance companies. Indeed, if the biologists are right, the coming army of centenarians will be marching into a future so unutterably different that they may well feel nostalgia for the long-ago days of three score and ten.

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