Sunday, August 31, 2014


To help celebrate workers on Labor Day, let's watch Matt Damon zero in on a smug libertarian wannabe, who thinks tenure is a bad thing since it creates a disincentive for teachers ...

And, for the record, initiative, creativity, and innovation are human constants that go beyond the mind-numbingly narrow threat of being fired, or even the promise of tax cuts, as I make clear here.

- Mark 

Saturday, August 30, 2014


Yeah, I know ... but you want to keep in mind that this makes about as much sense as the U.S. Supreme Court saying in their Citizen's United decision that corporations are people too.

- Mark

Friday, August 29, 2014


After 75 years of state-owned oil, Mexico is reforming its oil industry by opening it up to foreigners. Here's a couple of thoughts on what it means for big oil (EconoMonitor).

Does inherited wealth really help the economy as economist Greg Mankiw suggests? A reply to Greg Mankiw (EconoMonitor).

How Wall Street tobacco deals, which were supposed to help state governments financially, left states with billions in toxic debt (Pro Publica / Buzz Flash).

Whether you're into conspiracies or not, this is still worth reading: "Syria intervention plan fueled by oil interests, not chemical weapon concern (The Guardian).

5 simple reasons Americans are getting fatter (Salon).

How "the stupidest man on the internet" helped jump start the Ferguson lie that Fox News - and especially Sean Hannity - ran with as they smeared Michael Wilson (Alter Net / Salon).

Surprise, surprise ... Bill O'Reilly gets schooled on 'white privilege' by Megyn Kelly (Salon).

Back to school: Widening inequality increasingly explains who gets a good education, and who doesn't  (Robert Reich).

Do as we say, not as we do ... Our inside-trading Congress tells Securities Exchange Commission (SEC) investigators to take a hike (Zero Hedge / Wall Street Journal).

Shaking down the elderly for student loan debt should not be allowed (Buzz Flash).

No censorship, but YOU don't have access? Government blocking certain journalists for access to information (Buzz Flash).

Poverty Capitalism: Outsourcing state duties to the private sector, and making the poor pay for it (NY Times).

Sugar plant removed safety device 13 days before temp workers death (Pro Publica).

How's that Obamacare thingy working out for the GOP? Not very good (The National Memo).

Dire predictions of endless waits for a doctor under Obamacare have proven unfounded (Center for Public Integrity).

Did you know that contraception is a conspiracy designed to ruin the family? This and other crazy myths told by the religious right (Alter Net).

Watch these painfully ignorant Mississippians explain why they hate Obama and the government, but love 'murka (ATTP).

Florida county unanimously bans atheists from delivering invocations at public meetings (Alter Net).

What happens when America's police become America's mental-health workers (New York Magazine).

Close to 200 police departments in the U.S. have been "suspended" for losing U.S. military-grade weaponry (RT).

Top 10 Center for Public Integrity investigations that you may have missed (Center for Public Integrity).

Irreversible damage from climate change, according to leaked UN draft report (Bloomberg).

Fearing for the Second Amendment, anti-government militia groups growing in the U.S. (Center for Public Integrity).

Christian Evangelicals and American foreign policy (Council on Foreign Relations).

Host of Emmy winning Cosmos series Neil de Grasse Tyson discusses backlash from religious groups who don't agree with evolution, why he doesn't debate, and other interesting stuff (Alter Net).

- Mark

Thursday, August 28, 2014


Not coincidentally, during this period the amount of credit card debt and total household debt carried by middle class America soared ...

Credit Card Debt in America, 1965-2010: Source: St. Louis Federal Reserve.
Household Debt in America, 1960-2010. Source: Federal Reserve Bank of San Francisco.

Question of the Day: Are these wage and debt dynamics tied together, or just coincidental?

I have a few thoughts on the topic here.

- Mark

FYI:  While GM has cut hourly pay significantly since the early 1960s, it's still better than Walmart's. Check it out here. Also, Robert Reich has some different numbers for GM and Walmart here. Whatever numbers you want to cite, the larger point remains: There's a race to the bottom going on in America, and the middle class is losing out, big time. 

Tuesday, August 26, 2014


As a reminder, Justice Ginsburg's dissent here is all about the Supreme Court's reckless 5-4 decision in Shelby County v. Holder (2013), which held that the key components of the Voting Rights Act of 1965 were no longer necessary. 

The majority's argument was based on the idea that we're effectively a post-racial society.

Writing in support of the majority opinion Justice Clarence Thomas argued that Section 5 of the Voting Rights Act was effectively unconstitutional because blatant discrimination against certain voters is no longer evident. 

Justice Thomas and the majority didn't address the "hidden in plain site" efforts at voter suppression.

For more information click here.

- Mark


You'll get the reference to ancient Rome by the time you finish this post ...

So I'm reading a FB post that makes it clear that one of the biggest fiscal problems we have as a nation is how the tax burden has shifted in America. Specifically, corporate America now pays a smaller share of our tax revenue compared to what it once paid. Where corporate America once paid over 30 percent of our total tax bill today they only pay about 9 percent.

This fact is not new. In fact, I've posted on this many times, in many different ways, over the past 5 years.

But this is not the story I'm telling here.

What concerns me is how a simple but important fact like corporate tax avoidance can get buried under a pile of ignorance by people who simply don't want to acknowledge reality. Check it out.

In order to avoid thinking about how corporations have reduced their tax bill one contributor in the FB thread noted above ignored tax avoidance and simply complained about "wasteful government spending." He then asked "why do we have to pay income taxes on our social security checks?"

I know. What does "waste" and "social security" have to do with corporate tax avoidance schemes?

The point is neither one of these issues - waste or social security - have anything to do with corporate tax avoidance. The goal of the poster - let's call him "Fred" - is simply to ignore what he doesn't understand, or doesn't want to acknowledge. So Fred changed the topic.

In an effort to help Fred, I decided to explain why we are now paying taxes on Social Security:

Fred, if you don't like the tax on Social Security benefits you can thank Ronald Reagan.  
In both 1938 and 1941 the Treasury Department ruled that Social Security benefits were to be excluded from federal income taxation. Reagan needed to pay for trickle down policies and the military build up so he went after Social Security benefits in 1983. 
Since 1984, a portion (it's a complex table) of Social Security benefits have been subject to federal income taxes. So, yeah, Reagan raised taxes, big time ... 

I then helped Fred out by pointing him to an earlier post of mine, where I explained Ronald Reagan's real history with raising taxes. You might think that this would have been the end of it. Not so fast.

Keep in mind that when dealing with people like Fred you not only have to do their research, and post the facts (which they will do what they can to ignore), you also need to deal with their friends. And many of them hear voices in their heads. This is where "Chip" enters the scene.

Fred's friend Chip came to his rescue (as it were) and decided to chime in with this:

  Under Clinton & Gore
Up to 85% of your Social Security can be Taxed 
Since many of us have paid into FICA for years and are
now receiving a Social Security check every month --
and then finding that we are getting taxed on 85% of
the money we paid to the Federal government to 'put
away' -- you may be interested in the following:

Here's where we learn that Chip is listening to the voices in his head.

First, as you probably noticed, Chip conflates a very conditional "up to 85% of your Social Security can be Taxed" (true) with a very definitive "we are getting taxed on 85% of the money we paid to the Federal government to 'put away' " (not true). In a few words, Chip doesn't understand numbers, or doesn't understand what he reads (or both).

But wait, it gets better.

Chip decided that it would be a good idea to forgo a simple search of the topic, and decided to pilfer and post a thoroughly debunked rant on Social Security "facts," and the Democrats role in making these facts come to life. It's the type of stuff that's discussed on conservative talk radio, and then passed around like Steinbeck's hooch in Cannery Row.

What Chip didn't know is that what he posted is such an entrenched Urban Legend that Snopes appears to have stopped updating Chip's pilfered post back in 2009. Here, check it out.

Making all of this even more surreal is that when Chip posted this stuff on FB he actually had to edit what he posted (how do you edit plagiarized and debunked material, and then pretend to take yourself seriously?).

I told Chip that what he posted was devoid of context and, quite frankly, embarrassing. I let him know that I would have fun with his debunked information on my blog. His response? It was the functional equivalent of "I know you are but what am I?"

At the end of the day, people like Chip have no problem misleading themselves, think it's OK to mislead others, and make it all worse by believing they have nothing more to learn in this world except for what Fox News tells them is real.

After this exchange, I was only thinking one thing: Rome rotted from within, and so it is with America.

Sigh ...

- Mark 

Monday, August 25, 2014


Oh, why can't these guys do the math ...

OK, let's start with this. The $3.5 trillion budget surplus projections cited here are a bit off. When President Bush was awarded the White House by the Supreme Court in 2008, the CBO was projecting $5.6 trillion in surpluses through 2010-11 (our national debt was $5.8 trillion at the time).

This CBO surplus projections were actually rounded down to $3.5 trillion years later.

Still, any way you cut it, President Bush's budget mess goes far beyond the $5 trillion that was added to the national debt under his watch. He also blew through our projected $3.5 trillion surplus money.

If we add all of this up ($8.5 trillion) and throw in the interest due on this amount (a little over $100 billion per year) it's clear that President Bush's fiscal record should never have the word "discipline" mixed into the discussion.

- Mark

Sunday, August 24, 2014


If you don't recognize the guy on the left, and see the guy on the right, you might want to reconsider where you get your information ...

- Mark


During my teens I was lucky enough to grow up in Boulder Creek, California. Take away the stop lights in Ben Lomond and this is what my daily drive to high school and - especially during the summer - to the beach in Santa Cruz looked like ...

- Mark

UPDATE: A couple of things you'll see along the way ...

On Highway 9, in Felton, you'll want to stop here.  It was George's Log Cabin when I lived in the area.

Friday, August 22, 2014


Here's the story behind the sign.

- Mark


Michael Jackson bodyguards recall craziness of protecting him (The Telegraph).

This 31-year old is tearing apart the conservative Heritage Foundation (New Republic).

Restaurant bans tipping. Here's what they do instead (The Daily Meal).

States with stand your ground laws have seen an increase in homicides (ABA Journal).

We now know the price of ignorance. It's $99.95 ... for a one year subscription to the Sarah Palin Channel (Nation of Change).

10 things to know about Ferguson (Alternet).

Rep. Steve King (R-Iowa): Since Ferguson rioters are all of the same 'continental origin,' racial profiling is not a concern (Right Wing Watch).

Nation's top civil rights attorneys say discriminatory Jim Crow voting laws abound (Popular Resistance).

Pretty much forgotten because of events in Ferguson: African-American holding a toy rifle in a Walmart in Ohio is shot down by police (Business Insider).

BBC staff told to stop inviting cranks on to science programs (The Telegraph).

Debunking the right's enduring myth: The truth about Richard Nixon and the fight to overturn the 1960 election (Salon).

Solution to Iraq quagmire is peace with Iran, says ex-Colin Powell advisor (Alternet).

Economic inequality, not just wages at the bottom, needs to be addressed (Washington Post).

Three charts that will make your right-wing relatives and friends heads spin (Alternet).

There's another mammoth global trade deal to think about, TISA (Nation of Change).

Rick Wiles: "Ebola could solve America's problems with atheism and homosexuality" (and those who have had abortions and use pornography) since they're "not protected by God" (Right Wing Watch).

Rick Perry won't back away from Obama border conspiracy theory, where he claims President Obama is orchestrating the surge of immigrants arriving at our borders (Huffington Post).

House Majority Leader Kevin McCarthy's wife, Judy, thinks "it's really scary" that "they don't want you to have the right to be a Christian" (Right Wing Watch).

When an extremist Christian fundamentalist gets to run a whole state this is what happens (Alternet).

Report: Majority of Americans don't want to immediately deport refugee children (National Memo).

Republican turns on party, blow up its crock of nonsense position on refugee kids (Salon).

California's Lake Oroville, today and 3 years ago (NBC News)

Water is bottled and shipped out of drought-ridden California (Nation of Change).

U.S. drought monitor, California (National Drought Mitigation Center).

California reservoir levels (California Department of Water Resources).

Folsom Lake before and after shot (Business Insider).

How ISIS ended up stocked with American weapons (Alternet).

The carnage of capitalism in education, medicine, and globalization (Alternet).

How the American university was killed, in 5 easy steps (Op Ed News).

It's official: Too big to fail is alive and well (EconoMonitor / L. Randall Wray).

20 remarkable facts about Stephen Colbert (Salon).

- Mark 


Imagine hundreds of heavily armed - but "patriotic" - African-Americans showing up to defend the protesters in Ferguson, Missouri. Would Fox defend them for protecting the people of Ferguson's First Amendment right to assemble and speak their minds?

And let's not forget, Cliven Bundy is a cattle grazing deadbeat who owes the federal government about $1 million dollars.

So, yeah, Fox News is still a joke.

- Mark

Thursday, August 21, 2014


- Mark


Here's our smoking hot news. Today the stock market is almost 10,000 points higher than what it was in March of 2009, when the NYSE hit rock bottom after the 2008 market collapse (6,662). It's poised to set yet another (yawn) record.

OK, now for the splash of cold water. The rate of car repossessions jumped more than 70 percent in the second quarter of 2014. Experian is also reporting that 30-day and 60-day delinquency rates climbed during the period.

Debt ridden Goldilocks, running away from the repo man?

The "good" news here is that the surge in delinquencies and repossessions is being driven by borrowers with subprime loans and poor credit scores.

All of this is important because the total value of auto loans in America just hit an all time high of $839 billion, which means that the subprime auto financing boom that pushed the auto industry into good times may be ending. Worse, the financial products (CDOs & ABSs) that are built from subprime loans like these - which helped create the 2008 market crash - could be in trouble too.

So, there you have it. A record breaking stock market on the horizon, while the richest 1 percent continue to get richer. At the same time, with stagnant wages in a precarious economy, ordinary Americans are still in trouble - yes, debt strapped Americans are "ordinary" - which could dampen the prospects of the auto industry.

This is the hot and cold of the American economy.

- Mark 

Wednesday, August 20, 2014


Have you ever wondered why it's more expensive to live in California than it is in Oklahoma? This report and chart from the Tax Foundation won't explain why (it's tied to demand created by population density, natural resources, opportunities, etc.) but it does tell you what a dollar is actually worth in every state ...

- Mark


And one more thing ...

- Mark 

Tuesday, August 19, 2014


With about 11% of the population at war you're probably wondering which countries are currently at war today. Here's a nice review ...

- Mark


Via the American Museum of Natural History, this is pretty cool ...

- Mark

Kudos to Tom for sharing.

Monday, August 18, 2014


John Oliver nails it as he discusses the militarization of the police, and what's happening in Ferguson, Missouri ...

- Mark

UPDATE (8-20-14): This seems to me an appropriate addition ...


Several years ago I wrote about the Republican-led 30 year 'race to the bottom.' In the post, which I later turned into an editorial piece for our local paper, I described how the primary goal of the GOP was not to put out any new ideas. Their goal is simply to turn the state into a toxic and inept governing body by depriving it of the resources it needs to function.

In 2007 over 100 cars were traveling on Minnesota's I-35W bridge when it collapsed.

Slashing taxes and dumping the worst private sector disasters on the federal government has saddled federal and state governments with so much debt that they are unable to make even the most basic repairs on our crumbling infrastructure, let alone major public investments.

This was no accident.

Conservative political advocate Grover Norquist admitted as much when he said, "I don't want to abolish government. I simply want to reduce it to the size where I can take into the bathroom and drown it."

Apart from not being able to represent and protect the will of the people, the GOP's 30 year race to the bottom had the added effect of making market players fabulously wealthy through a string of tax cuts, bailouts, reckless deregulation, and favorable legislation. Getting the government off of our backs was really the GOP's way of weakening the regulatory arm of the state while transferring wealth to America's economic elite.

The race to the bottom rationale is a simple one. The Republican 'trickle down' (based on the notion that if the rich had more money in their pockets they would invest more, thus creating more jobs) anti-tax jihad was always a gimmick. Economists who don't drink their lunches made it clear that tax cuts for the rich would not produce jobs or create the budget surpluses needed to pay down the debt, as Ronald Reagan promised.

What we need to keep in mind is that the promise of paying down the national debt or creating jobs were never the real goals of trickle down economics. Tax cuts were always a Trojan Horse designed to - in terms the GOP likes to use - "starve the beast" (i.e. the government).

While cutting taxes worked out well for the GOP's base and the richest 1 percent trickle down economics ended up robbing the state of the revenue it needs to operate, while creating income inequality gaps that threaten the larger American economy - as Standard & Poor's recent report on inequality has recognized.

Again, this was no accident.

Since the race to the bottom began federal and state governments have had to borrow and use budgetary gimmicks to fill in he financial cracks. This has worked out great for Wall Street's biggest financial institutions.

For example, cash starved states ended up using anticipated tobacco settlement revenue to secure loans from Wall Street's biggest financial institutions to pay current expenditures and stay afloat financially. Today they're paying the piper. Tobacco settlement based loans of $3 billion (transactions that are called capital appreciation bonds) will cost states about $64 billion.

If it sounds like a loan sharks dream come true to you, rest assured, you're not alone in your thinking.

But wait. It gets better.

States continue to borrow from Wall Street to fund specific programs that are cash starved because of tax and budget cuts. When states borrow from Wall Street to fund basic programs like Head Start, transactions that generate social impact bonds, states must pay dividends to private market players rather than use cost savings or surpluses to fund other state programs.

Then we have Wall Street refusing to renegotiate complex interest rate swap deals with American cities, in spite of the fact that Wall Street continues to be bailed out with taxpayer backed funds after they collapsed the American economy in 2008. City services and programs have been cut, privatized, or made available to social impact bond investors in the process.

Again, none of this is an accident. Starving the beast has served Wall Street well.

The best part of these developments for Wall Street, when it comes to social impact bonds, is that they get to pat themselves on the back for doing "the right thing" (providing loans and funding social programs). But, the reality is they are cherry picking cities and programs they want to fund - and make money off of - years after one party has deliberately sabotaged the functions of the state.

In effect, they are coopting the policy making prerogative of the state, while sucking off of the tax payer funded tree life.

Ignored by the GOP (and the media) in all of this is that their anti-tax jihad resulted in Ronald Reagan effectively tripling our national debt, and saw President Bush effectively double it. Worse, apart from squandering hundreds of billions in budget surpluses, President Bush also left his successor trillion dollar deficits as far as the eye could see.

Not coincidentally, President Obama's financial hands have been tied ever since he entered the White House. None of this has worked out for America's middle-class.

This, once again, was no accident.

Then we have the seemingly never-ending IRS story.

The Center for Public Integrity is reporting that the IRS can no longer do the work that it's supposed to do, which is helping to serve the supporters of the Republican Party well. Here's how.

Hobbled by the IRS-Tea Party investigation - which Rep. Darrell Issa (R-CA) keeps digging up - the IRS no longer has the resources, time, or institutional will to go after the 'dark money' that flows from unaccountable political organizations that claim to be non-profit institutions.

When it was learned, for example, that the non-profit Crossroads Grassroots Policy Strategies - co-founded by Ed Gillespie and former Bush political manager Karl Rove - had spent more than the legal limit on political campaigns it was expected that the IRS would flag it and take action. Then the IRS-Tea Party allegations hit the scene.

Allegations were made that conservative groups were being singled out for review by the IRS at a higher rate than progressive liberal groups. All of this, if we are to believe the story line, was initiated by President Obama and his administration. This is what's being ignored:

1. IT STARTS UNDER BUSH APPOINTEE: The targeting of conservative non-profit groups with political agendas started internally within the agency under IRS commissioner Douglas Shulman, who was appointed by President Bush. 
2. THE TEA PARTY CURVE: Liberal groups were also called out, though not to the same degree. Here's why. After the Tea Party entered the picture in 2010 thousands of new conservative groups popped up, asking for non-profit status. In this case, being grouped together is a numbers game. It's the same as when you find yourself lumped into your teachers "curve" when being graded in a larger class. 
3. DOING THEIR JOB: Going after organizations claiming non-profit status is the job of the IRS, period. What's happening is that the GOP is simply harassing the IRS, to their benefit, for doing their job.

Unfortunately, none of this matters. Since the congressional-led IRS investigation began the agency has been cowed into ignoring legitimate investigations. With budget cuts already hindering the investigative arm of the IRS this is especially the case today (check out IRS investigation tracking charts here).

Today the IRS can no longer function as it once did.

As former U.S. Treasury fellow Alex Reid put it, when it comes to money and politics the IRS is effectively "working to sweep up after the parade." This is working out especially well for the mysterious dark money pools used to fund political campaigns.

Again, none of this is an accident.

The point here is that going after the IRS when the agency was effectively doing its job after a sudden surge in politically inspired applications makes this more political than it should be.

In reality, the IRS story should be seen as part of the GOP's larger "hate the state" 30 year race to the bottom, and nothing more.

- Mark

Wednesday, August 13, 2014


House Republicans have unveiled one part of their new plan for winning elections in 2014. They're re-purposing news releases and then posting them on a fake news site. To be sure, they're meant to look like real news sites, but they're actually used to attack Democrats.

In the past the GOP's campaign team previously put up phony Democratic candidate sites. Now they're in the phony news game.


Some might call it simple misleading. Others believe it's propaganda. Still others might think it's deliberately deceitful and unethical. In all cases, it just shows that the campaign arm of the House GOP don't care for telling the truth.

One's left to wonder, how long will it be before Fox & Friends are citing the fake news sources?

- Mark 

Tuesday, August 12, 2014


Interesting chart shows how many miles you can drive after working one hour ...

Check out the article, and the author's methods, here.

- Mark 


For the record, the drive to treat influenza during World War I, and the efforts made to cure polio in the 1950s, were not led by the private sector. In fact, when Dr. Jonas Salk found a cure for polio and was asked who owned the patent to the vaccine he replied, "There is no patent. Could you patent the sun?"

Just saying.

- Mark


I've posted this before, but not the video clip below.

Again, this isn't rocket science. Iceland's President Ólafur Grímsson explains Iceland's quick recovery from economic crisis, while helping us understand what's wrong with the U.S. economy. In a few words, our political leaders adhere to a failed economic ideology that's more cult than it is analysis ...

- Mark

Monday, August 11, 2014


- Mark


Below we get a nice over view of ISIS that also explains what they're doing in Iraq ...

If you have more time here's 16 things about ISIS and Iraq that you need to know. The Guardian also has an informative 3 minute video too.

- Mark


In several of my classes we discuss why some countries are poor while others are rich. In the process we look at how history, political development, imperialism, and culture (among others) hinder or help nations develop.

We also look at inappropriate or poorly thought out policy decisions that set nations back. To help students understand what happens when we fail to think policy decisions through - as we are currently seeing in Iraq and Afghanistan (more on this below) - I occasionally use the experience of a village in Borneo in the 1950s.

With the Borneo village story we learn that malaria was undermining the ability of farmers to work and produce crops. To deal with the problem the World Health Organization sent supplies of DDT - yeah, that DDT - to help eradicate the malaria carrying mosquitoes. Large amounts of DDT were sprayed inside and around homes in the village.

The problem was that as the mosquitoes fell dead hordes of roaches and insects could now feast on the dead mosquitoes. After eating the mosquitoes the roaches and insects were now filled with DDT. The DDT laced roaches and insects, in turn, were eaten by lizards indigenous to the region (geckos), who also became laced with DDT.

This made things fun for the cats. They found the now lethargic and slow lizards convenient play things, who also made a good meal. The lizard population plummeted as the cats feasted on the reptiles.

Things got worse for the cats because after rubbing and scratching their way through the DDT sprayed homes they continued to groom regularly. As they licked their fur in their usual cleaning routine the cats ingested even more DDT. Combined with eating DDT-laced lizards the village's cats became toxic and died off, en masse.

Cats, as we all know, are natural predators of rats. With no more cats in the village the rat population exploded and began eating the villagers crops. But a shortage of food was the least of their worries. Villagers were now concerned with the plague.

To deal with the rat problem officials had cats flown into the region and air dropped into the Borneo village by the Royal Air Force.

The Borneo village story is a humorous lesson in what happens when we don't think things through. But it's also instructive because it's a cautionary tale about what happens when people who have strong ideas, or entrenched ideologies, make decisions for others.

In this case we had a group of people from the West who said that the Borneo village needed to emulate the experiences of the West. To do this villagers were prodded to produce more agriculture products so Indonesia could export more and acquire more income.

According to a larger strategy Indonesia was then supposed to use the new revenue to invest and industrialize. This strategy was a product of a widely accepted theory at the time, Modernization Theory.

Modernization Theory derived its energy from the post-war era, when the United States became concerned that poor and developing nations might turn to the Soviet Union for assistance after World War II. The primary assumption of Modernization Theory is rooted in American Exceptionalism. It told us that we alone could help the rest of the world develop and become "just like us." We just needed to apply modern science techniques and then used our unique historical experiences as a guide for the rest of the world.

This was our gift to humanity.

Mystic wisdom ... an integral part of American Exceptionalism

Of all the theories of development used to inform countries as they became modern and "just like us" perhaps the most absurd - at least for me - is Modernization Theory (or MT). In very simple terms, MT ignores both history and the manipulation of markets, while naively assuming free markets alone will save the day.

Apart from glossing over how the developed countries became developed by exploiting the poorer countries (the history of imperialism and mercantilism), MT also ignores the developing countries early dependence on raw material goods and how they are affected by larger rule-based impediments to fair trade (structuralism). Worse, MT doesn't acknowledge the role of the state in creating the conditions under which wealth is created (choosing to believe in the myth of the free market).

The tariff-laced protectionist history of the United States is virtually ignored too.

In spite of all this (and more), MT was used to inform and justify our interventions around the world as we tried to lift the rest of the poorer nations into modernity after World War II. Unfortunately Modernization Theory's ahistorical and market-based assumptions are still promoted by many (referred to as Neoliberalism today).

In fact, the developmental assumptions we embraced before we went into Afghanistan and Iraq followed many of the assumptions of MT. But we are far beyond the simple policy decisions that had the Royal Air Force parachuting cats into villages so farmers could (ultimately) farm more. No, we've supercharged the process.

Apart from invading and installing puppet governments in Afghanistan and Iraq, we're also shipping billions to prop up free-loading private contractors, and to help spike markets. In the process we're losing billions of dollars to theft and corruption (perhaps as much as $70 billion).

Then we have the Borneo village-like forced policy walk in Afghanistan that says do it our way.

American agriculture experts marvel over soybeans as a protein rich super food. They believed that if they introduced soybeans into Afghanistan that Aghani farmers would gravitate to the product, reduce malnutrition in the country, and help to make Afghanistan food sovereign. There was the drug angle too. If Afghanistan could start producing soybeans for export they would have a viable alternative to cultivating the opium poppy (for heroin).

A miracle protein product. Food sovereignty. Fighting the war on drugs. What could go wrong? It turns out, plenty. Like our Borneo village case, the issue wasn't thought through.

The list of things that weren't right with the soybean story in Afghanistan is long.

First, no feasibility studies were ever done by the parties involved, which included the American Soybean Association (ASA). As well, the ASA had a big hand in pushing for the multi-million dollar U.S. Department of Agriculture soybean grant project. Then we have the reality that millions of dollars were used to purchase soy products from U.S. farmers, rather than in building market viability in Afghanistan.

Worse, widely ignored - if it was even read - was research done by the United Kingdom's Department for International Development. The report concluded that "soybeans were inappropriate for conditions and farming practices in northern Afghanistan, where the program was implemented ...".

Finally, we have the logic behind the drug trade. As I tell my students when I lecture on drug economies, you don't have to be a rocket scientist to understand why the opium trade is favored by poor farmers in places like Afghanistan (as this brief review helps to explain).

Still, none of this mattered to the grant makers at the U.S. Department of Agriculture.

The USDA decided to spend $34 million to introduce and promote soy-based products in Afghanistan. What did we get for our money? We learned that Afghanis didn't like the stuff when it was introduced. We also learned that they still didn't like it after we spent millions promoting the product. Then we have the problems of sub par harvests (as the UK study suggested would happen), while the logic of the drug trade made converting to soybeans a nonstarter for most farmers targeted for conversion.

In a few words, the soy effort in Afghanistan has fallen flat on its face. As Yogi Berra might say, it's Modernization Theory déjà vu all over again

To be sure, we aren't parachuting cats into Afghanistan. But we are flying pallets of money into Iraq, and can't account for billions in cash.

Pallets of money airlifted into Iraq. 

Guarding pallets of money in Iraq.

These on the ground realities, coupled with the many political and military mistakes that we have made in the region, have turned Iraq and Afghanistan into unmitigated disasters. They are complete foreign policy blunders.

At the end of the day we need to stop naively believing that if we throw enough money at the problem, if we introduce the magic of the market, and if we remove dictators so freedom and liberty can work their magic that democracy and the spirit of the market will flourish around the world. They won't.

The primary assumptions of Modernization Theory - and now Neoliberalism - can't stand the light of the real world. Gaps between the rich and poor nations of the world are increasing, while inequality within nations is surging. There are no "add magic market dust, and stir the liquid of freedom" recipes to development.

Those of us who study the issue have known this for a while now.

Apart from our military and political blundering in Afghanistan and Iraq, one thing is clear: Our economic development strategy when we entered the region after 9/11 was flawed from the beginning, and is still flawed today.

So, yeah, our children will be dealing with this mess in 30 years.

- Mark