Chocolate Helps Lower Blood Pressure

High blood pressure is a significant concern as it significantly raises the incidence of vascular disease and stroke. As a result of stress, poor diet and lifestyle, enzymes in our body produce a substance known as angiotensin II that causes blood vessels to narrow and blood pressure to increase. Standard medical practice is to prescribe ACE inhibitors to inhibit the action of these enzymes, often with mixed results and always dangerous side effects. Researchers have now confirmed that natural flavanols found in cacao from chocolate can lower blood pressure as effectively as the Big Pharma solutions.

Natural Flavanols from Cacao Effectively Regulate Blood Pressure
Researchers have known for some time that the active catechins and procyanidines in many fruits, vegetables and green tea promote health and protect against disease through a variety of biochemical mechanisms. The results of a study published in the Journal of Cardiovascular Pharmacology explains how flavanols from cacao and dark chocolate inhibit the action of angiotensin to influence the body’s fluid balance and effectively regulate blood pressure.

Study Demonstrates Blood Pressure Lowering Effect of ChocolateResearchers have known for some time that the active catechins and procyanidines in many fruits, vegetables and green tea promote health and protect against disease through a variety of biochemical mechanisms. The results of a study published in the Journal of Cardiovascular Pharmacology explains how flavanols from cacao and dark chocolate inhibit the action of angiotensin to influence the body’s fluid balance and effectively regulate blood pressure.

The study involved ten men and six women aged 20 to 45 who were fed 75 grams of unsweetened chocolate with a cacao content of 72%. Blood samples were taken before and again after eating the sample chocolate to analyze the activity of the ACE enzyme. Researchers were amazed to find that the enzyme activity was reduced by 18%, effectively lowering dangerous blood pressure as well or even better than many pharmaceuticals.

The lead author concluded, “Our findings indicate that changes in lifestyle with the help of foods that contain large concentrations of catechins and procyaninides prevent cardiovascular diseases.” It`s important to note that the results were produced using unsweetened cacao as found in many specialty dark chocolates. The same benefits would not be conferred with commonly available sweetened milk chocolate and semi-sweet varieties.

Flavanols From Chocolate Increases Nitric Oxide, Relaxes Blood Vessels
Information reported in the journal BMC Medicine combines the results of 15 independent studies on the vessel dilating effects of flavanols from chocolate. Researchers found that moderate consumption of chocolate with a high percentage of cacao showed significant blood pressure reduction in people with high blood pressure, and no effect on individuals with normal pressure readings. Flavanols increase the natural formation of endothelial nitric oxide that exhibits a relaxing effect on blood vessel walls and lowered blood pressure.

Cacao from chocolate is shown to be yet another example of how a natural compound can promote health and prevent disease. Flavanols and catechins are chemical compounds found in unprocessed foods that are essential to human health. When consumed or supplemented as part of a whole food diet they demonstrate reduced risk of disease without the damaging side effects commonly seen with pharmaceuticals.

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Right time to drink water when it affects better on body.

>> 1 glass after waking up in the morning, helps in activating internal organs.

>> 1 glass after taking bath, decreases blood pressure.

>> 2 glass before eating meal helps in digest system.

>> Half glass of water  before sleeping, helps to avoid heart attack and brain strokes.

Right time to drink water when it affects better on body.

Do you drink water at these times??

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Facts about Banana , You Didn't Know Before ...

• A banana contains Vitamin C, potassium and dietary fiber.
• Bananas do not contain sodium, fat or cholesterol.
• The Vitamin C, which is found in bananas, helps the body to defend and heal against infections. This vitamin also proves valuable in the synthesis of the connective tissue, absorption of iron and the formation of blood.
• Not only are bananas rich in vitamin C, they also contain potassium. Potassium is a mineral that helps in the building of muscles and protein synthesis. This is done as potassium stimulates nerve impulses for muscle contraction.
• A diet rich in potassium is said to reduce the risk of hypertension and stroke. As bananas are free from sodium and very rich in potassium, they can be included in the diet to reduce the risk of high blood pressure.
• Bananas contain three natural sugars, sucrose, fructose and glucose along with fiber. A banana thus gives an instant and substantial boost of energy.
• A banana contains Vitamin B6, which helps in the synthesis of antibodies in the immune system apart from red blood formation, protein metabolism and functioning of the central nervous system.
• No other fruit contain more digestible carbohydrates than bananas. This is advantageous because, the body burns off calories from carbohydrate more easily and quickly than calories from fat or protein.
• 
  
  Interesting Facts About Bananas
  • The word banana is derived from the Arab word "banan," which means finger.
  • Bananas are harvested green because they keep ripening even after they are picked.
  • Unlike most other fruits that grow on trees, bananas grow on plants.
  • An average American is said to consume more than 28 pounds of bananas every year.
  • Brisbane holds the world record for the longest banana split, which measured 7.3 kilometers.
  • 3 medium bananas would weigh about a pound.
  • Despite that fact that bananas love a tropical climate, they are grown in Iceland too, by heating the soil with geysers.
  source 

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What the “ZIP” in “ZIP Code” Stands For & What Numbers Signify

Today I found out what the “ZIP” in “ZIP Code” stands for and what the numbers signify.

ZIP Code or “Zone Improvement Plan Code” was a system put in place by the U.S. Postal Service on July 1, 1963.  The hope was that these ZIP codes would allow the postal service to more efficiently and therefore more quickly route mail.

Before the official nation-wide ZIP code system, the U.S. Postal Service had a system of postal zones for large cities as far back as 1943.  This postal zone number would be added to the address after the city name, but before the state name. (e.g. Bilbo Baggins, 3421 Bagend, Hobbiton 27, Eriador; where “27″ is the postal zone within the city of Hobbiton)  This allowed for more efficient sorting of mail and, thus, quicker deliver times in high volume areas.                          

                                                                                                  Mr. ZIP: Official Mascot of the ZIP Code System

In 1944, post office employee, Robert Moon, submitted a proposal for a nation-wide postal zone system.  In Moon’s system, which was eventually slightly modified and then adopted, the first three digits would stand for the sectional center facility (SFC); an SFC is just a central mail processing facility in a certain region.  Specifically, the first digit ends up standing for a group of U.S. states (0-9 numbered from east to west, ascending) with the second and third digits representing a region in that group that is covered by some SFC.  The Postal System then added on to Moon’s system two extra numbers which indicate the post office or postal zone, within the region, the mail should go to.

Starting around 1983, the U.S. Postal service introduced the ZIP+4 system.  In this system, the 5 digit ZIP code number signifies the same thing as before and the extra 4 digits at the end signify an area within a certain post office’s coverage area.  Specifically, the six and seventh digits indicate a “delivery sector”, such as a group of streets; a group of office buildings; etc.  The last two numbers then indicate a “delivery segment” which could indicate a floor of an office building; the side of the street the address is on; etc.   This allows for more efficient sorting within a single post office that deals in high volumes of mail.

The new ZIP+4 system never really caught on with the general public and is somewhat superfluous as mail today is read by a multi-line optical character reader (MLOCR) that can almost always determine the correct ZIP+4 code for an address.  This machine also sprays a Postnet barcode on the face of the mail that corresponds to the full ZIP+4 code; thus, writing it in by hand before you mail something is generally no more efficient than not writing it in, because the automatic sorting systems the Postal Service has use this Postnet barcode, rather than the specific written address for sorting.

Bonus Factoids:

• Once the ZIP code system was put in place, the U.S. Postal Service only required that bulk mailers use the ZIP codes, though they wanted everyone to use them.  The Postal Service struggled, in the beginning, to get the general public to start using the zip codes.  They eventually more or less decided to give up on convincing adults and instead they created a cartoon character “Mr. ZIP” in order to try to get kids to start using ZIP codes.  They figured that the kids would then encourage parents to use the ZIP codes when they saw their parents leaving the ZIP codes out on mail.  Further, when the kids grew older, they would teach their kids to use ZIP codes.
• Mr. ZIP was based on a design by Howard Wilcox, who was the son of a letter carrier.  This was a design done for a New York bank that was a child-like sketch of a postman delivering a letter.  After AT&T acquired the rights to the design, they made it available to the Postal Service to use at no cost.  The Postal Service then made a few minor modifications and Mr. ZIP was born.
• The term “ZIP code” was originally registered as a servicemark, which is a type of trademark, by the U.S. Postal Service, but the registration has since expired allowing companies like UPS and FedEx to use the term freely.
• You can actually print the Postnet barcode directly onto your mail piece to make it slightly easier for the Postal Service to sort your mail (mainly skipping the step where they have to scan your mail and print the barcode on it).  Many word-processing programs, such as Microsoft Word, include a feature for doing this.
• Before the 1970s, the United States Postal Service (USPS) was named the United States Post Office Department (USPOD).
• Interestingly, the ZIP code system was first introduced because the Postal Service was beginning to be overwhelmed with the volume of mail they needed to process in a timely manner, most of which originally was processed by hand.  The ZIP code system made a handy way to increase efficiency in that way.  However, only a few years after the ZIP code system was introduced in the 1960s, the Postal Service began using the MLOCR system for automatic sorting.  Given the address, even without the ZIP code, the MLOCR system is almost always perfectly capable of assigning the ZIP+4 code to the address, with very little mail needing to be human-read to determine the correct address/ZIP code.  So in most cases, including the ZIP or ZIP+4 code with the written address doesn’t really increase mail efficiency much at all as the Postal Service’s initial scanning system can come up with those numbers for your written address on its own.

What the “ZIP” in “ZIP Code” Stands For and What the Numbers Signify

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Wikileaks : About and History

Wikileaks : About and History

Wikileaks is an international new media non-profit organisation that publishes submissions of private, secret, and classified media from anonymous news sources and news leaks. Its website, launched in 2006, is run by The Sunshine Press. Within a year of its launch, the site claimed its database had grown to more than 1.2 million documents.  The organisation has described itself as having been founded by Chinese dissidents, as well as journalists, mathematicians, and start-up company technologists from the United States, Taiwan, Europe, Australia, and South Africa.  Julian Assange, an Australian Internet activist, is generally described as its director.

Wikileaks has received praise as well as criticism. The organization won a number of awards, including The Economist's 2008 New Media Award. In June 2009, Wikileaks and Julian Assange won Amnesty International's UK Media Award, in the category "New Media", for the 2008 publication of "Kenya: The Cry of Blood – Extra Judicial Killings and Disappearances",  a report by the Kenya National Commission on Human Rights about police killings in Kenya.  In May 2010, New York City's Daily News listed Wikileaks as first in a ranking of "websites that could totally change the news".  Julian Assange was named the Readers' Choice for TIME's Person of the Year for 2010.  Several U.S. government officials have criticized Wikileaks for exposing state secrets, harming national security, and compromising international diplomacy.  Human rights organizations such as Amnesty International criticized Wikileaks for not adequately redacting the names of civilians working with the U.S. military.  Some journalists have criticized the lack of editorial discretion when releasing thousands of documents at once and without sufficient analysis.  Negative public reactions in the United States have characterized the organization as irresponsible, immoral, and illegal.

In April 2010, Wikileaks posted video from a 2007 incident in which Iraqi civilians and journalists were killed by US forces, on a website called Collateral Murder. In July of the same year, Wikileaks released Afghan War Diary, a compilation of more than 76,900 documents about the War in Afghanistan not previously available for public review.  In October 2010, the group released a package of almost 400,000 documents called the Iraq War Logs in coordination with major commercial media organisations. In November 2010, Wikileaks began releasing U.S. State department diplomatic cables.

Wikileaks was originally launched as a user-editable wiki site, but has progressively moved towards a more traditional publication model, and no longer accepts either user comments or edits. The site is available on multiple servers and different domain names following a number of denial-of-service attacks and its severance from different Domain Name System (DNS) providers.

History

The Wikileaks .org domain name was registered on 4 October 2006.  The website was unveiled, and published its first document in December 2006. The site claims to have been "founded by Chinese dissidents, journalists, mathematicians and start-up company technologists, from the US, Taiwan, Europe, Australia and South Africa".

The creators of Wikileaks have not been formally identified.  It has been represented in public since January 2007 by Julian Assange and others. Assange describes himself as a member of Wikileaks ' advisory board.  News reports in The Australian have called Assange the "founder of Wikileaks ". According to Wired magazine, a volunteer said that Assange described himself in a private conversation as "the heart and soul of this organisation, its founder, philosopher, spokesperson, original coder, organiser, financier, and all the rest".  As of June 2009[update], the site had over 1,200 registered volunteers  and listed an advisory board comprising Assange, Phillip Adams, Wang Dan, C. J. Hinke, Ben Laurie, Tashi Namgyal Khamsitsang, Xiao Qiang, Chico Whitaker and Wang Youcai.  Despite appearing on the list, when contacted by Mother Jones magazine in 2010, Khamsitsang said that while he received an e-mail from Wikileaks , he had never agreed to be an advisor.

Wikileaks states that its "primary interest is in exposing oppressive regimes in Asia, the former Soviet bloc, Sub-Saharan Africa and the Middle East, but we also expect to be of assistance to people of all regions who wish to reveal unethical behaviour in their governments and corporations."

In January 2007, the website stated that it had over 1.2 million leaked documents that it was preparing to publish.  An article in The New Yorker said:

One of the Wikileaks activists owned a server that was being used as a node for the Tor network. Millions of secret transmissions passed through it. The activist noticed that hackers from China were using the network to gather foreign governments’ information, and began to record this traffic. Only a small fraction has ever been posted on Wikileaks , but the initial tranche served as the site’s foundation, and Assange was able to say, "[w]e have received over one million documents from thirteen countries."

Assange responded to the suggestion that eavesdropping on Chinese hackers played a crucial part in the early days of Wikileaks by saying "the imputation is incorrect. The facts concern a 2006 investigation into Chinese espionage one of our contacts were involved in. Somewhere between none and handful of those documents were ever released on Wikileaks . Non-government targets of the Chinese espionage, such as Tibetan associations were informed (by us)". The group has subsequently released a number of other significant documents which have become front-page news items, ranging from documentation of equipment expenditures and holdings in the Afghanistan war to corruption in Kenya.

The organisation's stated goal is to ensure that whistleblowers and journalists are not jailed for emailing sensitive or classified documents, as happened to Chinese journalist Shi Tao, who was sentenced to 10 years in 2005 after publicising an email from Chinese officials about the anniversary of the Tiananmen Square massacre.

The project has drawn comparisons to Daniel Ellsberg's leaking of the Pentagon Papers in 1971. In the United States, the leaking of some documents may be legally protected. The U.S. Supreme Court has ruled that the Constitution guarantees anonymity, at least in the area of political discourse.  Author and journalist Whitley Strieber has spoken about the benefits of the Wikileaks project, noting that "Leaking a government document can mean jail, but jail sentences for this can be fairly short. However, there are many places where it means long incarceration or even death, such as China and parts of Africa and the Middle East."

On 24 December 2009, Wikileaks announced that it was experiencing a shortage of funds  and suspended all access to its website except for a form to submit new material. Material that was previously published was no longer available, although some could still be accessed on unofficial mirrors. Wikileaks stated on its website that it would resume full operation once the operational costs were covered.  Wikileaks saw this as a kind of strike "to ensure that everyone who is involved stops normal work and actually spends time raising revenue".  While the organisation initially planned for funds to be secured by 6 January 2010,  it was not until 3 February 2010 that Wikileaks announced that its minimum fundraising goal had been achieved.

On 22 January 2010, PayPal suspended Wikileaks ' donation account and froze its assets. Wikileaks said that this had happened before, and was done for "no obvious reason".  The account was restored on 25 January 2010.  On 18 May 2010, Wikileaks announced that its website and archive were back up.

As of June 2010, Wikileaks was a finalist for a grant of more than half a million dollars from the John S. and James L. Knight Foundation, but did not make the cut.  Wikileaks commented, "Wikileaks was highest rated project in the Knight challenge, strongly recommended to the board but gets no funding. Go figure”. Wikileaks said that the Knight foundation announced the award to "'12 Grantees who will impact future of news' – but not Wikileaks " and questioned whether Knight foundation was "really looking for impact".  A spokesman of the Knight Foundation disputed parts of Wikileaks ' statement, saying "Wikileaks was not recommended by Knight staff to the board." However, he declined to say whether Wikileaks was the project rated highest by the Knight advisory panel, which consists of non-staffers, among them journalist Jennifer 8. Lee, who has done PR work for Wikileaks with the press and on social networking sites.

On 17 July, Jacob Appelbaum spoke on behalf of Wikileaks at the 2010 Hackers on Planet Earth conference in New York City, replacing Assange because of the presence of federal agents at the conference. He announced that the Wikileaks submission system was again up and running, after it had been temporarily suspended. Assange was a surprise speaker at a TED conference on 19 July 2010 in Oxford, and confirmed that the site had begun accepting submissions again.

Upon returning to the US from the Netherlands, on 29 July, Appelbaum was detained for three hours at the airport by US agents, according to anonymous sources. The sources told Cnet that Appelbaum's bag was searched, receipts from his bag were photocopied, his laptop was inspected, although in what manner was unclear. Appelbaum reportedly refused to answer questions without a lawyer present, and was not allowed to make a phone call. His three mobile phones were reportedly taken and not returned. On 31 July, he spoke at a Defcon conference and mentioned his phone being "seized". After speaking, he was approached by two FBI agents and questioned.

Assange is quoted as acknowledging that his practice of posting largely unfiltered classified information online could one day lead the Web site to have "blood on our hands."

In 2010, at least a dozen key supporters of Wikileaks have left the website.

source: wikipedia

Did you like Wikileaks : About and History????

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Five Unlucky People Who Were Killed By Their Inventions

This is an interesting story, courtesy of Gizmodo: How many people do you know of who were killed by their own inventions? Check out these five unusual stories.

It happens… maybe infrequently, but it does happen. Below, check out five examples of inventors who might have prolonged their lives if they had never dreamed up their creations.

Bad Blood

Alexander Aleksandrovich Bogdanov was a Russian Renaissance Man – his interests included physics, philosophy, economics, science fiction, the universal systems theory and, his downfall – the possibilty of human rejuvenation through blood transfusion. Bogdanov was interested in the theory that a blood transfusion could possibly hold the secret to eternal youth, or at least slow the aging process. He actually performed a blood transfusion on Vladimir Lenin’s sister, Maria Ulianova. He tried 11 of these procedures on himself, with one of his friends remarking that Bogdanov appeared to be 10 years younger.

In 1928, he completed a blood transfusion on himself that ended up resulting in his death. The transfer was from a student who had malaria and tuberculosis. Some suspect that the death was, in fact, a suicide – Bogdanov wrote a very “nervous” political letter shortly before his death.

The Printing Press – Literally

William Bullock is the man responsible for the 1863 invention of the web rotary printing press. It completely changed the printing industry because of how quickly it could produce.

This was one of his many inventions – others included a roof shingle cutter, a cotton and hay press, a seed planter, a lathe cutting machine and a grain drill (which won him a prize from the Franklin Institute).

He perfected his web rotary press in 1860. Although a rotary press was already in operation, Bullock’s allowed continuous large rolls of paper to be used, eliminated the need to hand-feed paper through. The press could print up to 30,000 sheets an hour.

In 1867, though, the machine turned against Bullock. He was adjusting a new press that had been installed for the Philadelphia Public Ledger newspaper and tried to kick a driving belt onto a pulley. His leg got caught into the machine and was completely crushed. He died a little more than a week later during an operation to amputate his leg.

The First Aviation Accident (Maybe!)

Before the Wright Brothers, there was Otto Lilienthal. Known as the “Glider King”, he was the first person to make successful gliding flights more than once. Publications ran pictures of his successes, which helped to make the idea of inventing a “flying machine” more plausible to the public.

After many years of successes, failure finally caught up with him. On August 9, 1896, he fell from a height of 56 feet and broke his spine. He died the next day, but said “Kleine Opfer müssen gebracht werden!” (“Small sacrifices must be made!”).

The Wright Brothers credited him with as their inspiration for pursuing flight. “Of all the men who attacked the flying problem in the 19th century,” Wilbur Wright said, “Otto Lilienthal was easily the most important.”

Toxic substances couldn’t kill him…

Thomas Midgley, Jr. held more 100 patents, had a degree in mechanical engineering from Cornell and worked for a subsidiary of General Motors. He discovered that adding tetra-ethyl lead to gasoline prevented internal combustion engines from “knocking”. However, this also released huge amounts of lead into the atmosphere, causing health problems and massive pollution. After people at the GM plants started hallucinating and dying of lead poisoning, though, Midgley was assigned to develop a non-toxic refrigerant for household appliance. So, he discovered dichlorodifluoromethane (please don’t ask me to pronounce that), AKA Freon. Turns out that Freon is a chlorinated fluorocarbon, which is insanely bad for the ozone layer. This guy just couldn’t win!

Midgely wouldn’t live much longer to discover other toxic substances, though – in 1940, he developed polio. The disease left him extremely disabled, but, being the inventor that he was, he developed a system of pulleys and ropes to lift him out of bed. It was this invention – and not the hazardous exposure to lead and CFCs – that killed him. In 1944, he got tangled up in the ropes of his contraption and strangled to death.

The Brave Little Tailor

Franz Reichelt was a tailor who was convinced that the next big thing was a coat that doubled as a parachute. So he got busy sewing and developed just that. To test the coat/parachute (coatachute? Paracoat?), Reichelt climbed up to the first deck of the Eiffel Tower. He told authorities that he was going to use a dummy to test the invention, but at the last minute he strapped himself in and jumped to his death in front of a large crowd of spectators. If you YouTube his name, you’ll find video of the entire event. Since this is a family blog, I wasn’t sure that I should link to a man plummeting 60 meters to the cement below.…

And One Man Who Didn’t Die From his Invention

Apparently there’s a long-standing story that Dr. Joseph-Ignace Guillotin died at the “hand” of his namesake invention, the Bowie Knife. I’m just kidding. He helped conceive of the guillotine, obviously. He suggested the beheading machine as a way to humanely execute criminals. Guillotine was actually against the death penalty and hoped that his invention would be a step toward more humanity, which would eventually abolish the death penalty altogether. At the time, people who couldn’t afford to pay for a quick death were decapitated, but it often took quite a few blows and the axe or sword was usually rather dull. Although Guillotin was arrested and imprisoned in the late 1700s, he was not executed. He was freed and died of natural causes in 1814.

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World top ten expensive houses

1. Antilla

The most expensive house in the world is in India, owned by Mukesh Ambani. It is worth a whopping 1 billion dollars and has 27 floors. The house has a plush health club and a garage that can hold over 150 cars. Why? Just because this business tycoon has a personal collection of 168 cars. The house is made entirely of glass and is 570 feet tall.

2. William Randolph Hearst’s Mansion

This house was initially owned by William Randolph Hearst and has three swimming pools, 29 bedrooms as well as a state of the art movie theater and discotheque. The mansion was put up for sale since 2007 and taken off a year later when nobody showed any interest in it.  It is worth 165 million dollars and stretches across 6 acres of land.

3. Elena Franchuk’s Victorian Villa

This house is located in the Kensington district in London was bought recently for about 161 million dollars. This 5-storey house has a 10 bedroom villa, an indoor swimming pool, a panic room, move theater and a sauna plus gym.

4. The Penthouses at One Hyde Park

This house was still under construction the last time we checked. When it is completed, it will be the second most expensive house in the world with a net worth of 160 million dollars. It will be nestled within a skyscraper in London called One Hyde Park.

5. Aaron Spelling’s Manor

This mansion stands on land that stretches across 56,000 square feet of land. The net worth has been estimated at 150 million dollars and was built in 1991. It has 123 bedrooms, a tennis court, a skating rink, a bowling alley and several swimming pools.

6. Hala Ranch

 

Owned by Prince Bandar bin Sultan bin Abdulaziz of Saudi Arabia, this ranch will be found in Colo. It has 27 bathrooms and 15 bedrooms along with an indoor pool, private ski trails, sewage treatment plants, a tennis court, heated stables and a gas station. This 135 million dollar ranch stretches across 14,397 square feet.

7. Dracula’s Castle

This castle was made into a museum during the 1980s and a few year back, Archduke Dominic who is the owner of the house put up the castle for sale for a net worth of 80 million dollars. However, this offer was not accepted and 2 years later, he put up the house for sale again. This time for a price that was not disclosed. Nobody has bought it yet. It has 57 rooms, 17 bedrooms and beautiful antique furniture.

8. Fleur de Lys

worth over 125 million and built by Suzanne and David Saperstein, this house was put up for sale in 2007. The house has 15 bedrooms and the exterior is covered with French limestone while the interior is splashed with 24 karat gold. The house also has furniture items like Marie Antoinette’s curtain patterns and Napoleon’s favorite chair.

9. Maison de l’Amitie

Owned by Donald Trump, this house is in Palm Beach. It stretches across 80,000 square feet of land and holds a conservatory, a ballroom, 15 bedrooms, 8 half-baths, a tennis house and a luxurious guest cottage. The gigantic pool is only a minor part of this 125 million dollar mansion.

10. Updown Court

This house is located in England, just outside London and is reportedly larger than the Buckingham Palace. It has 103 rooms, a bowling alley, a large movie theater, over 3 swimming pools and a squash court. It is worth 116 million dollars and the best part is that the driveway is heated too!

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The Economy crisis and its effects!

The Economy crisis and its effects!

The current economic crisis has broken the temporary solutions which have ruled the world economy since the mid-1980s. Profits had been created through production but, in contradiction, were realised through circulation and exchange. British is now exceptionally vulnerable to the crisis.

1. Introduction

Andy Kilmister

There are three important starting points for understanding the current economic crisis . Firstly, what is happening at the moment represents the break-up of the interlocking set of arrangements by which the world economy has been governed since the mid-1980s. These arrangements represented a temporary `solution’ for capital to the crises which emerged a decade earlier. Secondly, the crises of the 1970s and the attempts to resolve them of the 1980s arose from a central contradiction within capitalism between the creation of profits in the sphere of production and the realisation of those profits in the sphere of circulation and exchange. Thirdly, the historically weak situation of British capital, at least that section of British capital territorially located in Britain, has left Britain especially vulnerable to the crisis.

The crisis itself has a number of dimensions but three in particular are crucial. The first is the build-up of debt, both corporate and household debt, but especially household debt. Linked with this is the likelihood of a return to international monetary instability and of the refusal of the rest of the world to fund US (and UK) trade deficits. The third factor is the effect of the ecological crisis on the world economy, which brings with it the prospect of an end to two decades of low commodity prices. However, these should be seen as medium-term developments, determining the underlying tensions within which more immediate changes take place.

A Marxist analysis of the crisis needs to be based on an analysis which can both grasp these underlying structural factors, see how these play themselves out in surface phenomena and also understand the competing strategies of capital as it attempts to manage the crisis.

2. The Recent Financial Turmoil

The key development of the second half of 2008 has been a dramatic worsening of the first of the dimensions mentioned above; the financial crisis based on the accumulation of debt. The main cause of this has been growing recognition that the quantity of bad debt in the system was much larger than was previously thought. This in turn led to confusion amongst the US ruling class about the way to respond to the rising number of loan defaults. Unwillingly forced to nationalise the mortgage companies Fannie Mae and Freddie Mac (largely as a result of pressure from Chinese and Japanese investors in these companies) they then switched abruptly to allowing a leading investment bank, Lehman Brothers, to fold.

This threw the banking system into a deeper crisis in three ways. First, the rising tide of bad debt threatened the solvency of the banks. Second, the apparent change in Federal Reserve policy from the earlier rescue of Bear Sterns created a panic in the inter-bank lending market. Uncertain of which banks would survive banks ceased to lend to anyone at all in this market causing the system as a whole to seize up. Thirdly, stock market investors also panicked sending bank shares into freefall. Since bank regulation is based on the idea that loans can only be a certain multiple of bank capital and since the decline in shares reduced capital significantly, this looked likely to lead to a massive decline in bank lending, which would have further threatened the stability of the system. While these problems were first apparent in the US and UK, where housing booms and bank deregulation had been especially strong, it quickly became clear that banks from many countries, particularly Continental Europe, had also made loans in these markets so that the banking crisis affected the major industrialised countries as a whole.

The result of this has been an abrupt change in policy towards bailing-out the banks. The form of this has varied across countries. The US response, led by Treasury Secretary Henry Paulson, who is rooted in Wall Street, has been particularly shameless (the original proposal by Paulson was simply that the US government, funded by taxpayers, would buy up the worthless debt from the banks – a straightforward subsidy with no control over future bank behaviour whatsoever). The UK government plan, which has effectively been adopted by the EU, provides some potential leverage for political debate in that it involves buying shares in the banks. This allows for discussion about the nature of state control over the banking system and about who should pay for the crisis. But it is clear that the initial aim of the government was to have the minimum amount of state involvement in the financial sector and to provide funds which would then be used to restore the banks to profitability in the hope of a quick sale of the governments’ stake. The model was the Scandinavian restructuring of the banks following the financial crisis there in the early 1990s.

3. Who Pays for the Crisis?

The starting point for Marxists in understanding these developments must be in terms of the devalorisation of capital. The immediate effect of the recognition of the bad debt in the housing market is that a large amount of capital which was valued at a certain amount, on the basis that the housing loans would be repaid in full, is no longer worth what was originally envisaged. This capital falls into two categories. Firstly, there is the capital directly tied up in providing housing linked to sub-prime mortgages, both the loan capital used to provide the mortgages and capital employed in construction and housing development. Secondly, there is the capital in other industries which has been invested in the expectation of demand originating from a booming housing market; in particular that which depends on high levels of demand resulting from homeowners borrowing against the equity in their houses – something now unlikely to happen in the foreseeable future.

Any devalorisation of capital of this kind raises the question of who will pay for the loss – capital or labour. The financial sector has been quite brazen about trying to shift the cost of the crisis onto labour – even to the extent of formulating plans to use taxpayers’ money to maintain bonus payments. The mechanisms for ensuring this shift include the following:

* Direct subsidies for the banks funded by the taxpayer

* Rebuilding of the profit base by refusing to pass on interest rate cuts to borrowers. This may well be made easier by mergers like the Lloyds-HBOS merger, which will reduce competition and increase the dependence of households on a small number of large institutions

* An attack on the job security, wages and conditions of bank staff in order to cut costs. Again, state-sponsored mergers may help this process by providing the means to close branches.

* Reduction of the interest rate paid out to savers and depositors

To the extent that the state has attempted to act as something other than an agent of capital and to enforce terms on the banks, the banks have responded by threatening to bring the system down if they don’t get their way. This has led to some conflict between the government and the banks, particularly with regard to the enforcement of cuts in interest rates. However, the cuts which have been achieved here have come at the expense of even larger cuts in rates paid to savers which have serious implications for both current and future pensioners. In addition, the bail-out as a whole has resulted in a considerable ideological cost both in terms of the reputation of the financial sector within society as a whole (which is probably now at an all time low) and in terms of the increased legitimacy of regulation and even state ownership.

4. Stabilising the Financial Sector

While it is difficult to predict events with any certainty, it appears most likely at present that the injections of funds made so far have restored a measure of stability to the banking system. While the housing boom in the US and a number of European countries was a significant speculative bubble, it did not represent sufficient lending in itself to bring down the financial systems of the industrialised world (The Economist of September 27 2008 reports a June Federal Deposit Insurance Corporation estimate of about $500 billion worth of `seriously delinquent’ residential mortgages in the US out of a total of $10.6 trillion). It should also be remembered that even if mortgages are not repaid in full the houses on which they were secured are not entirely worthless.

In assessing the cost of this stabilisation we should be cautious about the headline figures such as the $700 billion attached to the US bail-out. The bail outs comprise three different kinds of spending. First, there is direct financial assistance to the banks. This is a real cost. Second, there are loan guarantees. These will only become a real cost if the loans that are made from now on result in defaults. Basically they are confidence building measures and it is not expected that they will require much if any actual spending. Thirdly, there is direct government lending to get the money markets flowing again. Again this will only be a real cost if the interest rates at which the lending takes place are unrealistically low or if the loans made result in default.

The real cost of the UK bank bail-out at present appears to be around £37 billion; i.e. the actual financial assistance being given to the banks. Even this will not necessarily be a long-term cost if the stake taken in the banks can be resold at a higher price at a later date. Nonetheless, it is a significant amount of money and will lead to a record government budget deficit this year. The sums involved in other European countries appear rather similar – for example the Financial Times of 5 November reports that Italy is planning to allocate £24 billion to recapitalise its banks.

Here it is also important to recognise that the immediate impact of this government spending is only a small part of the projected increases in budget deficits in the medium term. More important is the loss of tax revenue and the extra expenditure resulting from the slowdown in growth arising from the crisis. Analysing Alistair Darling’s pre-budget statement in the Financial Times, Martin Wolf points out that tax receipts are now expected to fall by 3 percentage points of GDP in 2009-10 and observes that `these changes are overwhelmingly due to revisions in the fiscal capacity and level of GDP; a permanent reduction in taxes on financial sector profits and housing transactions; and, more strikingly, a lasting loss of GDP. In 2010, the economy is now expected to be some 5.5 percent smaller than forecast in the budget’. This raises serious questions about the ability of governments such as the British government to fund their increased deficits by issuing bonds without either a sharp fall in bond prices which will raise interest rates and worsen the crisis or an increase in public borrowing from abroad which will further weaken the value of the pound.

What is more even important though than the immediate possibility of financial meltdown and the impact of the rescue of the banks on government spending is the longer-term impact of the financial crisis both on the financial sector and on the economic situation more generally.

The banking crisis has also raised the issue of the kind of financial system which will emerge if and when the initial stabilisation has been achieved. It is very difficult for New Labour to avoid this debate now because by taking stakes in the banks they have inescapably raised the issue of how these stakes will be used to enforce control over the financiers. However, while this would seem to be a golden opportunity for social democracy to reassert ideas about regulation of the system the ideological hegemony of neo-liberalism over the last two decades has left it unable to articulate any very convincing vision of an alternative. The main ideas about regulating banks currently being discussed include strengthening the capital requirements for making loans (basically a stronger version of what already exists), regulating bank bonuses and banning certain kinds of market transaction (such as `short-selling’ where traders sell shares they do not actually own in the expectation that they can buy them up more cheaply before completing the transaction). None of these will lead to any significant differences between the financial system which emerges from the current turmoil and what we have seen in recent years.

However, if social democracy is unable to put forward a convincing alternative to neo-liberal financial deregulation that provides an opportunity for socialists to enter the debate. A space is opening up both for defence of public ownership and for arguments based on need rather than profit in a way which has not been the case for many years.

5. Recession and the Financial Crisis

The most important current development in the wake of the banking crisis is the transmission of that crisis to the rest of the economy and its interaction with the more general economic crisis now emerging. The most obvious issue here is the onset of recession. The central reason for the recession is the dependence of consumer demand in particular but also business investment on high levels of debt over the last two decades. Now that lending is contracting this debt-fuelled expansion is no longer possible and a sharp economic slowdown looks inevitable. The fall in house prices is also worsening the slowdown in consumer spending as households can no longer borrow against rising equity values.

There are two fundamental reasons for the reliance on debt. Consumption has come to depend on debt because of the contradiction between driving wages down to generate profits in production and needing to ensure demand in order to sell the goods produced and realise these profits. The most obvious manifestation of this is growing income inequality and it is no accident that the build-up of debt has been worst in countries with the greatest disparity in incomes, notably the UK and USA.

Linked to this is the way in which production in general, but especially investment, has come to rely on debt as a result of the weakness of profitability in the productive sector. As Robert Wade puts it `the rate of profit of non-financial corporations fell steeply between 1950-73 and 2000-06 – in the US, by roughly a quarter. In response firms `invested’ increasingly in financial speculation’. Consequently, without debt being available to fund expansion recession appears inevitable.

The response of governments to the recession has been firstly to increase their own borrowing and secondly to encourage central banks to cut interest rates. But both of these create their own problems. Government borrowing is limited by the cost of the bank bail-outs. High levels of borrowing can also push up interest rates or reduce currency values as discussed above. Both of these effects lower household real incomes and decrease spending frustrating the original purpose of the borrowing. The strategy adopted by the British government in response to this is to make tax cuts explicitly temporary. But this risks making them ineffective since households will simply save any extra income in anticipation of future tax rises.

Cutting interest rates is also difficult. Central banks only directly control short-term interest rates and private banks have simply refused to cut long-term rates in response to central bank policies. Cuts in interest rates also have the effect of lowering both the actual returns of current pensioners living off savings and the prospective returns of future pensioners both of which may lower consumption.

More fundamentally, the room for government policy to boost the economy is limited so long as spending depends on debt because of low wages and inequality and so long as new debt is not forthcoming. Consequently, the slowdown is likely to be protracted and severe.

6. The Internationalisation of the Crisis

The growth of debt over the last two decades in countries like the USA and UK has been dependent on international flows of capital which in turn have resulted from a significant degree of exchange rate stability compared to the turbulence of the early 1980s. Conversely, a move towards a different pattern of accumulation will inevitably put great strain on global monetary arrangements.

So far the crisis has mainly manifested itself in domestic monetary developments in the largest economies, although countries like Iceland, Ukraine, Hungary and the Baltic States have been driven to seek IMF or EU help. But this is now changing and the crisis is being internationalised in three ways.

The first of these is the effect of current developments on so-called `emerging market economies’. Nobel Prize winning economist Paul Krugman gives the example of Russia where `while the Russian government was accumulating an impressive $560bn hoard of foreign exchange, Russian corporations and banks were running up an almost equally impressive $460bn foreign debt...This truly is the mother of all currency crises and it represents a fresh disaster for the world’s financial system’. The unwinding of the `carry trade’ (where financiers borrow in markets with low interest rates such as Japan and lend abroad) is beginning to have a devastating effect on such currencies.

Secondly, countries like the UK and USA which have been at the centre of the crisis see their currencies in danger of sliding, both because their governments need to borrow abroad and because of a general lack of confidence. At the time of writing the dollar remains relatively strong simply because of the weakness of other currencies, but sterling has fallen dramatically against both the dollar and the euro.

The third factor is increasing pressure on countries to devalue their currencies in order to boost exports at a time of falling demand. Even the Chinese government is now considering this to American consternation.

All of these developments are likely to herald a period of much greater turbulence for exchange rates and capital flows. Yet underlying the immediate changes in currency values is a deeper disagreement about future strategies amongst the international capitalist class.

The central long-run task for capital is to develop a strategy of accumulation which does not depend on the build-up of unsustainable debt (Martin Wolf’s article in the Financial Times of November 5 entitled `Why agreeing a new Bretton Woods is vital and so hard’ is in many ways a manifesto for this process). This process involves a wide range of different potential conflicts but one issue in particular is seen as increasingly central. This is the rebalancing of world economic growth away from the USA (and UK) towards the surplus economies of Asia and elsewhere, especially China.

The more far-seeing representatives of capital, such as Wolf, are very clear that if the current pattern of global imbalances persists, so will recurrent financial crises of the kind we have seen recently. Large flows of funds into the US and UK will result in risky lending whatever the regulatory structures created. The only way this can be avoided is through a shift towards domestic consumption in countries like China and a move away from consumption towards investment and, especially, exports in the US.

This kind of strategy is extremely difficult to implement in practice because the unplanned, spontaneous nature of capitalism makes this kind of rebalancing very destabilising and risky. This was shown in the mid-1980s when the decision to co-ordinate a rise in the value of the yen and shift the Japanese economy towards domestic demand and away from exports triggered a speculative frenzy of lending resulting in a slump lasting almost two decades.

Yet, an even more serious problem today is that there is no clear agreement on the way forward between the representatives of different national capitals. That has been shown within Europe with regard to the arguments between the German and British governments over the degree to which government spending and fiscal deficits are an appropriate response to the crisis. More serious, however, are the underlying tensions between the US and Asian governments. These tensions reflect not just economic concerns, but also shifts in the balance of power within international capitalism.

7. Commodities and the Ecological Crisis

The third aspect of the crisis of capitalism raised at the outset of this article is the question of commodity prices and the constraints on production arising from ecological factors. There is a strong temptation at present to downplay this issue as oil prices in particular fall. There are four reasons why this would be a serious mistake.

Firstly, oil prices remain at high levels compared to five or ten years ago, as do food prices in much of the world. Even in countries like Britain rising energy costs are seriously affecting working class living standards while for the poor in developing economies food costs are still devastating.

Secondly, to the extent that energy and food prices have declined it has only been because of the severity of the recession. Any sustained upturn in growth that does take place, in particular one based on a shift towards domestic consumption in countries like China, is likely to lead to renewed price rises. Here it is important not to assume that all the commodity price inflation of 2006 and 2007 was due to speculation. This did play a role, especially as speculators moved away from the dollar during this period, but it was by no means the only factor. The price rises of those years also indicated a genuine constraint on global capitalist growth arising from ecological limits.

Thirdly, given the irrationalities of capitalist decision-making any sharp decline in commodity and fuel prices which does take place over the next few years is likely to stop the development of new sources of supply and worsen the price rises that will occur if growth restarts.

Fourthly, the current recession is not slowing down the process of international environmental degradation, especially climate change. The impact of this on food supplies in particular represents a long-run trend which will assert itself increasingly sharply in future years whatever the level of global output.

All this means that, while at present governments and central banks are not worrying about inflation when trying desperately to restart production, any sustained recovery from the crisis is likely to reawaken inflationary fears. This will constitute a severe constraint on the economic options available to them in the longer term.

8. An end to Neo-Liberalism?

An important question here is that of the extent to which the current crisis represents an end to the political hegemony of neo-liberalism. Linked to this is the issue of the revival of Keynesianism. Here it is important to recognise that state expenditure is by no means incompatible with neo-liberalism provided such expenditure is in the interests of capital. The initial aim of New Labour in rescuing the banks was very much within this framework, as discussed above.

However, this does not mean that the resolution of the crisis will remain within the bounds of neo-liberalism. A neo-liberal outcome in which the banks are restructured and re-privatised while accumulation is restarted on a free-market basis remains one possible outcome but by no means the only one. Already, in the UK the government has been driven to be more interventionist with regard to management of the banks than it had originally intended and to adopt fiscal policy measures which were also not planned even a few months ago. So, far such measures – pressuring interest rate reductions and raising income tax to 45 percent for higher earners – do not represent a significant break with past policies. But they do indicate a space for debate around political alternatives which is opening up. The way in which this space will be occupied will depend partly on how the crisis develops but also on the ability of socialists to articulate alternative responses to what is happening to that proposed by capital.

More generally, the way in which the crisis has thrown into question the way in which the world economy has functioned since the mid-1980s indicates that even if neo-liberalism is able temporarily to resolve the situation on its terms the way in which it will do this will differ significantly from what has been seen in recent years. It will also involve turbulent and difficult adjustments which in turn will open up further opportunities for socialists to present alternatives.

9. What should socialists demand?

In raising demands in response to the crisis it is important that socialists emphasise the nature of the crisis as a general crisis of capitalism, which has its roots in the contradictions of productive capital as much as in the financial sector and which is caused by global factors, not the economic policies followed by a particular national capital. In this context the following demands seem especially important:

* Nationalisation of the banks coupled with popular control over the allocation of credit and use of savings.

* A massive programme of public works to combat the recession with particular emphasis on ecological production and a shift in the economy towards `green’ technologies. Investment in alternative forms of transport and energy.

* Taxation of the income and wealth of the rich and limits on higher earnings to remove the reliance on debt to maintain consumption.

* Opening of the books of both the financial institutions and industrial companies to public scrutiny in order to prevent any use of the crisis as an excuse to force through cost-cutting and redundancies

* Indexation of wages, pensions and benefits to protect workers against rises in food and energy prices.

* An extensive programme of publicly-owned and financed house building to avoid another housing bubble. A moratorium on any re-possessions for mortgage arrears.

* A government guarantee for pensions. Future pensions to be paid for from taxation of the rich and not to be reliant on returns from shares and bonds. Current pensioners to be compensated for loss of income resulting from interest rate reductions.

* Control over international financial speculation both through controls on capital movements and through taxation.

10. Conclusion

The current crisis represents the most significant set of economic events internationally since the decade spanning the mid-1970s and the mid-1980s. The economic order created following that turbulent decade is now breaking down. What replaces it will depend not just on `objective’ circumstances but on the ability of the left to put forward its own vision of an economy based on need rather than profit as a replacement for the finance-driven accumulation of the last twenty years.

This is the opening chapter of a forthcoming book on the crisis being published by Socialist Resistance next month.

Andy Kilmister is Senior Lecturer in Economics at Oxford Brookes University, where he researches industrial restructuring and structural change in Central and Eastern Europe since 1989. Andy is a member of the International Socialist Group and of the editorial collective of the journal Labour Focus on Eastern Europe. He is co-author of ’Critical and Post-Critical Political Economy’.

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