New Articles as of February 4, 2010
Published on Wednesday, February 3, 2010 by Creators Syndicate
Republicans Out of Touch as Middle Class Sinks
by Creators Syndicate
by Jim Hightower
American politics is a hoot! Where else can raw ignorance rise to such high places — and then flaunt itself shamelessly for all to see?
For example, who needs Jay Leno or Conan O'Brien for comic relief, when we've got Andre Bauer? He's the Lieutenant governor of South Carolina (a state, by the way, that really is a comer on the political comedy circuit — especially after Gov. Mark Sanford's madcap schtick last year involving his disappearance, the Appalachian Trail and an Argentine mistress.
But Sanford is leaving office, and Bauer, who is now a Republican contender for governor, is the state's new star joker. He had 'em rolling in the aisles recently when he did a wild, slapstick routine on food stamps at a town hall meeting. Andre proclaimed that much of his political thinking was shaped by his grandmother and that he had learned a valuable lesson from her.
"She told me as a small child to quit feeding stray animals. You know why?" he asked, pausing for comedic effect. "Because they breed! You're facilitating the problem if you give an animal or a person ample food supply. They will reproduce."
I tell you, Andre Bauer is an absolute scream!
But here's the real punch line: The need for food stamps has been soaring as more and more Americans are falling out of the middle class into poverty. From 2000 to 2008, 5 million more were added to the poverty rolls, and that was before the economic collapse of the last two years. In fact, check this out Andre, and laugh if you feel like it: About 6 million Americans today are living entirely on food stamps — they've lost their jobs and have no other income. That's one out of every 50 of us, and their numbers are growing rapidly. Now, isn't that a hoot?
Well, one who's not laughing is Republican member of Congress John Linder. This far-out Georgia right-winger is irked that America's food stamp program will grow to more than $60 billion this year. "This is craziness," Linder barked to a New York Times reporter.
"We're at risk of creating an entire class, a subset of people, just comfortable getting by living off the government."
Comfortable? When was the last time this pampered lawmaker experienced the "comforts" of the food stamp life? Linder himself has been "living off the government" for 18 years, but at the high end — drawing $174,000 a year in pay, plus subsidized health care, a fat pension and generous perks of office.
Hypocrisy aside, Linder is an anti-government, laissez-faire extremist who buys into Bauer's fantasies about lazy, good-for-nothing strays getting food stamps.
"You don't improve the economy by paying people to sit around and not work," he grumps, adding, "You improve the economy by lowering taxes."
Really? Perhaps the gentleman from Georgia has forgotten that he and the whole Washington insider crowd tried that scam again and again throughout the past decade, slashing all sorts of taxes for corporations and the wealthy. Since Linder is a multimillionaire, that economic "plan" undoubtedly worked out splendidly for him.
For the middle class, however, the 10 years since January 2000 are known as "the lost decade." In that period, the U.S. economy lost more jobs than it created — zero job growth. That's the first decade since the end of the Depression that our country has had less than a 20 percent rise in job creation.
Also, after the 10-year frenzy of tax-cutting, middle-class families are earning less today, in real dollars, than they did in 1999. Add in skyrocketing health care costs and the plummeting value of people's homes, and we get the harsh reality of mushrooming poverty.
So that "subset of people" on food stamps whom Linder so callously denigrates are his own spawn! The food stamp program has had to grow because the tinkle-down economy that he pushed has wrecked America's middle class.
Does knocking poor people make these guys feel better about themselves? How pathetic. Bauer and Linder are living proof that when it comes to leadership, America has too many 5-watt bulbs screwed into 150-watt sockets.
Who Will Be the New Global King of the Hill?
Posted on Feb 2, 2010
By William Pfaff
China and India stopped being part of what was called the “third world” when the “second world,” the communist world, disappeared in a shattering of global illusions in 1989.
Since then there has been a search to find a new King of the Global Hill. The United States rejoiced for a few years in being the sole superpower, considering it an opportunity to remake the world according to its own advantage.
The 9/11 attacks in 2001 gave it the opportunity and encouragement to try remaking the Middle East and Asia. The effort has not produced the desired results. In Afghanistan and Iraq, the U.S. found itself mired in interventions it has been unable successfully to conclude. It has found itself drawn into deeper and much more dangerous engagements in the political and military affairs of Pakistan, the Iran nuclear imbroglio and an out-of-control Israeli government.
Then came economic crisis: the credit and Wall Street collapse, and an unexpected recoil of international opinion against the American model of globalized capitalism, together with an international consensus that the system has to be replaced on terms that are not America’s terms.
China has assertively placed on the table its claims to international status and authority; recognition of its geopolitical rank and diplomatic weight; and its demand that international opposition or interference cease with respect to its political claims on Tibet, Taiwan, contested islands in the South China Sea, and—for future attention—frontier adjustments with respect to North Korea, Vietnam and India.
It wants economic as well as political respect. China has been financing the American deficit (and its own exports) for years now and is unmoved by American and West European complaints about the managed exchange value of its currency, its trade practices and what widely are considered its predatory practices in securing foreign raw materials for Chinese industry.
Now there is political trouble between the United States and China on the Dalai Lama, and on the supply of arms to Taiwan—an affair whose origins lie in the Second World War and American support for the wartime Nationalist government of Chiang Kai-shek.
Many since 1989 have promoted China as a model for speedy economic development, a candidate to become the new “top nation” through state mobilization of popular energies and ambition. India was at the same time promoted to second place in the Asian competition by showing how similar results could more humanely be produced by democratic government.
China acquired an increasingly glamorous reputation in the West because of its very rapid growth and the soaring living standards of that small minority of Chinese who live in the modernizing sector of the economy. India has acquired the same reputation with the added advantage of democracy.
In both cases world rank has been claimed (and often rewarded in the press) by competitive GDP—in these cases, initially at least, resulting from relatively unsophisticated offshore production for Western markets.
This is now changing, but it will be a long time before China and India will manufacture innovative high-technology goods of autonomous design, competitive with North American and European producers. It will be even longer before standards of living throughout China and India remotely approach North American and West European levels.
By that measure, most observers would name the European Union the new world’s King of the Hill.
But politics have a potentially destructive role to play in all this, both domestic politics and international politics. China has an extremely dangerous and unresolved transition to make from one-party dictatorship, ruled by the self-nominated successors, to a leadership that gave China a half-century of government that at best has been despotic and at worst rivaled, or surpassed, Stalinism.
The Dalai Lama is a symbol of what has happened to democracy in past and present China. Indian democracy is real although ramshackle, riddled with corruption and petty despotism at local levels.
The Barack Obama government in Washington (or should one say, of corporate America) has uncritically accepted the sterile foreign policy of fighting over who is political (and potentially military) King of the Hill in Asia.
It has been making trouble with Japan (the real industrial power in Asia) by insisting on a profitable but potentially politically disastrous perpetuation of the quasi-occupation of Okinawa by the U.S. Marine Corps.
With respect to China, the United States is legally obligated to guarantee the security of (what now has become) a democratic Taiwan. China’s legal claim to the island is impeccable (unless we go back to the original aboriginal population, and the Portuguese, Dutch and Spanish who claimed the island; there was no Chinese presence until a renegade Ming Dynasty general arrived in the 17th century). Its moral claim is not.
The Taiwan issue will nonetheless eventually find a sane resolution if American secretaries of state and Chinese governmental authorities can find it in themselves to refrain from bombastic mutual denunciation and efforts at political and economic blackmail over matters, like Iran, that have nothing to do with Asia.
Economic progress and political development will eventually decide who is future King of the Hill in Asia. China, with a continuity of history that extends back to the Bronze Age, knows how to wait. So do Tibetans. One cannot be so confident about American statesmen and stateswomen.
Visit William Pfaff’s website at www.williampfaff.com.
It's Now More Dangerous to Give Birth in California Than It Is in Kuwait or Bosnia
By Nathanael Johnson, California Watch
Posted on February 2, 2010, Printed on February 3, 2010
http://www.alternet.org/story/145524/
The mortality rate of California women who die from causes directly related to pregnancy has nearly tripled in the past decade, prompting doctors to worry about the dangers of obesity in expectant mothers and about medical complication of cesarean sections.
For the past seven months, the state Department of Public Health declined to release a report outlining the trend.
California Watch spoke with investigators who wrote the report and they confirmed the most significant spike in pregnancy-related deaths since the 1930s. Although the number of deaths is relatively small, it’s more dangerous to give birth in California than it is in Kuwait or Bosnia.
“The issue is how rapidly this rate has worsened,” said Debra Bingham, executive director of the California Maternal Quality Care Collaborative, the public-private task force investigating the problem for the state. “That’s what’s shocking.”
The problem may be occurring nationwide. The Joint Commission, the leading health care accreditation and standards group in the United States, issued a “Sentinel Event Alert” to hospitals on Jan. 26, stating: “Unfortunately, current trends and evidence suggest that maternal mortality rates may be increasing in the U.S.”
The alert asked doctors to consider morbid obesity, high blood pressure and diabetes, along with hemorrhaging from C-sections, as contributing factors.
In 2007, the U.S. Centers for Disease Control and Prevention reported that the national maternal mortality rate had risen, but experts such as Dr. Jeffrey C. King, who leads a special inquiry into maternal mortality for the American College of Obstetricians and Gynecologists, chalked up the change to better counting of deaths. His opinion hasn’t changed.
“I would be surprised if there was a significant increase of maternal deaths,” said King, who has not seen the California report.
But Shabbir Ahmad, a scientist in California’s Department of Public Health, decided to look closer. He organized academics, state researchers and hospitals to conduct a systematic review of every maternal death in California. It’s the largest state review ever conducted. The group’s initial findings provide the first strong evidence that there is a true increase in deaths – not just the number of reported deaths.
Changes in the population – obese mothers, older mothers and fertility treatments – cannot completely account for the rise in deaths in California, said Dr. Elliott Main, the principal investigator for the task force.
“What I call the usual suspects are certainly there,” he said. “However, when we looked at those factors and the data analyzed so far, those only account for a modest amount of the increase.”
Main said scientists have started to ask what doctors are doing differently. And, he added, it’s hard to ignore the fact that C-sections have increased 50 percent in the same decade that maternal mortality increased.
The task force has found that changing clinical practice could prevent a significant number of these deaths.
“This could be a sentinel finding, and I could see other states taking a closer look and finding the same thing,” said Dr. Thomas R. Moore, chair of the Department of Reproductive Medicine at UC San Diego. Moore was not involved in the report.
Low numbers, high consequences
Despite the increase in deaths, pregnancy is still safe for the vast majority of women.
In 2006, 95 California women died from causes directly related to their pregnancies – out of more than 500,000 live births. That’s a small number by public health standards. If California had met the goal set by the U.S. Department of Health and Human Services to bring the state’s maternal mortality rate down to a level achieved by other countries, the number of dead would be closer to 28. (See California maternal mortality rate charthere.)
It’s not clear who is most at risk, but researchers have long known that African-American mothers are between three and four times more likely to die from pregnancy-related causes than the rest of the population. That racial association is not stratified by socio-economic status: Even high-income black women are at a greater risk.
While the maternal mortality rate among black women is rising, the task force found a more dramatic increase in deaths among white, non-Hispanic mothers. There is not yet enough data to show if the risk of death is associated with poverty.
What’s certain is that each maternal death shatters families. That cold sum – 95 dead – represents 95 stories of people such as Tatia Oden French. In 2001, she was newly wed and had just finished her doctorate in psychology. She was about to have a baby girl she would name Zorah Allie Mae French.
“She’s the type of person that just walked into the room and lit it up,” said her mother, Maddy Oden.
During the labor, Maddy Oden was at home in Oakland, waiting for a call announcing the birth of her granddaughter. Instead, she needed an emergency C-section. “I woke up at 4 in the morning, and I knew that something was wrong,” Oden said.
Then the phone rang. French was in trouble. Powerful contractions had forced amniotic fluid into her bloodstream, stopping her heart and killing the baby. When Oden got to her daughter at an Oakland hospital there was only one thing she could do: “We said a prayer,” Oden said, “and I closed her eyes.”
The subsequent lawsuit was dismissed: The doctor had not deviated from the standard of care.
Rather than track down the cause of every death and assign blame, the California task force is focused on finding solutions. And Bingham and Main have found that doctors and nurses are eager to help after seeing the numbers.
In 1996, the maternal death rate in California was 5.6 per 100,000 live births, not far from the national goal of 4.3 per 100,000. Between 1998 and 1999, the World Health Organization changed its coding system, which may have increased reporting of deaths. The California rate was 6.7 in 1998 and 7.7 in 1999. Because the number of mothers who die is small, the rate tends to fluctuate from year to year.
In 2003, when California revised its death certificate, the rate jumped to 14.6. And in 2006, the last year for which data is available, the rate stood at 16.9.
The best estimates show that less than 30 percent of the increase is attributable to better reporting on death certificates. Even accounting for these reporting and classification changes, the maternal death rate between 1996 and 2006 has more than doubled, Main said.
Not yet public
When researchers unveiled their initial findings to a conference of the American College of Obstetricians and Gynecologists in 2007, there were gasps from the audience, according to participants at the San Diego event. The idea that California was moving backward even in an era of high-tech birthing was implausible to some. Confirmation of the trend was noted in the 2008 report written by 27 doctors and researchers. The report was described in detail to California Watch.
The state of California has yet to share the report with the public. Researchers say that, after reviewing the report in 2008, officials in the Department of Public Health asked for technical clarifications. Revisions were complete and approved in the first half of 2009, according to Ahmad.
Al Lundeen, the department’s director of public affairs said, “There was no effort to hold that report back. It just needed some more revisions.”
Researchers say that it is important for the public to be aware now that these trends are worsening. Diane Ashton, the deputy medical director for the March of Dimes, has seen the numbers. She says they demand a concerted response.
“Even though they tend to be small numbers in terms of maternal mortality, it is important – it’s very important – that these trends be looked at,” she said. “And efforts need to be made to try and reverse them when they are going in the wrong direction.”
Rising C-section birth rate
Nearly one in three babies is now born by C-section. Many scientists have acknowledged that at some point, as the number of surgeries spiral upward, the risks will outweigh the benefits. But the C-section remains a useful tool, and in the middle of labor, doctors say, it’s hard to balance the potential long-term harm against immediate crisis.
Today, doctors face a condition called placenta accreta, where the placenta grows into the scar left by a previous C-section. In surgery, doctors must find and suture a web of twisted placental vessels snaking into the patient’s abdomen, which can hemorrhage alarming amounts of blood. Often, doctors must remove the uterus.
Main said this complication from C-sections has increased eight-to-10 fold in the past decade. Nonetheless, most women survive the ordeal. The point, says Catherine Camacho, deputy director of the state’s Center for Family Health, is that the rise in deaths is indicative of a larger problem.
“For every maternal death, there are 10 near misses; for every near miss, there are 10 severe morbidity cases (such as hysterectomy, hemorrhage, or infection), and for every severe morbidity case, there is another 10 morbidity cases related to childbirth,” Camacho wrote in an e-mail.
Other factors are contributing to the rise in deaths, but the researchers in California are most interested in the areas where they have control, such as the high C-section birth rate: It’s easier for doctors to improve medical care than to fix more intractable problems like poverty and obesity.
Inducing labor before term more common
In 2002, Dr. David Lagrew, the medical director of the Women’s Hospital at Saddleback Memorial Medical Center in Orange County, noticed that a lot of women were having their labor induced before term without a medical reason. And he knew that having an induction doubled the chances of a C-section.
So he set a rule: no elective inductions before 41 weeks of pregnancy, with only a few exceptions. As a result, Lagrew said, the operating room schedules opened up, and the hospital saw fewer babies admitted to the neonatal intensive care unit, fewer hemorrhages and fewer hysterectomies.
All this, however, came at a cost: The hospital had to take a cut in revenue for reducing the procedures it performed. Lagrew doubts that any hospital has increased its C-section rate in pursuit of profit, but he does note that the first hospitals to adopt controls on early elective inductions have been nonprofits.
According to a report issued by the advocacy group Childbirth Connection, “Six of the 10 most common procedures billed to Medicaid and to private insurers in 2005 were maternity related.” On average, a C-section brings in twice the revenue of a vaginal birth. Today, the C-section is the single most common surgical procedure performed in the United States.
“If all these guys were losing money on every C-section, well, what’s the old saying? Whenever they tell you it’s not about the money, it’s about the money,” Lagrew said.
The California task force isn’t waiting to determine the ultimate cause of these deaths. It has started pilot projects to improve the way hospitals respond to hemorrhages, to better track women’s medical conditions and to reduce inductions – as Lagrew did at Memorial Care.
Although the state hasn’t released the task force’s report, the researchers and doctors involved forwarded data to the national Joint Commission, which issued incentives for hospitals to reduce inductions and fight what it called “the cesarean section epidemic.”
“You don’t have to be a public health whiz to know that we are facing a big problem here,” Bingham said.
Why Has the FDA Allowed a Drug Marked 'Not Safe for Use in Humans' to Be Fed to Livestock Right Before Slaughter?
By Martha Rosenberg, CounterPunch
Posted on February 2, 2010, Printed on February 3, 2010
http://www.alternet.org/story/145503/
While researchers and scientists investigate the cause of our diabetes, obesity, asthma and ADHD epidemics, they should ask why the FDA approved a livestock drug banned in 160 nations and responsible for hyperactivity, muscle breakdown and 10 percent mortality in pigs, according to angry farmers who phoned the manufacturer.
The beta agonist ractopamine, a repartitioning agent that increases protein synthesis, was recruited for livestock use when researchers found the drug, used in asthma, made mice more muscular says Beef magazine.
But unlike the growth promoting antibiotics and hormones used in livestock which are withdrawn as the animal nears slaughter, ractopamine is started as the animal nears slaughter.
As much as twenty percent of Paylean, given to pigs for their last 28 days, Optaflexx, given to cattle their last 28 to 42 days and Tomax, given to turkeys their last 7 to 14 days, remains in consumer meat says author and well known veterinarian Michael W. Fox.
Though banned in Europe, Taiwan and China--more than 1,700 people were "poisoned" from eating Paylean-fed pigs since 1998 says the Sichuan Pork Trade Chamber of Commerce-- ractopamine is used in 45 percent of US pigs and 30 percent of ration-fed cattle says Elanco Animal Health which manufactures all three products.
How does a drug marked, "Not for use in humans. Individuals with cardiovascular disease should exercise special caution to avoid exposure. Use protective clothing, impervious gloves, protective eye wear, and a NIOSH-approved dust mask" become "safe" in human food? With no washout period?
The same way Elanco's other two blockbusters, Stilbosol (diethylstilbestrol or DES), now withdrawn, and Posilac or bovine growth hormone (rBST), bought from Monsanto in 2008, became part of the nation's food supply: shameless corporate lobbying. A third of meetings on the Food Safety and Inspection Service's public calendar in January 2009 were with Elanco, a division of Eli Lilly--or about ractopamine.
In fact, in 2002, three years after Paylean's approval, the FDA's Center for Veterinary Medicine's Office of Surveillance and Compliance accused Elanco of withholding information about "safety and effectiveness" and "adverse animal drug experiences" upon which ractopamine was approved, in a 14-page warning letter.
"Our representatives requested a complete and accurate list of all your GLP [Good Laboratory Practices] studies involving Paylean® (Ractopamine hydrochloride), including their current status as well as the names of the respective study monitors. In response, your firm supplied to our representatives multiple lists which differed in the names of the studies and their status. In addition, your firm could not locate or identify documents pertaining to some of the studies. This situation was somewhat confusing and created unneeded delays for our representatives," wrote Gloria J. Dunnavan, Director Division of Compliance.
Where was mention of the farmer phone calls to Elanco reporting, "hyperactivity," "dying animals," "downer pigs" and "tying up" and "stress" syndromes, asks the FDA letter. Where was the log of phone calls that included farmers saying, "animals are down and shaking," and "pig vomiting after eating feed with Paylean"?
But, not to worry. Despite ractopamine's dangers and the falsified approval documents, the FDA approved ractopamine the following year for cattle--and last year for turkeys.
According to Temple Grandin, Professor of Animal Science at Colorado State University, the "indiscriminant use of Paylean (ractopamine) has contributed to an increase in downer non-ambulatory pigs," and pigs that "are extremely difficult to move and drive." In Holsteins, ractopamine is known for causing hoof problems, says Grandin and feedlot managers report the "outer shell of the hoof fell off" on a related beta agonist drug, zilpateral.
A article in the 2003 Journal of Animal Science confirms that "ractopamine does affect the behavior, heart rate and catecholamine profile of finishing pigs and making them more difficult to handle and potentially more susceptible to handling and transport stress."
Nor can we overlook the effects of "adding these drugs to waterways or well water supplies--via contaminated animal feed and manure runoff-- when this class of drugs is so important in treating children with asthma," says David Wallinga, MD of the Institute for Agriculture and Trade Policy.
The FDA's approval of a drug for food that requires impervious gloves and a mask just to handle is reminiscent of the bovine growth hormone debacle.
Like rBST, ractopamine increases profits despite greater livestock death and disability because a treated animal does the work of two in a macabre version of economies of scale.
Like rBST, food consumers are metabolic, neurological and carcinogen guinea pigs so that agribusiness can make a profit.
And like rBST, "Mothers Of Growing Children" was not marked as a visiting group on the Food Safety and Inspection Service's public calendar next to the ag lobbyists.
Martha Rosenberg is a columnist and cartoonist who frequently writes about the impact of the pharmaceutical, food and gun industries on public health. A former medical copywriter, her work has appeared in the Boston Globe, San Francisco Chronicle, Los Angeles Times and Chicago Tribune, as well as on the BBC and in the original National Lampoon.
Landmark Trial About Patenting Humans Begins Today
NEW YORK - February 2 - The American Civil Liberties Union’s challenge of patents on two human genes associated with hereditary breast and ovarian cancer goes to trial here today.
Around 20 percent of the human genome has been patented by private interests. The trial, which begins today, seeks a ruling on whether such patents violate the Patent Act and the Constitution. The defendant, Myriad Genetics, holds the patents to two human genes and charges $3,000 for its tests to determine whether the genes are present in individuals. These patents prevent other researchers from exploring connections between these genes and breast and ovarian cancer, or to come up with more effective and affordable tests.
Eric Hoffman, genetic engineering policy campaigner for Friends of the Earth, praised the ACLU for bringing the case to trial.
“Genetic material is the basis for all life. It has existed since the beginning of the living world,” Hoffman said. “The human genome is shared by all human beings, varying by only a fraction of a percent between people. This makes human genetic material a common good. Scientists are only beginning to understand the complexity of the human genome and by granting ownership over genes, the U.S. Patent and Trademark Office has limited the ability of scientists and health researchers to learn more about our bodies. This limits progress in fields that have the potential to benefit the health of all people.”
The trial beginning today is just one challenge confronting the corporations that are patenting human genes. Federal legislation, the “Genomic Research and Accessibility Act,” is soon expected to be introduced by Representative Xavier Becerra (D-CA). This bill prohibits the patenting of naturally occurring genes (nucleotide sequences), their functions, and their naturally occurring products, which the United States Patent and Trade Office has permitted since 1994.
“The Patent Office has erred in allowing corporations to patent parts of our bodies. We welcome Representative Becerra’s efforts to change this,” Hoffman said.
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Friends of the Earth is the U.S. voice of the world's largest grassroots environmental network, with member groups in 77 countries. Since 1969, Friends of the Earth has fought to create a more healthy, just world.
Published on The Smirking Chimp (http://www.smirkingchimp.com)
We've All Been Reamed!
By Mike Whitney
Created Feb 2 2010 - 11:02am
The reappointment of Fed chairman Ben Bernanke means that the opportunity for change has passed and the reform movement is dead. It means that and that derivatives trading, off-balance sheet operations, securitization, dark pools and high frequency trading will go on much as they have before. It means that the public will continue to be gouged so that a handful of Wall Street sharpies can rake in obscene profits using complex "financial innovations" and over-leveraged debt instruments. It means that the entire system will continue to be put at risk to protect the interests of investment banks and hedge funds. It means that the subsidies, the preferential treatment, and the bailouts will continue to fuel populist rage and exacerbate deepening divisions in society. It means that the status quo has been preserved and that it's "business as usual".
No reform movement will succeed as long as Bernanke is at the Fed. He's an agent of the big banks and a Wall Street loyalist. He's also the author of "Too Big To Fail", the controversial theory which provides unlimited state support for financial institutions that are deemed too large or interconnected to fail. TBTF means that capitalism's vital market clearing function can avoided if one is rich or powerful enough. Bernanke repealed capitalism to save his friends.
The Fed's role in the housing fiasco, goes way beyond Alan Greenspan's low interest rates which ignited the frenzy of speculation that led to the crash. It's clear now, that both Greenspan and Bernanke knew that the multi-trillion dollar credit expansion, was based on mortgages to applicants who had no way of repaying the money they had borrowed. It was a complete scam. Recent testimony by FDIC chairman Sheila Bair before the Financial Crisis Inquiry Commission (Jan 14, 2010) provides many of the details. Naturally, Bair's testimony has been ignored by the media.
Sheila Bair: "Federal consumer protections from predatory and abusive mortgage-lending practices are established principally under the Home Ownership and Equity Protection Act (HOEPA), which is part of the Truth in Lending Act (TILA). TILA and HOEPA regulations are the responsibility of the Board of Governors of the Federal Reserve System (FRB) and apply to both bank and non-bank lenders.
HOEPA, which was enacted in 1994, contains specific statutory protections for a narrow category of high cost loans used for mortgage refinancings. These protections include restrictions on prepayment penalties, balloon payments, and extensions of credit without consideration of a borrower's ability to repay. HOEPA defines these high cost loans in terms of threshold levels for either interest rates or points and fees. Many of the toxic mortgage products that were originated to fund the housing boom did not fall within the high cost loan definition under HOEPA. However, many of these toxic products could have been regulated and restricted under another provision of HOEPA that requires the Federal Reserve to prohibit acts or practices in connection with any mortgage loan that it finds to be unfair or deceptive, or acts and practices associated with refinancing of mortgage loans that it finds abusive or not otherwise in the interest of the borrower.
PROBLEMS IN THE SUBPRIME MORTGAGE MARKET WERE IDENTIFIED WELL BEFORE MANY OF THE ABUSIVE MORTGAGE LOANS WERE MADE. A joint report issued in 2000 by HUD and the Department of the Treasury entitled Curbing Predatory Home Mortgage Lending noted that a very limited number of borrowers benefit from HOEPA's protections because of the high thresholds that a loan must exceed in order for the protections to apply. THE REPORT ALSO FOUND THAT CERTAIN TYPES OF SUBPRIME LOANS APPEAR TO BE HARMFUL OR ABUSIVE IN PRACTICALLY ALL CASES. To address these issues, THE REPORT MADE A NUMBER OF RECOMMENDATIONS INCLUDING THAT THE FEDERAL RESERVE USE ITS HOEPA AUTHORITY TO PROHIBIT CERTAIN UNFAIR DECEPTIVE AND ABUSIVE PRACTICES BY LENDERS AND THIRD PARTIES. During hearings held in 2000, consumer groups urged the Federal Reserve to use its HOEPA rulemaking authority to address concerns about predatory lending. Both the House and Senate held hearings on predatory abuses in the subprime market in May 2000 and July 2001, respectively...."
Bernanke--who followed developments in housing in great detail--didn't lift a finger to stop the predatory lending until 2008 when he finally used his regulatory authority to restrict activities in just one small area of the market, closed-end mortgage loans.
Shiela Bair again: "For this new category of higher priced mortgage loans, these changes address many of the abuses which led to the current housing crisis and help assure that mortgage borrowers have stronger, more consistent consumer protections, regardless of the lender they are using or the state where they reside. The rule imposes an "ability to repay" standard in connection with higher-priced mortgage loans. For these loans, the rule underscores a fundamental rule of underwriting: that all lenders, banks and nonbanks, should only make loans where they have documented a reasonable ability on the part of the borrower to repay. The rule also restricts abusive prepayment penalties."
So, you see, that even after the media had started exposing the hijinx that were rampant in the mortgage market, Bernanke STILL refused to act, or rather, only used his regulatory powers on one narrow part of the market. At the very least, Bernanke's failure to respond makes him criminally negligent in the biggest ripoff in US history.
Sheila Bair again: "We believe that an 'ability to repay' standard should be required for all mortgages, including interest-only and negative-amortization mortgages and home equity lines of credit (HELOCs). Interest-only and negative-amortization mortgages must be underwritten to qualify the borrower to pay a fully amortizing payment. Otherwise, the consequences we have seen during this crisis will recur."
Bernanke even refused to enforce the most basic "common sense" regulation, that loan applicants be able to prove that they have the ability to repay their mortgages! No wonder Bair's testimony appears nowhere in the mainstream media; it proves the Fed's culpability in the biggest financial crash since the Great Depression.
But, why? Why would Bernanke refuse to act even though he could see that markets would plummet and millions would lose their homes in foreclosure?
William Seidman, the former head of the FDIC, figured it out back in 1993 when he was cleaning up after the S&L crisis. He said:
“Instruct regulators to look for the newest fad in the industry and examine it with great care. The next mistake will be a new way to make a loan that will not be repaid.”
That's it in a nutshell. The banks didn't care if the loans were repaid because they got their money "up front" on volume originations. That's why they were so eager to issue mortgages to people with no income, no collateral, no job, and a bad credit history. It was all a gigantic skimming operation, where banks and brokers got their cut and then bailed out before the whole thing blew up. Bair's testimony shows that the Fed knew what was going on; knew that the loans were garbage, knew that people were being victimized, knew that eventually the bubble would burst and the economy would go into a long-term nosedive.
Bernanke's job was simple; just look the other way while his fatcat buddies steal as much as possible.
Don't believe me? Read Bair's testimony.
We've all been reamed!
Published on Tuesday, February 2, 2010 by The Media Consortium
Don’t Let Citizens United Wreck Our Economy
by Zach Carter
In a landmark decision last week, the Supreme Court ruled that corporations could spend unlimited funds to influence American elections, overturning a century of legal precedent. The Court’s ruling in Citizens United v. FEC undermines the integrity of the U.S. government, as President Barack Obama emphasized at his State of the Union address. But the decision also deals a damaging blow to the U.S. economy by encouraging lawmakers to write economic rules that benefit specific companies at the expense of everyone else.
The editors of The Nation lay out the High Court’s hubris in no uncertain terms :
The Citizens United campaign finance decision by Chief Justice John Roberts and a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation’s most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself.
Citizens United and the financial crisis
How does this ruling have any bearing on the economy? Markets are not simply the product of random interactions between consumers and producers. Even under the most radical, laissez-faire economic theories, markets are defined, coordinated and policed by the government. For the economy to function at all, we need the government to define what constitutes fair play.
But over the past few decades, we’ve watched Congress and the executive branch rewrite those rules of the game under heavy corporate influence, creating artificial profits for a set of favored companies with very bad consequences for the broader economy.
The U.S. banking industry serves as a prime example. Since the 1980s, banks have been spending like crazy in all kinds of elections, and getting just about anything they want in return. I interviewed Harvard University Law Professor and TARP Oversight Panel Chair Elizabeth Warren for AlterNet , and she presented a concise but unsettling economic history of consumer protection law:
Thirty years ago we had laws that put some basic fairness into the consumer credit market. Over time, the large financial institutions captured the regulators who were supposed to be the cops on the beat to enforce those laws. They also pumped hundreds of millions of dollars into Washington to make sure that no new cops were put on the beat. Without good laws, the industry started selling ever-more-deceptive products, and their friendly regulators looked the other way.
The bank lobby and the AIG bailout
In Mother Jones, Corbin Hiar reveals how even a bank that engineered a massive tax fraud scheme was able to benefit from the AIG bailout. Major financial institutions convinced Congress to block any regulation of credit default swaps (CDS) all the way back in 2000. CDS contracts were essentially insurance on the value of financial assets—if the assets lost value, banks would still get paid as if they were highly profitable.
CDS insurance encouraged banks to engage in risky mortgage lending, and allowed them to book huge profits on those risky mortgages during the housing boom, even though many of those mortgages were doomed from the get-go. AIG binged so heavily on CDS that the company was on the brink of bankruptcy in the fall of 2008. But an AIG bankruptcy would have hammered the major banks who served as AIG’s betting partners, most notably Goldman Sachs. Those banks would have received just pennies on the dollar from a bankrupt AIG. But under the bailout, the New York Federal Reserve paid the banks off at full value, without demanding any concessions whatsoever.
“The credit crunch was an existential threat to every over-leveraged big bank. What’s most shocking about the AIG bailout … is that these endangered banks were able to extract such a sweet deal from the government,” Hiar writes. “The banks were paid the full value of all the CDS contracts they had made with AIG—including those mortgage-backed securities they had bought when it was clear the subprime market was collapsing.”
The only AIG counterparty to even consider taking CDS losses was Swiss banking giant UBS, which was negotiating a separate settlement with the U.S. government over a massive tax evasion scheme. But even the tax fraudsters at UBS ultimately received full payment on their CDS exposure, and it now appears that the Swiss bank will be able to protect its wealthy tax-evading clients.
With the AIG bailout, the corporate takeover came full-circle. The banks purchased radical deregulation in Congress, and when the deregulated banks destroyed themselves, the government paid out billions to save them. The rest of the economy was ravaged by predatory lending, and taxpayers, not bankers, footed the bill for bank losses.
Redefining corruption
So the Citizens United decision will not introduce corporate influence in elections. Instead, it takes an uneven playing field and tilts it further in the favor of corporate executives. The Roberts court didn’t just open the floodgates for corporate cash in U.S. elections and call it a day. It also explicitly redefined “corruption” to give corporations—and anyone else—greater leeway to financially curry favor with politicians. Heather K. Gerken details the new definition for The American Prospect:
The most important line in the decision … was this one: “ingratiation and access … are not corruption.” For many years, the Court had gradually expanded the corruption rationale to extend beyond quid pro quo corruption (donor dollars for legislative votes). It had licensed Congress to regulate even when the threat was simply that large donors had better access to politicians or that politicians had become “too compliant with the[ir] wishes.” Indeed, at times the Court went so far as to say that even the mere appearance of “undue influence” or the public’s “cynical assumption that large donors call the tune” was enough to justify regulation. “Ingratiation and access,” in other words, were corruption as far as the Court was concerned.
Most of us would consider the key lawmakers ensnared in the Jack Abramoff scandal as fundamentally corrupt—Abramoff flew former Republican Whip Tom DeLay of Texas to Scotland for golfing vacations in an effort to win greater leverage over DeLay’s legislative agenda. The court’s ruling claims that this kind of activity is not corrupt, and bars Congress from passing any laws to counteract it. As filmmaker Alex Gibney emphasizes in an interview withAmy Goodman of Democracy Now! , the court has essentially taken Tom DeLay’s corporatist philosophy and made it a piece of constitutional law.
“Tom DeLay’s view is, we spend more money on potato chips than we do on political campaigns. His view would be, let the money rush down like great waters,,” Gibney says. “I think the court was channeling Tom DeLay when they issued their recent decision.”
Why citizens need to speak out now
So what can we do about this? As GRITtv’s Laura Flanders discusses in a roundtable discussion with several progressive leaders, there will be a long fight for a Constitutional Amendment to ban corporate influence in politics. Until then, as progressive strategist Mike Lux explains, citizens will have to take an aggressive stance against Corporate America as shareholders. Corporate power is exercised by a handful of executives, but the resources that support that power come from ordinary Americans who own stock in those companies, primarily through retirement plans. By demanding that the giant firms we own do not highjack our democracy with lobbying, we can limit some of the damage from the court’s recent decision.
If you liked the bank bailouts, then there’s plenty for you to love about the Citizens United decision. If you didn’t, then it’s time to speak up.
Our Incredible Shrinking Democracy
By Robert Reich, Robert Reich's Blog
Posted on February 2, 2010, Printed on February 2, 2010
http://www.alternet.org/story/145512/
I wish conservatives would stop complaining about big government and start worrying about the real problem – small democracy. I wish we’d all worry more about our incredible shrinking democracy.
It seems as if more and more decisions that should be made democratically are being shunted off somewhere to a few people who make them in back rooms. Which programs should be cut, which entitlements pared back, and what taxes raised in order to reduce the long-term budget deficit? Hmmm. Let’s convene a commission and have them decide.
Commissions are a default mechanism when politicians want to hand off difficult issues to “experts.” But reducing the long-term budget deficit has almost nothing to do with expertise. It’s about our nations’ values and priorities. Nothing could be more central to the democratic process.
Democracy requires at least three things: (1) Important decisions are made in the open. (2) The public and its representatives have an opportunity to debate them, so the decisions can be revised in light of what the public discovers and wants. And (3) those who make the big decisions are accountable to voters.
But these principles are in retreat, and I say this not just because of the proposed deficit commission.
The notorious Troubled Assets Relief Program (TARP) began with a virtual blank check from Congress. Treasury officials then secretly decided which companies were to receive hundreds of billions of dollars. Why these particular entities were chosen and not others remains a mystery. For months, the Treasury didn’t even disclose the identities of the major banks that giant insurer AIG repaid with its bailout money – 100 cents on each dollar AIG owed them.
The Federal Reserve, meanwhile, has gone far beyond its traditional role of setting short-term interest rates. It has bought up massive amounts of debt – mortgage debt, Treasury bills, and debt instruments emanating several public agencies, many of them supporting a wide range of private entities. No one outside the Fed knows the ultimate beneficiaries of all this government backing, the criteria used by the Fed for making these commitments, or even how much debt the Fed is buying.
Even if the economic emergency justified such secrecy – and it’s hard to see exactly why it would – the emergency is over, and yet closed-door decision making continues. Will Treasury use what’s left of TARP to help stimulate more jobs and, if so, how? Will the Fed stop buying mortgage-backed securities? No one knows.
The same pattern is evident on other issues. Congress can’t decide whether or how to limit the pay of financial executives. So where does the issue end up? The Securities and Exchange Commission and the Fed both say they’re going to look at whether pay levels are appropriate. The House and Senate can’t agree on what to do about climate change. Who decides? The Environmental Protection Agency concludes it has authority to regulate carbon emissions under the Clean Air Act.
The debate over health-care reform looked like democratic deliberation until you realize the key negotiations that framed the deal occurred behind closed doors, between the White House and Big Pharma and Big Insurance. The Administration promised these industries some thirty million new paying customers. In return, they agreed not to oppose the plan. Big Pharma even placed a firm limit on how much it would cut its costs over the next ten years – $80 billion, and not a penny more. How do I know this? Not because this crucial deal was made in public, but because it was leaked to the press.
Personally, I want the government to limit the pay of financial executives, regulate greenhouse gases, and reform health care. And no one wanted a financial meltdown. But I’m appalled by the process that’s been used to reach these objectives.
A big piece of the problem is this: Washington is now so overrun by lobbyists representing moneyed interests that it’s become almost impossible to make policy in the open. If the Treasury and Fed tried to decide publicly which industries and firms should get hundreds of billions, they’d be inundated. Wall Street lobbyists are blocking real financial reform. The energy industry has filled the House’s cap-and-trade bill with special subsidies and exemptions. Big Pharma and Big Insurance would have killed off the health-care reform if they hadn’t been bought off. When it comes to the long-term deficit, Congress is incapable of acting because so many special interests have their hands out.
But the answer isn’t to give up on democracy. Back-room policy making can succumb to private interests just as easily as lobby-infested legislatures (much of the public suspects the Treasury of being too cozy with Wall Street as it is).
The real answer is to recommit ourselves to cleaning up democracy. Yes, I know: The Supreme Court’s recent grotesque Citizens United vs. Federal Election Commission, which decided corporations are people entitled to First Amendment protection, complicates this. But the goal is still possible to achieve with more public money for congressional and presidential candidates who refuse private funding, more constraints on lobbyists, tighter rules for who must register as a lobbyist, fuller disclosure, and tougher rules on the revolving door between public service and private gain. Yale’s Bruce Ackerman recently came up with another good idea: A $50 tax credit per person, which they can send to the candidate of their choosing.
Yet nobody seems to be talking about these sorts of reforms. They don’t appear on Obama’s agenda. True, they don’t generate lots of public excitement or appreciation, and they’re murderously difficult to enact. But without them our democracy doesn’t stand a chance.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Supercapitalism.
2010 Environmental Performance Index by Country
Written by: Admin
According to the report compiled by Yale and Columbia Universities, Iceland ranked at top as a country with sound environmental policies that effectively addressed pollution control and natural resource management challenges. Iceland is also the country which gets almost all its power from renewable sources such as hydropower and geothermal energy. The United States in the previous version of the report was at 39th place, now falling at 61st place. China fell from 105th place earlier to 121st place.
The top four countries scored between 100-85 EPI points. The top four countries are: (1) Iceland with 93.5 EPI score, (2) Switzerland with 89.1 EPI score, (3) Cost Rica with 86.4, and (4) Sweden with 86.0 EPI score.
Many factors impact the ranking. However, the index provides a good sneak peak at efforts by each country in implementing sound environmental policies.
Below is the press release and a link at the end to see environmental index by country:
CONTACT:
Christine Kim, +1 203 432 6065 (tel), +1 203 432 0237 (fax),christine.kim@yale.edu
For Immediate Release: January 28, 2010
Iceland Ranks at Top of 2010 Environmental Performance Index
Davos, Switzerland – Iceland leads the world in addressing pollution control and natural resource management challenges, according to the 2010 Environmental Performance Index (EPI) produced by a team of environmental experts at Yale University and Columbia University. This is the third edition of the EPI, which has been revisited biannually since 2006.
Released today at the World Economic Forum Annual Meeting 2010, the EPI ranks 163 countries on their performance across 25 metrics aggregated into ten categories including: environmental health, air quality, water resource management, biodiversity and habitat, forestry, fisheries, agriculture, and climate change.
Iceland’s top-notch performance derives from its high scores on environmental public health, controlling greenhouse gas emissions, and reforestation. Other top performers include Switzerland, Costa Rica, Sweden, and Norway – all of which have made substantial investments in environmental infrastructure, pollution control, and policies designed to move toward long-term sustainability. Occupying the bottom five positions are Togo, Angola, Mauritania, the Central African Republic, and Sierra Leone –impoverished countries that lack basic environmental amenities and policy capacity.
The United States places 61st in the 2010 EPI, with strong results on some issues, such as provision of safe drinking water and forest sustainability, and weak performance on other issues including greenhouse gas emissions and several aspects of local air pollution. This ranking puts the United States significantly behind other industrialized nations like the United Kingdom (14th), Germany (17th), and Japan (20th). Over 20 members of the European Union outrank the United States. The United States’ ranking does not reflect the recent policy activities of the Obama Administration, as the 2010 EPI builds on data from before 2009.
Of the newly industrialized nations, China and India rank 121st and 123rd respectively – reflecting the strain rapid economic growth imposes on the environment. However, Brazil and Russia rank 62nd and 69th, suggesting that the level of development is just one of many factors affecting placement in the rankings.
The 2010 EPI report provides a detailed analysis for each country, showing its performance on each of the 25 basic indicators, the ten core policy categories, and the two over-arching objectives of environmental public health and ecosystem vitality. In addition, each nation is benchmarked against others that are similarly situated with groupings based on geographic regions, level of development, trading blocs, and demographic characteristics. These peer group rankings make it easy to highlight leaders and laggards on an issue-by-issue basis and to identify “best practices.”
Analysis of the policy drivers underlying the 2010 rankings suggests that income is a major determinant of environmental success. At every level of development, however, some countries achieve results that exceed what would be anticipated, demonstrating that policy choices also affect performance. For example, Chile, where substantial investments in environmental protection have been made, ranks 16th, while its neighbor, Argentina, which has done much less to improve its pollution control and natural resource management, lags in 70th place. Regulatory rigor, the rule of law and good governance, and the absence of corruption also show strong correlations with high EPI scores.
“At the Copenhagen Climate Conference last month, reliable environmental performance data emerged as fundamental to global-scale policy cooperation,” said Daniel C. Esty, director of the Yale Center for Environmental Law and Policy and the Hillhouse Professor of Environmental Law and Policy at Yale. “The 2010 EPI shows the potential for a much more analytically rigorous approach to environmental decisionmaking, but substantial investments in indicators that are systematically tracked and transparently displayed will be needed.”
The Environmental Performance Index builds on the best data available with indicators drawn from international organizations, such as the World Bank, the UN Development Programme, the UN Food and Agriculture Organization (FAO), and the UN Framework Convention on Climate Change, as well as research groups such as the World Resources Institute and the University of British Columbia. But many of these data sets are based on reporting by national governments that is not subject to any external review or verification.
Serious data gaps, moreover, limit the ability to measure performance on a number of important issues. And incomplete data resulted in the exclusion of dozens of countries from the 2010 EPI. “High-quality data combined with appropriate statistical analysis can certainly help policymakers identify problems and trends, hone preferred policy approaches, and more effectively leverage public investments in environmental protection,” said Jay Emerson, professor of statistics at Yale and one of the leaders of the 2010 EPI effort. “However, the conclusions that emerge are only as good as the underlying data. We are firmly committed to further improvements in data quality,” he added.
Marc Levy, deputy director of Columbia’s Center for International Earth Science Information Network and one of the EPI project leaders, further observed, “For some critical issues such as water, international investments have actually decreased in recent years.”
Why Are Americans Passive as Millions Lose Their Homes, Jobs, Families and the American Dream?
By Harriet Fraad, Tikkun
Posted on February 2, 2010, Printed on February 2, 2010
http://www.alternet.org/story/145481/
This is the cover article for the January/February issue of Tikkun magazine. For more on the article and the magazine go here.
An unnatural economic and psychological disaster has struck America. Five contributors, each interacting with and shaping the others, have devastated the American moral, economic, psychological, and social landscape. Each is fed by related streams, but each contributes its own force to the disaster. The American dream in which each generation surpassed the previous generation in real wages has all but disappeared, along with dreams of an intact family, a steady job, a home, and an honest supportive community.
This article looks at each of five collaborators in the crisis in order to answer the following questions:
How did this happen? What forces are responsible?
Why are Americans passive as millions lose their homes, their jobs, their families, their hopes of justice, and the American dream?
Why do Americans remain disorganized at home while their European and Asian counterparts flood into the streets and strike in militant, organized protest? Why do others believe in their potential to reclaim their lives while we do not?
What happened is a result of at least five major, interrelated forces. One is a transformation of American morality, and with it the loss of belief that the social and political realms could be shaped by morality, ethics, and secular spirituality. Another is an economic depression. A third is a transformation of the family, which has been the foundation of American emotional life. A fourth is the decimation of Americans' social participation in all areas, from bridge clubs and PTAs to political parties. A fifth is the tranquilizing and numbing of the American population with psychotropic medications.
1. The Crisis in Morality and Social Ethics
Let us begin with the first of our contributors: American ethics, morality, and spirituality. The same forces that decimated our economic, psychological, and social landscapes have transformed our sense of morality and social ethics. The shared dream of an ethical, moral society that dominated the United States until the 1970s has systematically eroded. In the 1960s it was common to believe that morality and spirituality include a concern for all human beings, rich and poor alike. The biggest push against those social ethics began with Reagan's presidency in 1981. It continued in Reagan's second term and was reinforced by each president until its (we hope) final act in the presidency of George W. Bush.
Reagan's basic ideology was that people are poor because they lack incentives. He claimed that poor people's noble drive to get rich is eroded by social programs that permit them to survive or, in his term, "freeload." In this framework, income tax cuts increase the incentive to work and get rich, so all are expected to benefit from them. In 1980 the highest incomes were taxed at 73 percent. In 2009 those same high incomes were taxed at half that rate, 35 percent. Of course the percentage of tax on the highest incomes is actually even lower, since the wealthiest Americans can hire tax accountants to help them evade taxes. Reagan used his famous veto power to cut a huge range of social programs from biomedical research, to social security for disabled Americans, to clean water, to expanded Head Start. At the same time, he increased the military budget while decrying big government.
That pattern has been repeated ever since, which is how, according to the Organization for Economic Cooperation and Development, the United States went from being the most egalitarian western industrialized society in 1970 to the least egalitarian in 2009.
In addition, the Soviet model of socialism failed. It did not provide the kind and ethical societies that are part of a socialist vision. The mass of people believed that the Soviet Union was communism. Left-wing class analyses of the failure of Soviet Communism, such as Bettelheim's in the late 1970s or Resnick and Wolff's in 2002, were not widely read or embraced. Both of those analyses demonstrate that the USSR and its satellites exemplified class societies in which a bureaucratic class appropriated wealth and made crucial decisions affecting the lives of the mass of people. They explain that the USSR failed because it was not a communist society. It was not a society in which the people in each workplace decided what to produce, and also collected their own profits and decided together how to distribute those profits. Because these left-wing class interpretations were few and largely unembraced, a socialist or communist dream seemed doomed to end in rigid, bureaucratic, and undemocratic societies that were rejected by their own people. People lost faith in a secular dream.
Slowly there has been a transformation of our morality and ethics. Where our morality once required the United States to embody our ethics in the world and empower all citizens, it has shifted so that our morality now consists of requiring conservative personal and sexual behavior. Within that morality Clinton committed an impeachable crime by lying about having sex with an intern, while Bush and Cheney did not commit impeachable crimes by lying about the threat from Iraq and thus causing the deaths of over four thousand U.S. soldiers and hundreds of thousands of Iraqi civilians, or by torturing prisoners. It is not considered immoral to spend between six billion and twelve billion dollars a week on the war in Iraq while cutting school and social programs for needy families because "there is not enough money." The secular morality that made America a proudly democratic and egalitarian nation has deteriorated. We are experiencing a national moral, ethical, and spiritual crisis.
2. The Dying of the Economic Dream
A second contributor to American passivity is the economic crisis from which we are suffering. Let us look at our history in order to understand what happened. From 1820-1970, the United States experienced a unique period of ever-increasing prosperity. For 150 years, U.S. salaries rose together with ever-increasing worker productivity. For 150 years, each generation was able to afford a better standard of living than the generation that preceded it. That was the American dream.
Unlike their European counterparts, Americans did not enjoy working-class solidarity with other workers whose families and social organizations, unions and political parties were inflected by a history of overt class struggle fought as proudly permanent members of the working class. Europeans organized their working unions along political lines. They fought for better conditions as part of the ideology of long-term communist and socialist struggles for ownership and control of their workplaces.
The U.S. labor movement is not informed by a struggle for worker ownership of the businesses that produce U.S. goods and services. Decisions about what to produce and the right to appropriate and distribute profits are left to corporate boards of directors. Americans accepted the capitalist system in which each generation had relatively prospered. American labor fought for an increasing amount of income that would permit workers to consume more goods and services, a system in which each generation could move to jobs considered more prestigious and lucrative within the capitalist hierarchy. Blue-collar workers' children could become white-collar, and white-collar children could become professionals in the next generation (particularly if they were not just white-collar but white, period). U.S. growth permitted ever-increasing real wages and possibilities for consumption. Even in the Great Depression from 1929-1939, real wages, the amount that one could buy with one's wages, were able to rise because prices fell even faster than wages.
That ever-increasing prosperity stopped in 1970. By 1970 the introduction of computers, better telecommunications, and more efficient transportation enabled jobs to be outsourced to lower-paid workers overseas. Competing factories in Europe and Japan, which had been decimated by World War II, were now vying for U.S. markets. Then China emerged as a manufacturing giant. Competition reduced the U.S. share of both domestic and global markets. The outsourcing of American jobs to cheaper labor markets was not stopped by militant unions, which were unable to achieve the powerful "runaway shop" laws that were won in other nations. Nor did militant unions force the creation of a tight safety net to catch workers in financial distress.
For a long time, there was a relative scarcity of white male workers available for the jobs reserved for white males in America's racially and sexually segregated job markets. White male workers, who were accustomed to receiving increasing real wages and living a lifestyle of ever-greater consumption, could no longer support their families on their frozen wages. Americans' sense of self worth was in large part dependent on their net worth. They became increasingly depressed. Their sense of personal value was cut with their salaries. This happened as the advertising industry burgeoned. Advertising continuously and relentlessly sells consumption as the path to happiness. Consumption was undermined and with it stability, prosperity, and a sense of personal success.
3. What Produced the Crisis in Personal and Family Life?
Economic desperation pushed many more women into the labor force to increase money for the household. Previous to the 1970s, most white, nonimmigrant American women entered the labor force only in times of particular and urgent family need: upon divorce, or if a husband died, was ill, unemployed, or deserted his family. Women's labor outside the home provided some safety in times of emergency. In 1970, 40 percent of U.S. women were in the labor force, mostly part time. By the year 2008, 75 percent of U.S. women were in the labor force, mostly full time. Many women enjoyed the greater autonomy, variation, and creativity that jobs could provide. Many others were forced by economic necessity to work outside of their homes in routinized dead-end jobs with scarce assistance from governmental supports for day care, after-school programs, or elder care.
Women's work outside of the home helped to improve the standard of living for most families, but it did not compensate families for lost white male wages. Women's wage work imposes not only the obvious expenses of additional clothing and transportation, but also the costs of purchasing some of the goods and services that women previously produced at home free of charge, such as cooking, mending, cleaning, shopping, and child care. Those goods and services are crucial. Once they become commodified in the marketplace, they become expensive. The latest figures from Salary.com indicate that if a stay-at-home mother in the United States were replaced by paid domestic products and services, the cost would be $122,732 a year. The domestic products produced and services rendered by a mom who works outside of the home would cost $76,184 per year.
Even with women flooding into the labor force, families were still financially hurting. Working women had no time to perform full-time household labor and child care, and there was still not enough money for consumption. More money was accumulating at the top while the mass of Americans suffered from frozen wages. The wealthy then promoted the credit card to lend to Americans the money that they formerly would have earned in growing wages. Families became dependent on credit card debt. Since the interest rate on credit cards ranges from 15 percent to 25 percent, Americans descended into debt at record-breaking levels.
The living standard of Americans deteriorated psychologically as well. In American culture, women provide most of the emotional labor to make home a warm and comfortable place for men and children. It is women who usually arrange children's social lives and activities, from play dates to dental appointments. Women are usually the directors of adult social life as well. Indeed, women are usually in charge of emotional life for the entire family. The more women work outside of the home without social support in the form of child care programs and domestic help, the more stressed, overworked, and emotionally unavailable they become. Overwhelmed women have less energy for the roles of social director and organizer, as well as emotional and physical caregiver. Households are hurting emotionally. When Bush took office in 2000, he cut many of the already hobbled social programs that allowed families to survive. Families are in trouble.
Women are no longer willing to work outside of the home, do the lion's share of the domestic work, and simultaneously take care of their children's and husbands' physical and emotional needs largely unaided either by their husbands or by social programs. For the first time in American history, the majority of women are abandoning marriage. Women now initiate two-thirds of divorces. Half of first marriages and 60 percent of second marriages end in legal separation or divorce. These impressive figures do not include the many people who end their marriages outside of the legal system.
When men's emotional relationships with women break down, they have little intimate emotional support. Women usually count on other women to emotionally sustain them. Women still manage to befriend and support each other on a personal level in a way that few men can. These changes in households and family life are a third tributary to America's deluge of disaster. Americans have lost both the financial dream of ever-increasing prosperity and consumption, and also the emotional family dream of a stable family connected by a present wife creating emotional connection and domestic order. In short, Americans have lost what was the comfort of home.
4. Americans' Increasing Isolation from One Another
A fourth disaster is closely related. The freeze in U.S. real wages coincided with the beginning of Americans' increasing isolation from one another. Beginning once again in the 1970s, nearly all social connections between Americans declined. The decay in U.S. social life was an almost total phenomenon. It extended from inviting friends to dinner, to joining bridge clubs or bowling leagues, to volunteering for noncontroversial activities such as the PTA or Red Cross blood drives, to participating in more controversial activities such as working for a cause or a political candidate.
There was growth in social participation in evangelical religious groups; gay, lesbian, bisexual, and transgender (GLBT) groups; internet groups; and self-help groups. However, membership in self-help groups, America's greatest social participation growth area, was outnumbered two to one by drop-outs from bowling leagues alone, according to Robert Putnam's 2000 book, Bowling Alone, which I have drawn on for statistics throughout this section.
Several inconclusive theories have emerged as to why Americans have dropped out of U.S. social life and civic life.
Women dropping out of social activities because of working full time outside of the home accounts for only 10 percent of the overall dropout rate.
One might attribute U.S. social desertion to the phenomenon of busyness, but that too is an insufficient explanation. The average American watches four hours of television a day, which would be difficult to manage with an intensely busy schedule. The Internet may seem like a replacement for social interaction, but the Internet isolates people as well as connects them.
Extensive television viewing may be a culprit since more people relate to their television sets than to each other, and the heaviest viewing correlates to the least social participation. But surely this is a symptom as much as a cause of the problems that isolate Americans. I say this because extensive television viewing is reported by the viewers themselves as so unsatisfying that it leaves them "not feeling so good." Their descriptions portray it as an addiction that compels without satisfying. An overwhelming number of viewers watch for the purpose of distraction or entertainment. Television functions as an escape from loneliness, changed gender expectations, and looming economic disaster.
Perhaps the greatest reason is that Americans are psychologically and also physically exhausted. They have fewer vacations and longer workweeks than any of their Western European counterparts. Activity in society, including activity in politics, has become a luxury good for those fortunate few who have extra time and energy. The Left's natural constituency, the mass of Americans, is exhausted, disillusioned, and in despair. To add to their despair, the tremendous wealth at the top of society has been used to fund right-wing media outlets like Fox News, to name just one example. Right-wing media promote the idea that there is no alternative to the status quo. At the same time, the skewed distribution of wealth allows vast sums to be given to politicians who advance the fortunes of those who pay their way. Immense wealth is invested in weakening the regulations against enormous giving at the top. These developments increase the conviction that ordinary people make no difference in politics. They have no voice. The force of the Left is further weakened.
5. The Drugging of America
The fifth tributary that helped to create our deluge of disaster is both a cause and an effect of America's social breakdown. This is the numbing of Americans with psychotropic drugs. In 2006, Americans, who make up approximately 6 percent of the world's population, consumed 66 percent of the world's supply of antidepressants. In 2002, more than 13 percent of Americans were taking Prozac alone. Prozac is one of thirty available antidepressants. Anti-anxiety drugs, such as Zoloft, are so widely prescribed that in the year 2005, the $3.1 billion sales of Zoloft exceeded the sales for Tide detergent.
Many of these drugs, which are also called "cosmetic drugs" or "life-enhancing drugs," are diagnosed for loneliness, sadness, life transitions, or concentration on task performance. They have been "normalized" through extensive direct-to-consumer advertising and marketing to doctors who are financially rewarded for recommending them to colleagues. Regulations that once restrained the widespread promotion and sales of these powerful drugs have been relaxed to the point of near nonexistence. The United States is the only Western nation that permits direct-to-consumer drug advertising. We are also the only nation without price controls on drugs. Psychiatric drugs are so ubiquitous that the pharmaceutical industry is the most profitable industry in America, and antidepressants are their most profitable products.
What Can We Do?
The current disaster did not just happen with the recent burst of the stock market and housing bubbles. Americans somewhere knew for a long time that we could not pay our credit card bills or our mortgages. Somewhere, unconsciously, we had to know that disaster was approaching. We responded with denial, withdrawal, depression, and dissociation accomplished with the aid of extensive television viewing and preoccupation with scandals and celebrities.
Each of the five tributaries flowed together to drown the mass of Americans in debt, family dissolution, isolation, and drug-induced apathy. In response to the original questions that inspired this article, we now need to ask another question: what can we do about it? Americans may now be looking for change. They elected a president who promised change. That change has not happened. Where else can we look?
Capitalism needs and breeds consumerism. We are surrounded by advertisements for products. Ubiquitous advertising has a blighting side effect. The presentation of all human connection now carries a price tag for a branded product. Scenes of connection with a group of friends include, for example, Budweiser beer. The devoted mother is washing your clothes with Tide. The sexy woman, whom men want and women want to be, seems to come with the sleek Toyota. Ads appear whenever we turn on our computers or read newspapers or magazines. Product placement is present in almost every film. Television, America's mass entertainment, embraces product placement and explicit advertising directed to all ages. Capitalist consumerism coveys the message that relationships happen with and through products. There are too few scenes of people trying honestly to connect and surmount their real economic, social, and emotional problems through honest discussion and negotiation. We need more images of people who enjoy their connection and work through the difficult times involved in creating close, mutual, nurturing relationships. How do we manage to effect change within this environment? Where are the contradictions that create openings?
A Time When Noncommercial Values Are Attractive
One opportunity for change has emerged due to the recent capitalist collapse, which has intensified American suffering. People can no longer afford the brand-name products seen on TV. Their economic woes reveal the relentless hustling of now unaffordable consumer products. They try generics, unknown brands, and less consumption, and often find them just as good. This presents us with an opening to question. New, noncommercial values can form.
Since Americans are hooked on the mass media, and the media loves anything new, the Left can create media-attracting new actions. The anarchist group that formed around a book called The Coming Insurrection got full media attention when a well-publicized group jumped on stage at Barnes & Noble in New York for a spontaneous reading that began, "Everyone agrees it's about to explode." The action was widely covered for its novelty.
We can look to the four areas that have grown in the current social drought. They are, in order of their growth, self-help groups, internet groups, evangelical church groups, and GLBT groups.
Self-Help Groups
The largest self-help groups are Alcoholics Anonymous and Narcotics Anonymous. Alcohol and drugs have proved to be a personal and social disaster for millions of Americans, who cannot function on the job and suffer havoc in their personal lives due to these substances. Huge alcohol and pharmaceutical lobbies push these substances on individuals desperate for relief from their problems. The individual solution of self-medicating with drugs and alcohol-promoted so efficiently by capitalism-failed terribly. In the face of that failure, millions join together in small groups where they share their pain and suffering within a supportive, nonjudgmental collective that operates without salaries, advertisements, or financial charges. These twelve-step groups give the Left a window of possibility. We can add a thirteenth step to their twelve-step programs. We can add a step to organize against big pharmaceutical and liquor advertising, which profits on false promises. The Left desperately needs to address people's despair and give them support. We can learn to incorporate nonjudgmental personal and political support, as well as psychological and political dimensions, to Left groups where both nonjudgmental attitudes and psychological support have been sadly lacking. The Left has tried too hard to focus on being correct and not enough effort on reaching people where they are hurting. We need to listen to people without judgment as they do in twelve-step programs.
The GLBT Movement
We can also study the contradictions that helped to produce GLBT organizations. Advertising creates omnipresent images of happiness accessed though products that relate to sexual attractiveness. The sexy woman rides in the man's sleek new car. The virile man drives a big truck and smokes Marlboros. Multibillion-dollar industries such as the diet, cosmetic, and fashion industries promote products to enhance sexual attractiveness. Popular culture celebrates heterosexual coupling and family as ultimate happiness while avoiding mention of collective joys or homosexuality.
The GLBT movement works to include those in their identity group who are excluded from the grand celebration of personal couple happiness built around sexual pairing. The very pressure to channel complex desires into heterosexual coupling helped lead GLBT people to, as a group, articulate collective visions of resistance and envision new possibilities.
Since most families and relationships are breaking down, American people desperately need connection. Organizing creates connection. Collective dreams have a chance to replace the individualistic desires cultivated in capitalist America.
What We Can Learn From Evangelicals' Failures ... and Successes
Conservative evangelical groups create a collective vision and connection while celebrating capitalist success as God's blessing. They provide some of what people desperately need and the Left ignores, such as strong verbal support for important work in the home and a focus on the hard work of child rearing. Conservative evangelicals manage to accomplish this while sex role stereotyping that labor, as well as opposing every form of non-church-based material support that actually allows families to stay afloat. They typically oppose single-payer health plans, Head Start for all, sex education (unless abstinence-based), family planning, maternity and paternity benefits, minimum wage hikes, etc. In the end they cannot deliver the support that families need. The savior they pray to has not saved them from financial and personal desperation and divorce.
Evangelicalism's reduction of morality to personal morality and particularly sexual morality has an embarrassing side effect. Googling "evangelical scandals" results in 3,729,000 hits in five seconds. Evangelical scandals have resulted in reduced credibility. There is now an opportunity for the wider ethical spiritual morality of the community associated withTikkun and left-leaning evangelicals connected to Sojourners who develop their social, economic, personal, and political morality, and who see political activity as an expression of morality taken into the world. We on the Left have an opportunity to champion our own moral, ethical, and spiritual vision to Americans who desperately need both morality and hope for a better world. Evangelical promotion of the centrality of personal connection and family gives the Left an opening to advocate material and psychological support for all kinds of families. The Left urgently needs a family program to address the mass breakdown of U.S. homes and families.
The evangelical groups can, ironically show us what we are missing. The failure of evangelical morality, which excludes social, economic, and political morality, may create an opening for a much-needed left-wing program of social, political, economic, and personal ethics and morality for which many hunger.
Internet Organizing
There are explicitly political possibilities afforded by the net. MoveOn.org and other political groups organize and mobilize through the Web. In Iran, members of the opposition evaded censors, communicated with each other, and aroused national and international support through Twitter and Facebook. The Facebook account of Neda Soltani's murder focused Iran and the world on the violent repression of Mousavi's supporters. That possibility exists here.
The four social growth groups springing up in America's desert of political opposition point out possible avenues for a Left that desperately needs direction. Let us return to our original questions:
Why are Americans passive as millions lose their homes, their jobs, their families, and the American dream?
Why do Americans remain at home, disorganized, while their European counterparts flood into the streets in militant, organized protests? How did this happen? What forces are responsible? We can see that the cycles of capitalism with its relentless need for consumer spending and capital accumulation at the top have devastated America. We can also see that unbridled capitalism has created mass suffering and then turned the rage of those who suffer against all who need governmental assistance and against additional scapegoats such as homosexuals, feminists, liberals, socialists, and immigrants. We can create new roads to reclaim this nation by organizing and activating the mass of Americans who know that the ostensible "recovery" will never return what they have lost. We dared to elect a president who championed change verbally, who campaigned on unity and respect for all, and who preserves the structures that destroyed our lives. En masse, we have turned to self-help groups, evangelists, psycho-pharmaceutical drugs, and sexual identity politics, which do not solve the multifaceted crisis in which we are drowning. America needs another way. Perhaps we can provide it?
Harriet Fraad is a psychotherapist-hypnotherapist in practice in New York City. She is a founding member of the feminist movement and the journal Rethinking Marxism. For forty years, she has been a radical committed to transforming U.S. personal and political life.
February 1, 2010
Selling Sickness, Fast Food in Hospitals
By Jeffrey Dach
See original article here.
Peter Cram reported in JAMA that forty per cent of hospitals have fast food in the lobby. While you might consider this an outrage, the hospital probably considers it business as usual. Your hospital banned cigarette smoking long ago, yet still sends the message that fast food is healthy for you. In reality, fast food causes chronic disease, and a future source of new revenue for the hospital. For the hospital accounting department, this may not be a bad thing. Financial consideration, rather than the health of the community, is the over-riding factor. Untrained in medical nutrition, hospital accountants may not understand that fast food causes obesity, metabolic syndrome, insulin resistant diabetes, hypertension and accelerated cardiovascular disease.
Fast Food Causes Chronic Disease
Michael Pollen, a journalist and author of "In Defense of Food", and "Food Rules" says in a New York Times Editorial that fast food causes chronic disease, and "there's lots of money to be made selling fast food, and then treating the diseases that fast food causes. One of the leading products of the American food industry has become patients for the American health care industry".
Fast Food, Obesity and Chronic Disease
- What is the Evidence ?
You might ask, what is the evidence that fast food causes obesity and chronic disease? For starters. a 2004 study published in Lancet found that eating at a Fast Food restaurant causes weight gain and insulin resistance. The authors say,"fast foods contain large amounts of partially hydrogenated oils, and this class of fatty acids can cause insulin resistance and increase risk of type 2 diabetes. Fast food also contains large amounts of highly refined starchy food and added sugar, carbohydrates that have been characterized as high in glycemic index. Consumption of a high glycemic index or high glycaemic load diet has been linked to risk for diabetes, independent of bodyweight changes..."
Health Risks of Sugar Consumption - HFCS
Ignoring for the moment the hydrogenated vegetable oils in fast food which are an enormous health risk, let's focus on the sweeteners, the high fructose corn syrup used in fast food and soft drinks. The evidence linking massive amounts of sugar consumption to chronic disease is overwhelming.
Sugar Consumption is 70 pounds per year per person
High Fructose Corn Syrup is the preferred sweetener, refined from government subsidized corn and used for processed foods. HFCS is cheaper and sweeter than regular table sugar (sucrose), and it prolongs shelf life. High Fructose corn syrup is a 4.5 BILLION dollar industry, with our annual sugar consumption at 73.5 lbs per person. Now, thats a lot of sugar!
Refined Sugar - Sucrose - is an Addictive Drug
Some scientists say that refined table sugar (sucrose) is not food, and should be reclassified as a drug capable of producing craving, withdrawal effects and addiction. A 2002 Princeton study showed addictive behaviors in rats given intermittent high sugar intake. A 2008 report in NeuroScience examines the evidence for addiction associated with intermittent excess sugar intake.
The scientific evidence of sugar addiction is summarized nicely by Kathleen DesMaisons, Ph.D., author of The Sugar Addict's Total Recovery Program, and Potatoes Not Prozac. Her program, called Radiant Recovery, is dedicated to helping people overcome sugar addition.
HFCS- Comparing Fructose to Glucose
Chemically speaking, HFCS is a mixture of 55% fructose and 45% glucose, a ratio intended to mimic common table sugar, called sucrose. Sucrose is a simple molecule made of one fructose and one glucose molecule, so the corn industry can say that
sucrose and HFCS are the same stuff. Of course this is partially true, but there is a difference. Firstly, HFCS has 10% more fructose than table sugar. Secondly the fructose in HFCS is absorbed into the bloodstream more rapidly, since the body must first cleave apart sucrose with enzymatic digestion, after which, the liberated fructose can be absorbed into the bloodstream. Once absorbed, fructose and glucose are metabolized quite differently.
IV Glucose is OK, IV Fructose is NOT OK.
Intravenous glucose is commonly given to patients in the hospital to sustain life. There is no IV fructose in the bag, however. Why is this? Because IV fructose is dangerous.
Health Risks of Fructose in Fast Food Sodas
In small amounts, fructose has always been a healthy part of human diet in fruits and vegetables. However, large amounts of fructose poses a serious health risk. Unlike glucose, fructose cannot be used by the body. Instead, it must be processed in the liver where it is uncontrollably converted into fat particles, triglycerides and atherogenic lipids. This causes insulin resistant diabetes, hypertension and cardiovascular disease. Thus, fructose is considered more dangerous and harmful than plain old glucose. Fructose also causes abnormal lipid panels in obese kids, who may then be given statin drugs. Wouldn't it make more sense to cut out the fructose instead?
One in Five Teens have HIGH Cholesterol
A recent CDC report raises alarms about increasing teen obesity and high cholesterol found in 20% of kids. The CDC report went on to recommend that doctors adhere to guidelines calling for statin drugs for kids with high cholesterol.
Surely You Must Be Joking - Statins for Kids?
In 1998, the American Academy of Pediatrics convened a Committee on Nutrition to discuss "Cholesterol in Childhood " which published guidelines for treating kids with statin drugs for high cholesterol. The guidlines were revised in 2008 by Dr Stephen R. Daniels, causing a national uproar. Apparently, Daniels and co-authors had undisclosed ties to Merck, maker of statin drug Mevacor.
NO Medical Studies Showing Statins Benefit Kids
The problem with cholesterol guidelines for kids is absence of any medical data showing benefit from statin drugs in this age group. Alternatively, we have plenty of evidence that statin drugs cause harmful adverse side effects, especially considering a child starting statins is committed to 40 years of drug treatment. Articles promptly appeared in the media and medical literature (Storm over Statins) raising opposition and creating backlash against the guidelines for statin drugs for kids. In view of what we know about Fast Food causing teen obesity and abnormal lipid panels, it would seem the height of absurdity to give kids statin drugs, rather than address the fast food and soda pop diets.
Fecal Contamination of Soda Fountains
Another problem with fast food in the lobby, is fecal contamination of soda fountains, reported in the Jan 2010 issue of the International Journal of Food Microbiology.
Take Action ! Make a copy this article and give it to your local congressman, or hospital board member.
Is Eating Sugar Really That Bad for Us?
By Anneli Rufus, AlterNet
Posted on January 27, 2010, Printed on February 1, 2010
http://www.alternet.org/story/145367/
Want to gross yourself out? Imagine eating eight teaspoons of sugar straight out of the bag. Yeek, right? That's how much sugar is in a can of Coke. A Grande Vanilla Starbucks Frappuccino has 11. A McDonald's Strawberry Triple Thick Shake has 27.
The American Heart Association's latest guidelines stipulate that a moderately active woman should eat no more than six teaspoons of sugar per day; her male counterpart no more than nine. Yet according to the AHA's latest statistics, the average American devours 22, and the average teenager devours 34.
Sugar is being blamed far and wide for the catastrophic rise in obesity, diabetes and cardiovascular disease -- not to mention acne and tooth decay. In his bestselling bookAnticancer: A New Way of Life (Viking, 2009), Doctors Without Borders cofounder David Servan-Schreiber avows that refined sugars "directly fuel the growth of cancer." Killjoy. I gave up sweet drinks years ago, but I would live on ice cream if it wasn't so embarrassing.
It's a biblical-sounding question: Can something that tastes like heaven really be so bad? But this begs further questions: Good for whom? Bad for whom? Precisely how? Well, we know it's good for business. Soft drinks represent a $115 billion industry in this country. Candy represents a $32 billion industry. (Americans spend $2 billion on Halloween candy alone.) According to the Centers for Disease Control, the annual cost of treating obesity-related medical conditions topped $140 billion in 2008, having nearly doubled in the previous decade. Diabetes isn't simply a matter of insulin injections. Blindness and amputations, anyone?
Like any territory where our bodies and other people's profits intersect, sugar is a battlefield.
We enter that fray within hours of being born.
"When a brand-new baby is struggling to make sense of this scary world," says nutrition therapist Elyse Resch, coauthor of Intuitive Eating (St. Martin's, 2003), "the first thing it tastes is breast milk or formula." Both fluids are rich in lactose, a disaccharide containing glucose, which the human body requires for survival; it's our cells' chief energy source. "Tasting that sweetness," Resch says, "what's the baby going to think? 'Hey, every time I eat this, I'm going to get really calm and my tummy's going to feel better and I'll be happy.'"
But somewhere between the nipple and the artisanal chocolate, we transfer our affection from lactose to other sweet-tasting chemical compounds derived from other sources; mainly sugarcane, corn, beets and fruit. Although each of these sweeteners -- too often collectively called "sugar" or "sugars," which has traditionally landed sucrose, aka white sugar, with most of the bad rap -- possesses a different chemical makeup, all of them contain a certain percentage of glucose. When sugar enters the bloodstream during digestion, the pancreas releases insulin, a hormone that regulates the blood-sugar level by allowing cells throughout the body to absorb and use the glucose. Frequent deluges of glucose wreak havoc on blood-sugar levels. When an overwhelmed pancreas produces little or no insulin or the cells stop responding to whatever insulin is produced, glucose builds up in the bloodstream. That's what we call diabetes.
And because the refining process strips away all enzymes, vitamins, minerals, fiber and other nutrients, refined sweeteners comprise nothing but empty calories. The body can metabolize these sweeteners only by drawing upon its own micronutrient storehouses: in other words, by draining its reserves. This process hinders the body's ability to metabolize fatty acids; increased fatty-acid storage leads to obesity.
In which case, refined sugars aren't just not food. They're arguably antifood.
"A lot of things being sold as foods have low or zero nutritional value aside from calories," says Joel Kimmons, a nutritional epidemiologist with the CDC's Division of Nutrition, Physical Activity and Obesity. "From a health and culinary perspective, the foods that we feed our children, our families and ourselves need to have more than calories -- they should include a wide variety of vitamins, minerals, protein, phytonutrients and fiber. The problem with sugar and other refined foods is that they dilute the nutritional content of your diet overall. It becomes more difficult to meet your nutritional requirements within your calorie limits every time you add sugar."
Yet we add so much. Those 22 teaspoons a day -- which comprises all sweeteners put into foods during processing and preparation by the manufacturer and the consumer -- amount to 156 pounds per person per year, according to the USDA. This figure is "shocking," avows Anticancer author Servan-Schreiber, railing against what he calls "the sugar boom" and noting that in 1830, the average American ate only 11 pounds of sugar a year.
Right, but it's everywhere. (Every four grams of sugar, as listed on food labels, equals about one teaspoonful.) And it goes by so many names. Maltodextrin, rice syrup, dextrose, galactose -- to choose from two dozen. Especially ubiquitous, in a country whose government subsidizes corn production, is high-fructose corn syrup (HFCS), a lower-cost alternative to cane sugar that was first developed in the 1950s, entered the processed-food scene bigtime during the late 1970s, and now represents between 40 and 50 pounds of our annual 156.
Many food activists, including Michael Pollan, point damning fingers at the fact that the industrialized world's recent rise in obesity coincides with the mainstreaming of HFCS. For this, many blame HFCS's high fructose content: 55 percent as compared to white sugar's 50 percent. Several studies, such as one performed at the University of Texas in 2008, suggest that fructose metabolizes differently than glucose does and transforms into body fat much more rapidly than glucose does. Yet many, including a 2007 University of Maryland project, argue the opposite. "Based on the currently available evidence," reads the Maryland report, "the expert panel concluded that HFCS does not appear to contribute to overweight and obesity any differently than do other energy sources."
In any case, the corn industry has a powerful public-relations department that, based on past experience, will track me down and send me another stern-but-upbeat missive in 3, 2, 1 denouncing HFCS's bad press and insisting that, as cited on the industry's Web site,SweetSurprise.com, "High fructose corn syrup is simply a kind of corn sugar. It has the same number of calories as sugar and is handled similarly by the body."
The corn industry's basic line is that HFCS "is no worse than sucrose," aka white sugar, says the CDC's Joel Kimmons. "The error they're making is in saying, 'We're just as good as sucrose.' Sweeteners are a problem simply because they provide calories without the concomitant required nutrients. Some researchers suggest that problem with sugar is fructose," which has been blamed not just for weight gain but also for illness; one 2008 University of Florida study links fructose consumption with liver disease; a University of Cincinnati study that same year links it with kidney disease and hypertension. A study published last year by the Minneapolis-based nonprofit Institute for Agriculture and Trade Policy reported detectable levels of mercury in 17 out of 55 food products containing HFCS that had been purchased the previous year. Even what appears innocent probably isn't: While the body can easily handle the amount of fructose in a single piece of actual fruit, fruit juices -- even those without added sweeteners -- are a different story.
Kimmons says HFCS is probably not handled much differently by the body than sucrose, given the similarity between the molecular makeup of both sweeteners. "However, the functional properties of HFCS have led to its being in all sorts of foods into which traditionally we would never consider putting a sweetener. It's even in bread," Kimmons laments.
HFCS's texture allows it to be used in ways that sugar can't.
"In addition to providing sweetness," we read at SweetSurprise.com, HFCS "gives chewy breakfast bars their soft texture and also protects freshness. High fructose corn syrup keeps products fresh by maintaining consistent moisture."
A five-minute wander through my own kitchen reveals the presence of HFCS or just-plain-corn-syrup in seven different "savory" products, including Del Monte tomato sauce and a loaf of Old Country Round Top Wheat & Bran Bread.
Now I'm officially depressed.
Because I have a relationship with sugar. Sweetness means more to me than other flavors, for better or worse. Like most Americans, I was raised to cherish sugar, anticipate sugar and crave sugar as a reward, a prize, a balm for broken hearts and shattered self-esteem. At the exact same time, like most Americans, I was raised to fear sugar, loathe sugar and shun sugar as a poison, a fattener, an uglifier and thus ruiner of (especially female) lives. The first half of that equation has evolutionary roots. Forced to submit to four actual seasons, our rural ancestors instinctively gorged on fruit, honey and the "fat of the land" at harvest time, packing on enough pounds to carry them through nutritionally sparse winters. Those with the keenest appetite for sweets ate the most, thus gained the most, thus were likelier to survive and reproduce than their skinny sweet-shunning neighbors.
The second half of that equation -- sugar as the core of what some would call addictions -- "is what happens when we start to believe that an innate pleasure is forbidden," saysIntuitive Eating author Elyse Resch. As infants, we learn to love lactose. "Then in childhood they soothe you by giving you lollipops. Families celebrate special times by going out for ice cream. Growing up, we learn that sugar soothes us and cheers us up, because it drives the serotonin in the brain. But then at a certain point you're told, 'No, you can't have it.' And the more you're told you can't have something, the more you want it."
This is what eating disorders look like. Liberation comes when we release the notion of can't-have-it, Resch says, and instead learn to read our cravings carefully. And even though we imagine that we'll want a whole box of Mystic Mints, she says that nine times out of 10 we really won't.
"I was the diet queen in my twenties," says Resch, who is now 64. "I binged. I ate those seven cookies in a row. I've been there, but I know that the obsession can go away, along with the worry and the desperation. We have such tremendous wisdom within us. If we listen, it will let us know what we want and why we want it, especially if we're not acting out of desperation and rebound and we're not trying to control ourselves. Your body knows that you're not going to feel well if you eat what you don't need. And if you're truly listening to your body, you're not going to want a lot of sugar. Maybe a little bit with a meal or after a meal, but that's okay, because I really don't think sugar is all that bad for you. I like sugar, and I have sweets throughout the day -- okay, not candy bars for breakfast," Resch says, but she highly recommends Trader Joe's Old-Fashioned Cinnamon Grahams.
"I work with a lot of people who describe themselves as not being able to control their cravings for sugar," says nutrition therapist Karen Scheuner, who helps clients with eating disorders at the My Weigh therapy center in Oakland, California. "It is clear that food marketers do a really good job of priming us to crave sugar in the sense that it is ubiquitous, easy to buy and relatively cheap. On one hand our culture tells us to eat it, and on the other, it tells us to feel guilty for having eaten the chocolate cake. ... Sugar is both widely abundant and forbidden," Scheuner says.
Given that I have suffered so much for sugar, and given that I work so hard to compartmentalize it, making the absolute most of it in highly regulated small amounts, exalting over the half-brownie or lone macaroon with the rigid-backed rapture of the former anorexic, given that my isolated rendezvous with sweetness dot my waking hours like shiny, tiny holidays, I need to know what is sweet and what is not and I resent sugar's intrusion into non-treat foods. Special K, indeed. For someone with my history, it amounts to a violation, a kind of assault.
Being force-fed fructose is offensive enough. But -- not to sound elitist or anything -- the monosaccharide fructose simply doesn't taste as good as the disaccharide white sugar and not nearly as good as more expensive and boutique sweeteners such as raw sugar, brown sugar, maple sugar, honey, agave nectar and yacón syrup. (Refined honey, by the way, has more calories than table sugar and about the same nutritional value, which is basically nil.)
Agave nectar in particular is gaining ground amid the storm of controversy surrounding sucrose and HFCS. Refined from the sap of the flower-stalk of a spiky succulent native to central Mexico and better known stateside as the century plant, agave is the current darling of health-conscious chefs such as Sharon Fernandes, co-owner of the Germantown, Tennessee-based Stonehouse 27 spice company. Fernandes decided to use agave in her home kitchen and then in her line of Indian cooking sauces "after I started reading food labels when my daughter was young. I realized that every single thing I'd been buying at the store had high-fructose corn syrup in it. Everything was corn, corn, corn and more corn. I had to offer the public something different, and I thought pure agave nectar was just beautiful." Its texture evokes liquid velvet. Its flavor is oddly light and neutral: sweetness spoken as Hello, there rather than a shout. Hailed as a godsend for diabetics because of its low glycemic index, agave is nonetheless higher in fructose than HFCS.
First admitting, then appreciating the differences in flavor is a key to reducing sugar consumption, says Mireille Guiliano, bestselling author of French Women Don't Get Fat: The Secret of Eating for Pleasure (Knopf, 2004).
"Learn to enjoy the first three bites. That's all you need. Eat slowly, savor. The bad sugar is in sodas, cakes, cookies -- all the stuff with HFCS. Read labels and don't buy anything with HFCS. It's poison," Guiliano tells me. "If you eat the bad stuff ... your body will go into a sugar crave that can last a few hours to a few days. So think before you eat, pay attention to how fast you eat and remember that once you start eating, your brain, not your stomach, will signal satiety. Twenty minutes is required for the stomach to feel full and since most people gulp down the sweets much faster, it wastes calories and makes you fat."
"On the other hand, don't fool yourself and believe you can do totally without sugar -- most people can't," she says. "If you like chocolate, try a little square at the end of a meal and have dessert once in a while." Echoing Intuitive Eating author Resch, Guiliano adds: "The important thing is to not consider sugar as a temptation or 'guilty pleasure,' as some would say -- though not a French woman. If you look at sweets that way, you'll crave them even more and give in easily. Find a balance and remember: If you have dessert tonight, then no pain au chocolat for breakfast tomorrow. It's doable with a little practice."
Guiliano recommends honey "because it's so sweet, as well as divinely flavorful, [so] you can use less -- in my case, about half the amount of processed sugar."
That's what all this advice from everyone except the soft-drink, fast-food, candy and corn industry boils down to: using less. In urging us to go from 22 teaspoons of sugar per day to six or nine, the American Heart Association is asking us to cut down on sugar by 70 percent. We can try. But manufacturers shouldn't make it so difficult, sneaking sugars into everything from salad dressing to breakfast cereal and using cheap, zero-nutrition sweeteners as virtual filler. We could refuse to buy those products, or those companies could be pressured in other ways. A tax on anything containing more than four grams of sugar per serving, anyone?
Anneli Rufus is the author of several books, most recently The Scavenger's Manifesto (Tarcher Press, 2009). Read more of Anneli's writings on scavenging atscavenging.wordpress.com.
Published on Monday, February 1, 2010 by Politico.com
CIA Operatives Moonlight in Corporate World
by Eamons Javers
This article is adapted from the author's forthcoming book, 'Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage .'
In the midst of two wars and the fight against Al Qaeda, the CIA is offering operatives a chance to peddle their expertise to private companies on the side - a policy that gives financial firms and hedge funds access to the nation's top-level intelligence talent, POLITICO has learned.
In one case, these active-duty officers moonlighted at a hedge-fund consulting firm that wanted to tap their expertise in "deception detection," the highly specialized art of telling when executives may be lying based on clues in a conversation.
The never-before-revealed policy comes to light as the CIA and other intelligence agencies are once again under fire for failing to "connect the dots," this time in the Christmas Day bombing plot on Northwest Flight 253.
But sources familiar with the CIA's moonlighting policy defend it as a vital tool to prevent brain-drain at Langley, which has seen an exodus of highly trained, badly needed intelligence officers to the private sector, where they can easily double or even triple their government salaries. The policy gives agents a chance to earn more while still staying on the government payroll.
A government official familiar with the policy insists it doesn't impede the CIA's work on critical national security investigations. This official said CIA officers who want to participate in it must first submit a detailed explanation of the type of work involved and get permission from higher-ups within the agency.
"If any officer requests permission for outside employment, those requests are reviewed not just for legality, but for propriety," CIA spokesman George Little told POLITICO.
There is much about the policy that is unclear, including how many officers have availed themselves of it, how long it has been in place and what types of outside employment have been allowed. The CIA declined to provide additional details.
Generally, federal employees across the vast government work force are allowed to moonlight in the private sector, but under tight guidelines, that can vary from agency to agency, according to the federal Office of Government Ethics.
"In general, for most nonpolitical employees, they may engage in outside employment, but there are some restrictions," said Elaine Newton, an attorney at the Office of Government Ethics. She explained that agencies throughout the federal government set their own policies on outside employment, and that they all typically require that the employment not represent a conflict of interest with the employee's federal job and that the employee have written approval before taking on the work.
But the close ties between active-duty and retired CIA officers at one consulting company show the degree to which CIA-style intelligence gathering techniques have been employed by hedge funds and financial institutions in the global economy.
The firm is called Business Intelligence Advisors, and it is based in Boston. BIA was founded and is staffed by a number of retired CIA officers, and it specializes in the arcane field of "deception detection." BIA's clients have included Goldman Sachs and the enormous hedge fund SAC Capital Advisors, according to spokesmen for both firms.
BIA has employed active-duty CIA officers in the past, although BIA president Cheryl Cook said that has "not been the case with BIA for some time."
But the ties between BIA and the intelligence world run deep. The name itself was chosen as a play off CIA. And the presence of so many former CIA personnel on the payroll at BIA causes confusion as to whether the intelligence firm is actually an extension of the agency itself. As a result, BIA places a disclaimer in some of its corporate materials to clarify that it is not, in fact, controlled by Langley.
BIA's clients can put the company on a retainer for as much as $400,000 to $800,000 a year. And in return, they receive access to a variety of services, from deception detection to other programs that feature the CIA intelligence techniques.
In one presentation in 2006, BIA personnel promised to teach managers at a leading hedge fund some of the CIA's own foolproof techniques.
The presenters that day at SAC Capital Advisors in Stamford, Conn., included two women with backgrounds in intelligence. One spent 20 years with the CIA, specializing in polygraph, interviewing, and deception detection. The other had more than 25 years of interrogation experience.
In their intensity, they reminded one person in the room of Clarice Starling, the no-nonsense FBI agent played by Jodie Foster in the movie "The Silence of the Lambs": "You could tell they knew exactly what they were doing."
The tactics that BIA officials such as these teach hedge fund clients are based in a program it calls "Tactical Behavior Assessment.".
Unlike polygraph machines, the TBA technique allows examiners to work without hooking up their subject to a series of wires. The subject never knows he's being scrutinized.
Polygraph machines work by measuring a person's physical responses, such as heart rate, that indicate stress. Analysts using the machine need to sit with their subject for a long time. They have to establish a person's physiological baseline, so they begin with a "control" conversation about neutral topics, before they can begin grilling the subject. Conducting an interview and doing a thorough analysis of polygraph results can take hours.
TBA focuses on the verbal and nonverbal cues that people convey when they aren't telling the truth. Psychologists familiar with the method say it works because human beings just aren't hard-wired to lie well. Holding two opposing ideas in your brain at the same time - as you have to do in order to tell a lie - causes a phenomenon they term "cognitive dissonance," which creates actual physical discomfort. And when people are uncomfortable, they squirm. They fidget ever so slightly, they pick lint off their clothes, they shift their bodily positions.
Agents look for the physical indicators of lying. They watch for a person shifting anchor points. If the person is leaning forward on one elbow, does he switch to the other one? Interrogators watch for grooming gestures such as adjusting clothes, hair or eyeglasses. They look to see if the person picks at his fingernails or scratches himself. They watch for the person to clean his surroundings - does he straighten the paper clips on the table or line up the pens? If he does, he could be lying.
To obtain verbal clues, agents listen for several kinds of statements. They'll listen for qualifying answers, phrases that begin with words like "honestly," "frankly" or "basically." The agents will be listening for detour phrases like "as I said before ..." They'll want to hear if the person invokes religion - "I swear to God" - or attacks the questioner: "How dare you ask me something like that?"
Other red flags: Complaints -"How long is this going to take?" Selective memory -"To the best of my knowledge." Overly courteous responses -"Yes, sir."
BIA doesn't just offer training, though. For a fee, its officers do the analysis themselves.
Often, BIA deploys its CIA-trained operatives to analyze quarterly corporate-earnings calls. Those conference calls are an important Wall Street ritual that serves as a direct line from the corporate boardroom to the trading floor.
Companies use the calls to put the best spin on the events of the quarter and give investors a sense of the way ahead. Analysts for top-of-the-line investment houses use them to ask probing questions of senior management.
And BIA uses them to figure out if the company may not be disclosing the truth - all with the help of the CIA-trained analysts.
In one particular instance in August 2005, Hong Liang Lu, the chairman and CEO of a company called UTStarcom, walked through the numbers with a telephone audience of Wall Street investment bankers. With his slicked-back hair, rimless glasses and wide smile, Lu projected an image of intelligence and competence.
And as he began the call, Lu couldn't know that it also was being patched into a room thousands of miles away where interrogators trained in CIA-style techniques would analyze each inflection in Lu's voice. The analysts were human lie detectors, working for BIA. They were trying to find out whether Lu was telling the whole truth about UTStarcom's financial health.
When they came to their conclusion, they'd report it to BIA's client, an enormous hedge fund. The secret intelligence they produced would help the hedge fund decide whether to buy or sell UTStarcom stock. If the intelligence analysts did their jobs, the hedge fund would be far ahead of the rest of the market.
The information they gleaned from this phone call could be worth millions of dollars.
The company Hong Liang Lu ran sells broadband, wireless and hand-held Internet equipment and technology around the world. It had generated more than $700 million in revenue that quarter, and although it was still losing money, that performance was good enough to bring it close to profitability. The company thought the results were positive, and the CEO seemed optimistic.
Investment analysts from Bank of America, Smith Barney, Deutsche Bank and other Wall Street powerhouses were the official participants in UTStarcom's call. The analysts prepared their best questions to help them figure out the answer to one big question: Would UTStarcom emerge as a hot stock in the third quarter?
After some opening remarks, Lu threw open the session to questions from the Wall Streeters. One of them, Mike Ounjian, a keen-eyed analyst with Credit Suisse First Boston, asked about potential problems he'd spotted with how the company's income was being counted in the books, a process known as revenue recognition.
There seemed to be a backlog in the recording, and Ounjian wanted to know why. If the problems were serious, they could affect the company's financial results in the next quarter and might cause the stock price to dip.
"Are there any issues related to recognizing revenues on these?" Ounjian asked.
The voice of Michael Sophie, then the company's interim chief financial officer, came over the phone line: "Yes, with the backlog, the vast majority of the wireless backlog is clearly PAS [an acronym for one of the company's products, Personal Access System]. I think you saw the announcement at the end of June where we announced on the PAS infrastructure orders in China. And again, it's just the timing of deployment and achieving final acceptance, we've also got some CDMA [an acronym for a type of mobile phone standard] to a lesser extent in the backlog. ... But Q3 is clearly a little more handset-oriented than we would typically run."
After analyzing the call, BIA's employees supplied a 27-page confidential report to their client, and they singled out Sophie's response to the question about revenue recognition for particular attention. They noted that Sophie qualified his response and referred back to another announcement from the end of June.
BIA called that kind of conversational reference a "detour statement," and its analysts were convinced that Sophie was trying to minimize the delays. "Mr. Sophie avoids commenting on any issues related to revenue recognition, and his overall behavior indicates that revenue recognition problems cannot be ruled out."
Overall, BIA's team rated the second-quarter conference call as a "medium high level of concern"- the same rating they'd given UTStarcom's call the quarter before. This time, though, the BIA team found more problems, which they listed in a box on the first page of their report: "Lacks Confidence," "Underlying Concern," "Avoids Providing Information."
In their conclusion, the BIA team said they'd found that the executives were worried about the timing of the company's profitability date and the issue of revenue recognition. The report says: "Management's behavior indicates that they will post poor third-quarter results, and it is also highly unlikely they will achieve profitability in the fourth quarter."
It might not seem like much, one take on whether the company will do well in the next six months. But to hedge-fund investors - who are looking for ways to make money off of falling stocks by selling short - that is valuable information indeed.
BIA's client had no way of telling whether the deception analysis report was accurate or not. It was the client's job to take the report, combine it with other information known about UTStarcom and make a bet for or against the company. And there's no evidence that UTStarcom officials weren't being truthful during the call.
With the benefit of hindsight, though, it's possible to go back and check the record to find out what did happen to UTStarcom stock in the weeks after the call.
It turns out that any investor who shorted UTStarcom at the time BIA submitted its report would have been in a position to reap substantial gains.
Over the next month or so after the call of Aug. 2, UTStarcom's stock price lost about $1 per share, a nice win for any short seller. But on Oct. 6, 2005, the company released its third-quarter results, shocking Nasdaq traders with numbers that were below the guidance executives had offered during the conference call. In October, UTStarcom said it expected total revenues of between $620 million and $640 million, compared with its previous target of $660 million to $680 million. The next morning, investors frantically sold their shares: more than 23 million transactions took place on Oct. 7, 2005.
A day after the third-quarter results were released, the stock was down roughly an additional $2, closing at $5.64. It had been at $8.54 when the BIA team listened in on the conference call in August and flagged the potential problems with revenue recognition.
And what reason did UTStarcom give for its poor third-quarter performance? It disclosed difficulties with revenue recognition.
The Annotated Obama
By Joe Bageant
Jocotepec, Mexico
I've managed to sit still through a few state of the union speeches, through the remarks of Kennedy, Johnson, Nixon, Ford, Carter, Reagan, one Bush (the pappy, I never could gut out one of The Dub's ) and a Clinton. Brother Clinton finished me off, made me give up on state of the union speeches altogether.
Still, there was the off chance (OK, vain hope) that Obama might come out swinging in the wake of the Massachusetts massacre and the Supreme's recent sale of Congress to corporations. As in: The senator from Wal-Mart now has the floor. So I poured myself a stiff one and fell into a deep cush recliner in front of a mongo brain-wrapping TV screen. Not that I would ever own one, mind you. I watch it at my friend and fellow writer Fred Reed's house. That way he gets the rap for being a torpid brainwashed American pig.
Obama's opener was predictable enough, the obligatory patriotic reference for the blood and balls crowd:
... when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach ...
Then came the hearkening back section, in this case to 1965, a time when blacks had hope and liberals had a few guts:
... and civil rights marchers were beaten on Bloody Sunday ...
More than half of Americans were not yet born in 1965, and four fifths surely have never heard of Bloody Sunday at Selma. But what the hell, it's a speech, right?
And again, we must answer history's call ...
Along with millions of other cranky old lefties, I wanted to scream back, Then pick up the fucking phone, damn ya!
And of course there were references to heartland towns, to show he can at least name a few:
... in places like Elkhart, Indiana and Galesburg, Illinois.
And he reminded us of the many nights he spends in the Lincoln room crying over the mail:
... letters I read each night. The toughest to read are those written by children ...
And, as always, the American people are resilient, industrious folks living in Norman Rockwell's world:
... they remain busy building cars and teaching kids, starting businesses and going back to school. They're coaching Little League and helping their neighbors. ... I have never been more hopeful about America's future than I am tonight.
Are we living in the same country here, guy? But shsssh! At last! He's talking the economy. My man is gonna get down and grit with the peeps. Talk some real meat here.
It all begins with our economy. Our most urgent task upon taking office was to shore up the same banks that helped cause this crisis.
Wait, back up there big fella. Why?
It was not easy to do. And if there's one thing that has unified Democrats and Republicans, it's that we all hated the bank bailout.
That kicked off my little inner bullshit detector, the one that speaks in translative tongue. And the translation was: However, we of both parties all asked ourselves, do we really have the ass to take on the big money? The guys who pave the campaign trail with the bucks? No way Jose!
Obama rolls on.
So I supported the last administration's efforts to create the financial rescue program. And when we took the program over, we made it more transparent and accountable.
Huh?!!!
As a result, the markets are now stabilized, and we have recovered most of the money (the printing presses are white hot as I speak) we spent on(handed over to) the banks.
To recover the rest, I have proposed a fee on the biggest banks.
Which will be passed on to their customers.
... if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them.
Pardon me, but we don't remember ever being asked if we wanted to throw the rich bastards a line.
... we extended or increased unemployment benefits for more than 18 million Americans ...
This is progress? It's like creating more soup lines.
We made health insurance 65 percent cheaper for families who get their coverage through COBRA.
COBRA costs 12 grand a year for crying out loud! You're still talking $5,500 a year for unemployed folks, uh, between jobs, people who are going to remain there unless the Chinese start a work visa program for them. COBRA?
Let me repeat: we cut taxes. We cut taxes for 95 percent of working families.
Who just happen to be making less taxable dollars than ever.
We cut taxes for small businesses.
Which are in the shitter, thus making less taxable dollars.
We cut taxes for first-time homebuyers.
Assuming they can to get a bank to un-ass the money so they too can go in hock the rest of their lives.
We cut taxes for parents trying to care for their children.
Does that include the 46 million working class Americans who don't make enough money to pay taxes at all? Much less need a tax cut?
And we haven't raised income taxes by a single dime on a single person. Not a single dime.
I'm doing my taxes next week. Care to lay folding money on that statement? I'm reading your lips.
Because of the steps we took, there are about 2 million Americans working right now who would otherwise be unemployed.
They were lucky enough not to be fired. So you get to claim anyone who still has a job?
Economists on the left and the right say that this [stimulus] bill has helped saved jobs and avert disaster.
They also tend to agree that it is building an even bigger coming disaster in the process – debt collapse.
Now, the true engine of job creation in this country will always be America's businesses.
Those same folks you see cheerily waving at us from Seoul and Shenzhen.
But government can create the conditions necessary for businesses to expand and hire more workers.
Hmmm... Maybe in FDR's time. But recent administrations have damn well proven to be capable of blowing our jobs out of the water. Can't you just do whatever the Clinton administration did -- but do it in reverse?
We should start where most new jobs do -- in small businesses.
Where benefits are the least or nonexistent, the pay is lowest and the jobs most insecure ...
So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid
the funny money we've printed up for them
and use it to help community banks
the local banking hustlers who never managed to sell their banks to Citicorp or Capital One while the selling was good.
... While we're at it, let's also eliminate all capital gains taxes on small business
Who knows, we may even get two or three Rotary Club Republicans to vote Democratic next time.
Next, we can put Americans to work today building the infrastructure ... railroads to the interstate highway system ...
But isn't the effectiveness of those things predicated upon manufacturing something, having something to ship around?
... time to finally slash the tax breaks for companies that ship our jobs overseas
The horse has left the bar Nellie, but if we close the barn door the rest of the world might not notice they are gone. Maybe even loan us a few more bucks.
I do not accept second place for the United States of America.
Second place? We're number one in external world debt per citizen ($7,000 a head). But yeah, we're ninth in education in the industrial world, and battling Brazil and Mexico for the biggest net debtor nation slot. Which is its own sort of number one.
Look, I am not interested in punishing banks ...
Why the hell not? They stole billions. We proles get beat up for a $50 IRS bill.
I'm interested in ... [channeling] the savings of families into investments that raise incomes.
I thought we already tried that and got robbed by the Wall Street syndicate. Or are you talking buying each family a vegetable cart to put on the street in their off hours?
We need to make sure consumers and middle class families have the information they need to make financial decisions.
We tried that too. And we got mugged by Merrill Lynch, Smith Barney and that guy on Law and Order, Sam Waterson, who's still hawking discount brokerage for T.D. Waterhouse.
We are creating more clean energy and clean energy jobs.
Now yer talkin!
But to create more of these clean energy jobs, we need more production, more efficiency, more incentives. That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development.
In other words, drill and nuke until the green starts showing.
Third, we need to export more of our goods.
So we will buy them from China, ship ‘em to Cleveland, then export them again. Twenty million new jobs in shipping and export!
To help meet this goal, we're launching a national export initiative that will help farmers ...
Help corporate midwestern Republican corn growers and Archer Daniels Midland get bigger subsidies
and small businesses
assembling Chinese electronic parts in American maquiladoras
increase their exports... Fourth, we need to invest in the skills and education of our people.
Awwwww right!
To make college more affordable, this bill will finally end the unwarranted taxpayer subsidies that go to banks for student loans.
No longer will we let the banks run access to higher education into a racket. You the people must come up with the full freight from here on out. Or simply do it the good old American way. Hock your house. If you still have one. Which still puts the juice in the same bankers' hands. But with different paperwork.
Instead, let's take that money and give families a $10,000 tax credit for four years of college
like we all make enough to owe that kind of geet.
... and increase Pell Grants ...
Just make sure you print enough greenbacks to cover the current 18 billion Pell Grant shortfall.
And let's tell another 1 million students that when they graduate, they will be required to pay only 10 percent of their income on student loans ...
Let's see now, at 10 percent of say, 35K a year if the kid is lucky enough to find a reasonably good job by current standards, it shouldn't take more than a few decades to pay off that $50,000 education bill, which, with compound interest runs at least $80,000. Not as good for bankers as the old student loan racket, but nothing to piss at either.
... and all of their debt will be forgiven after 20 years
for those whose degree amounted to a lifetime clerk job at Blockbuster Video and proved uncollectable anyway.
and forgiven after 10 years if they choose a career in public service.
Military service. We've got more wars in the hopper.
... we're working to lift the value of a family's single largest investment -- their home. The steps we took last year to shore up the housing market have allowed millions of Americans to take out new loans and save an average of $1,500 on mortgage payments. This year, we will step up refinancing ...
Here we go again! Pump the next bubble baby!
... so that homeowners can move into more affordable mortgages.
Borrow your way out of debt. All it takes is a new mortgage. Didn't we try that already? I did.
Now let's be clear -- I did not choose to tackle this [health care] issue to get some legislative victory under my belt.
You tackled it so you could claim the certain legislative defeat?
After nearly a century of trying, we are closer than ever to bringing more [health care] security to the lives of so many Americans.
Are you sure? In 1966 I used to get total health care through my company for $1.67 a week. And I only made $270 a month. What century are we talking about here, bro? Closer to what?
I want to acknowledge our first lady, Michelle Obama, who this year is creating a national movement to tackle the epidemic of childhood obesity and make our kids healthier.
Tip for Michelle: Take down the corporate corn famers ram-jamming government subsidized corn syrup into their fat little bodies.
By the time I'm finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow.
Thanks!
Do not walk away from reform. Not now. Not when we are so close ...
Close to total capitulation disguised as a meaningless compromise
Let us find a way to come together and finish the job ... [we are doing on] the American people.
At the beginning of the last decade, America had a budget surplus of over $200 billion ...
Goddamned Bill Clinton's shady bookkeeping.
By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade. Most of this was the result of not paying for two wars ...
Which I continue to prosecute
But we took office amid a crisis, and our efforts to prevent a second depression
by selling you into world debt slavery for generations to come
have added another $1 trillion to our national debt.
Tough break there folks.
I am absolutely convinced that was the right thing to do.
(sigh)
Starting in 2011, we are prepared to freeze government spending for three years.
Not the spending on our two wars mind you, or in aid to Israel, or on money to prime the bankers' pumps, and certainly not on national security programs. But you will still keep your Medicare and Medicaid, if you can afford the new charges we're adding. And naturally your Social Security, the one you paid for all your life as an insurance policy -- which continues to be pillaged by Congress -- will not be affected. Rest assured you will be paid in shrinking funny money until you croak.
We've already identified $20 billion in savings for next year
All you folks gotta do is come up with the $20 billion so we can show it on the books.
... at a time of record deficits, we will not continue tax cuts for oil companies, investment fund managers and those making over $250,000 a year.
No further tax cuts, but they can keep the ones they enjoy now.
Now, even after paying for what we spent on my watch
Which world economists say can never be paid off anyway, so fuck it.
we will still face the massive deficit we had when I took office.
You get to hold that turd too.
More importantly, the cost of Medicare, Medicaid and Social Security will continue to skyrocket.
This is your idea of a political promise?
That's why I've called for a bipartisan fiscal commission
Which should work about as well as all the other bipartisan commissions we use to blow smoke up your ass ... assuming I can get it past the Senate, which petty much likes things the way they are.
... I refuse to pass this problem on to another generation of Americans.
It will land in their laps anyway without any help from me.
And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law ...
Other nations are already threatening to quit loaning us money, so we're gonna be paying as we go anyway. Why not claim the high ground now?
I know that some in my own party will argue that we cannot address the deficit or freeze government spending when so many are still hurting.
But none of us on Capitol Hill are on food stamps, so shut the fuck up and listen to me.
I agree, which is why this freeze will not take effect until next year, when the economy is stronger
When maybe we've managed to beat some oil out of one of these dust pits we're presently bombing.
From some on the right, I expect we'll hear a different argument -- that if we just make fewer investments in our people, extend tax cuts for wealthier Americans, eliminate more regulations and maintain the status quo on health care, our deficits will go away. The problem is, that's what we did for eight years.
Translation: I'm trying to pull it off, but your boy George fouled that pool for us. The man had no subtlety at all.
Rather than fight the same tired battles that have dominated Washington for decades, it's time to try something new. Let's invest in our people.
By taking more of their money from then and giving it back. They've proven they don't know the difference.
To do that, we have to recognize that we face more than a deficit of dollars right now.
We're printing all the dollars we need, so that's not the problem.
We face a deficit of trust -- deep and corrosive doubts about how Washington works that have been growing for years.
None of us in Congress believe anything in Washington works either. In fact, we are certain because we fucked it up.
But restoring the public trust demands more.
We need another sacrificial goat – another like Bernie Madoff. Ben Bernanke is off the table.
Tonight, I'm calling on Congress to publish all earmark requests on a single Web site before there's a vote, so that the American people can see how their money is being spent. Of course, none of these reforms will even happen if we don't also reform how we work with one another.
Which will never happen, so don't let the website scare you off. The most that can happen is that the leftie bloggers blow a few capillaries.
Now, I am not naive. I never thought the mere fact of my election would usher in peace, harmony and some post-partisan era.
That was just a campaign promise.
Since the day I took office, we have renewed our focus on the terrorists who threaten our nation.
Don't ask me how we renewed our focus, given that we were not here to focus at all before we took office. Ask the speech writers. I don't know but we're doing it.
We are filling unacceptable gaps revealed by the failed Christmas attack, with better airline security ...
The new x-ray panty zappers may not be a hit with the ACLU, but the airport TSA employees love 'em.
In Afghanistan, we are increasing our troops and training Afghan Security Forces so they can begin to take the lead in July of 2011 and our troops can begin to come home
At a rate of about six a week for the next 220 years.
As a candidate, I promised that I would end this [Iraq] war, and that is what I am doing as president.
Now that Afghanistan is frying hot enough to keep the military complex cooking, we can ease up on Iraq.
But make no mistake: This war is ending, and all of our troops are coming home ...
On a three legged ticket with a connector in Kabul.
Tonight, all of our men and women in uniform ...
I can't refer to them as our kids getting their cods blown off by IEDs, so, like other presidents, I must say men and women in uniform.
... must know that they have our respect, our gratitude and our full support.
No jobs, but lots of support. Yellow ribbons and free prosthetic limbs for all. And if they still have doubts, they can watch for Michelle Obama and Jill Biden on TV. Because they have vowed to:
forge a national commitment to support military families.
A commitment, mind you, nothing beyond that. So don't go getting any unrealistic expectations. Strap on your new battery powered robotic leg and hit the streets. Rumor is that there is a job out there.
Obama on the threat of nuclear weapons:
I have embraced the vision of John F. Kennedy and Ronald Reagan through a strategy that reverses the spread of these weapons and seeks a world without them.
That should hold the bastards! Kennedy and Reagan in the same sentence.
And seek to reduce our stockpiles and launchers.
Let's eliminate the deteriorated junk, which we would have done anyway, at some point, and call it a reduction. Now comes the time to bring it on home, baby. Something for everybody.
America's greatest source of strength has always been our ideals. ... We find unity in our incredible diversity, drawing on the promise enshrined in our Constitution: the notion that we are all created equal ...
We must continually renew this promise. My administration has a civil rights division that is once again prosecuting civil rights violations and employment discrimination. We finally strengthened our laws to protect against crimes driven by hate. This year, I will work with Congress and our military to finally repeal the law that denies gay Americans the right to serve the country they love because of who they are. We are going to crack down on violations of equal pay laws -- so that women get equal pay ... And we should continue the work of fixing our broken immigration system -- to secure our borders, enforce our laws and ensure that everyone who plays by the rules can contribute to our economy and enrich our nation.
In the end, it is our ideals, our values, that built America -- values that allowed us to forge a nation made up of immigrants from every corner of the globe, values that drive our citizens still.
The national hand job breathlessly quickens.
Every day, Americans meet their responsibilities to their families and their employers. Time and again, they lend a hand to their neighbors and give back to their country. They take pride in their labor, and are generous in spirit. These aren't Republican values or Democratic values they're living by, business values or labor values. They are American values.
I campaigned on the promise of change -- change we can believe in, the slogan went ... But remember this -- I never suggested that change would be easy or that I can do it alone.
But I knew you figured otherwise. So here I am up here in the catbird seat, and down there you are moaning the blues. That's politics for ya!
We can do what's necessary to keep our poll numbers high and get through the next election instead of doing what's best for the next generation.
And why not? It's always worked in the past.
Building to a crescendo:
... that fundamental decency that has always been at the core of the American people -- lives on [!]. It lives on in the struggling small business owner ... It lives on in the woman who said ... We are strong. We are resilient. We are American. It lives on in the 8-year-old boy in Louisiana, who just sent me his allowance and asked if I would give it to the people of Haiti.
I personally gagged at this one. Which is surely some kind of saccharine set up, in hopes of gaining the smarm vote out there in Preciousville, Kansas.
And it lives on in all the Americans who ... pull people they've never known from rubble, prompting chants of USA! USA! USA!
The spirit ... lives on in you, its people.
Thank you. God Bless You. And God Bless the United States of America!
Well God, you don't really have to bless us. You already did that once and we blew it.
From here on out, just preserve us from ourselves. OK?
Amen.
Published on Monday, February 1, 2010 by The New York Times
Good and Boring
by The New York Times
by Paul Krugman
In times of crisis, good news is no news. Iceland’s meltdown made headlines; the remarkable stability of Canada’s banks, not so much.
Yet as the world’s attention shifts from financial rescue to financial reform, the quiet success stories deserve at least as much attention as the spectacular failures. We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model.
Yes, I know, Canada is supposed to be dull. The New Republic famously pronounced “Worthwhile Canadian Initiative” (from a Times Op-Ed column in the ’80s) the world’s most boring headline. But I’ve always considered Canada fascinating, precisely because it’s similar to the United States in many but not all ways. The point is that when Canadian and U.S. experience diverge, it’s a very good bet that policy differences, rather than differences in culture or economic structure, are responsible for that divergence.
And anyway, when it comes to banking, boring is good.
First, some background. Over the past decade the United States and Canada faced the same global environment. Both were confronted with the same flood of cheap goods and cheap money from Asia. Economists in both countries cheerfully declared that the era of severe recessions was over.
But when things fell apart, the consequences were very different here and there. In the United States, mortgage defaults soared, some major financial institutions collapsed, and others survived only thanks to huge government bailouts. In Canada, none of that happened. What did the Canadians do differently?
It wasn’t interest rate policy. Many commentators have blamed the Federal Reserve for the financial crisis, claiming that the Fed created a disastrous bubble by keeping interest rates too low for too long. But Canadian interest rates have tracked U.S. rates quite closely, so it seems that low rates aren’t enough by themselves to produce a financial crisis.
Canada’s experience also seems to refute the view, forcefully pushed by Paul Volcker, the formidable former Fed chairman, that the roots of our crisis lay in the scale and scope of our financial institutions — in the existence of banks that were “too big to fail.” For in Canada essentially all the banks are too big to fail: just five banking groups dominate the financial scene.
On the other hand, Canada’s experience does seem to support the views of people like Elizabeth Warren, the head of the Congressional panel overseeing the bank bailout, who place much of the blame for the crisis on failure to protect consumers from deceptive lending. Canada has an independent Financial Consumer Agency, and it has sharply restricted subprime-type lending.
Above all, Canada’s experience seems to support those who say that the way to keep banking safe is to keep it boring — that is, to limit the extent to which banks can take on risk. The United States used to have a boring banking system, but Reagan-era deregulation made things dangerously interesting. Canada, by contrast, has maintained a happy tedium.
More specifically, Canada has been much stricter about limiting banks’ leverage, the extent to which they can rely on borrowed funds. It has also limited the process of securitization, in which banks package and resell claims on their loans outstanding — a process that was supposed to help banks reduce their risk by spreading it, but has turned out in practice to be a way for banks to make ever-bigger wagers with other people’s money.
There’s no question that in recent years these restrictions meant fewer opportunities for bankers to come up with clever ideas than would have been available if Canada had emulated America’s deregulatory zeal. But that, it turns out, was all to the good.
So what are the chances that the United States will learn from Canada’s success?
Actually, the financial reform bill that the House of Representatives passed in December would significantly Canadianize the U.S. system. It would create an independent Consumer Financial Protection Agency, it would establish limits on leverage, and it would limit securitization by requiring that lenders hold on to some of their loans.
But prospects for a comparable bill getting the 60 votes now needed to push anything through the Senate are doubtful. Republicans are clearly dead set against any significant financial reform — not a single Republican voted for the House bill — and some Democrats are ambivalent, too.
So there’s a good chance that we’ll do nothing, or nothing much, to prevent future banking crises. But it won’t be because we don’t know what to do: we’ve got a clear example of how to keep banking safe sitting right next door.
Copyright 2010 The New York Times Company
Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal , and his most recent,The Return of Depression Economics .
Published on Monday, February 1, 2010 by TruthDig.com
The Creed of Objectivity Killed the News
by TruthDig.com
by Chris Hedges
Reporters who witness the worst of human suffering and return to newsrooms angry see their compassion washed out or severely muted by the layers of editors who stand between the reporter and the reader. The creed of objectivity and balance, formulated at the beginning of the 19th century by newspaper owners to generate greater profits from advertisers, disarms and cripples the press.
And the creed of objectivity becomes a convenient and profitable vehicle to avoid confronting unpleasant truths or angering a power structure on which news organizations depend for access and profits. This creed transforms reporters into neutral observers or voyeurs. It banishes empathy, passion and a quest for justice. Reporters are permitted to watch but not to feel or to speak in their own voices. They function as “professionals” and see themselves as dispassionate and disinterested social scientists. This vaunted lack of bias, enforced by bloodless hierarchies of bureaucrats, is the disease of American journalism.
“The very notion that on any given story all you have to do is report what both sides say and you’ve done a fine job of objective journalism debilitates the press,” the late columnist Molly Ivins once wrote. “There is no such thing as objectivity, and the truth, that slippery little bugger, has the oddest habit of being way to hell off on one side or the other: it seldom nestles neatly halfway between any two opposing points of view. The smug complacency of much of the press—I have heard many an editor say, ‘Well, we’re being attacked by both sides so we must be right’—stems from the curious notion that if you get a quote from both sides, preferably in an official position, you’ve done the job. In the first place, most stories aren’t two-sided, they’re 17-sided at least. In the second place, it’s of no help to either the readers or the truth to quote one side saying, ‘Cat,’ and the other side saying ‘Dog,’ while the truth is there’s an elephant crashing around out there in the bushes.”
Ivins went on to write that “the press’s most serious failures are not its sins of commission, but its sins of omission—the stories we miss, the stories we don’t see, the stories that don’t hold press conferences, the stories that don’t come from ‘reliable sources.’ ”
This abject moral failing has left the growing numbers of Americans shunted aside by our corporate state without a voice. It has also, with the rise of a ruthless American oligarchy, left the traditional press on the wrong side of our growing class divide. The elitism, distrust and lack of credibility of the press—and here I speak of the dwindling institutions that attempt to report news—come directly from this steady and willful disintegration of the media’s moral core.
This moral void has been effectively exploited by the 24-hour cable news shows and trash talk radio programs. The failure of the fact-based press to express empathy or outrage for our growing underclass has permitted the disastrous rise of “faith-based” reporting. The bloodless and soulless journalism of the traditional media has bolstered the popularity of partisan outlets that present a view of the world that often has no relation to the real, but responds very effectively to the emotional needs of viewers. Fox News is, in some sense, no more objective than The New York Times, but there is one crucial and vital difference. Fox News and most of the other cable outlets do not feel constrained by verifiable facts. Within the traditional news establishment, facts may have been self-selected or skillfully stage-managed by public relations specialists, but what was not verifiable was not publishable.
The cable news channels have cleverly seized on the creed of objectivity and redefined it in populist terms. They attack news based on verifiable fact for its liberal bias, for, in essence, failing to be objective, and promise a return to “genuine” objectivity. Fox’s Bill O’Reilly argues, “If Fox News is a conservative channel—and I’m going to use the word ‘if’—so what? … You’ve got 50 other media that are blatantly left. Now, I don’t think Fox is a conservative channel. I think it’s a traditional channel. There’s a difference. We are willing to hear points of view that you’ll never hear on ABC, CBS or NBC.”
O’Reilly is not wrong in suggesting that the objectivity of the traditional media has an inherent political bias. But it is a bias that caters to the power elite and it is a bias that is confined by fact. The traditional quest for “objectivity” is, as James Carey wrote, also based on an ethnocentric conceit: “It pretended to discover Universal Truth, to proclaim Universal Laws, and to describe a Universal Man. Upon inspection it appeared, however, that its Universal Man resembled a type found around Cambridge, Massachusetts, or Cambridge, England; its Universal Laws resembled those felt to be useful by Congress and Parliament; and its Universal Truth bore English and American accents.”
Objectivity creates the formula of quoting Establishment specialists or experts within the narrow confines of the power elite who debate policy nuance like medieval theologians. As long as one viewpoint is balanced by another, usually no more than what Sigmund Freud would term “the narcissism of minor difference,” the job of a reporter is deemed complete. But this is more often a way to obscure rather than expose truth.
Reporting, while it is presented to the public as neutral, objective and unbiased, is always highly interpretive. It is defined by rigid stylistic parameters. I have written, like most other reporters, hundreds of news stories. Reporters begin with a collection of facts, statements, positions and anecdotes and then select those that create the “balance” permitted by the formula of daily journalism. The closer reporters get to official sources, for example those covering Wall Street, Congress, the White House or the State Department, the more constraints they endure. When reporting depends heavily on access it becomes very difficult to challenge those who grant or deny that access. This craven desire for access has turned huge sections of the Washington press, along with most business reporters, into courtiers. The need to be included in press briefings and background interviews with government or business officials, as well as the desire for leaks and early access to official documents, obliterates journalistic autonomy.
“Record the fury of a Palestinian whose land has been taken from him by Israeli settlers—but always refer to Israel’s ‘security needs’ and its ‘war on terror,’ ” Robert Fisk writes. “If Americans are accused of ‘torture’, call it ‘abuse’. If Israel assassinates a Palestinian, call it a ‘targeted killing’. If Armenians lament their Holocaust of 1,500,000 souls in 1915, remind readers that Turkey denies this all too real and fully documented genocide. If Iraq has become a hell on earth for its people, recall how awful Saddam was. If a dictator is on our side, call him a ‘strongman’. If he’s our enemy, call him a tyrant, or part of the ‘axis of evil’. And above all else, use the word ‘terrorist.’ Terror, terror, terror, terror, terror, terror, terror. Seven days a week.”
“Ask ‘how’ and ‘who’—but not ‘why’,” Fisk adds. “Source everything to officials: ‘American officials’, ‘intelligence officials’, ‘official sources’, anonymous policemen or army officers. And if these institutions charged with our protection abuse their power, then remind readers and listeners and viewers of the dangerous age in which we now live, the age of terror—which means that we must live in the Age of the Warrior, someone whose business and profession and vocation and mere existence is to destroy our enemies.”
“In the classic example, a refugee from Nazi Germany who appears on television saying monstrous things are happening in his homeland must be followed by a Nazi spokesman saying Adolf Hitler is the greatest boon to humanity since pasteurized milk,” the former New York Times columnistRussell Baker wrote. “Real objectivity would require not only hard work by news people to determine which report was accurate, but also a willingness to put up with the abuse certain to follow publication of an objectively formed judgment. To escape the hard work or the abuse, if one man says Hitler is an ogre, we instantly give you another to say Hitler is a prince. A man says the rockets won’t work? We give you another who says they will. The public may not learn much about these fairly sensitive matters, but neither does it get another excuse to denounce the media for unfairness and lack of objectivity. In brief, society is teeming with people who become furious if told what the score is.”
Journalists, because of their training and distaste for shattering their own exalted notion of themselves, lack the inclination and vocabulary to discuss ethics. They will, when pressed, mumble something about telling the truth and serving the public. They prefer not to face the fact that my truth is not your truth. News is a signal, a “blip,” an alarm that something is happening beyond our small circle of existence, as Walter Lippmann noted in his book“Public Opinion.” Journalism does not point us toward truth since, as Lippmann understood, there is always a vast divide between truth and news. Ethical questions open journalism to the nebulous world of interpretation and philosophy, and for this reason journalists flee from ethical inquiry like a herd of frightened sheep.
Journalists, while they like to promote the image of themselves as fierce individualists, are in the end another species of corporate employees. They claim as their clients an amorphous public. They seek their moral justification in the service of this nameless, faceless mass and speak little about the vast influence of the power elite to shape and determine reporting. Does a public even exist in a society as fragmented and divided as ours? Or is the public, as Walter Lippmann wrote, now so deeply uninformed and divorced from the inner workings of power and diplomacy as to make it a clean slate on which our armies of skilled propagandists can, often through the press, leave a message?
The symbiotic relationship between the press and the power elite worked for nearly a century. It worked as long as our power elite, no matter how ruthless or insensitive, was competent. But once our power elite became incompetent and morally bankrupt, the press, along with the power elite, lost its final vestige of credibility. The press became, as seen in the Iraq war and the aftermath of the financial upheavals, a class of courtiers. The press, which has always written and spoken from presuppositions and principles that reflect the elite consensus, now peddles a consensus that is flagrantly artificial. Our elite oversaw the dismantling of the country’s manufacturing base and the betrayal of the working class with the passage of the North American Free Trade Agreement and the press dutifully trumpeted this as a form of growth. Our elite deregulated the banking industry, leading to nationwide bank collapses, and the press extolled the value of the free market. Our elite corrupted the levers of power to advance the interests of corporations and the press naively conflated freedom with the free market. This reporting may have been “objective” and “impartial” but it defied common sense. The harsh reality of shuttered former steel-producing towns and growing human misery should have, in the hands of any good cop reporter, exposed the fantasies. But the press long ago stopped thinking and lost nearly all its moral autonomy.
Real reporting, grounded in a commitment to justice and empathy, could have informed and empowered the public as we underwent a corporate coup d’etat in slow motion. It could have stimulated a radical debate about structures, laws, privilege, power and justice. But the traditional press, by clinging to an outdated etiquette designed to serve corrupt power structures, lost its social function. Corporations, which once made many of these news outlets very rich, have turned to more effective forms of advertising. Profits have plummeted. And yet these press courtiers, lost in the fantasy of their own righteousness and moral probity, cling to the hollow morality of “objectivity” with comic ferocity.
The world will not be a better place when these fact-based news organizations die. We will be propelled into a culture where facts and opinions will be interchangeable, where lies will become true, and where fantasy will be peddled as news. I will lament the loss of traditional news. It will unmoor us from reality. The tragedy is that the moral void of the news business contributed as much to its own annihilation as the protofascists who feed on its carcass.
Copyright © 2010 Truthdig, L.L.C.
Chris Hedges writes a regular column for Truthdig.com . Hedges graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times. He is the author of many books, including: War Is A Force That Gives Us Meaning , What Every Person Should Know About War , and American Fascists: The Christian Right and the War on America. His most recent book is Empire of Illusion: The End of Literacy and the Triumph of Spectacle .
Published on Sunday, January 31, 2010 by the New York Times
The State of the Union Is Comatose
by Frank Rich
HANDS down, the State of the Union's big moment was Barack Obama's direct hit on the delicate sensibilities of the Supreme Court Justice Samuel Alito . The president was right to blast the 5-to-4 decision giving corporate interests an even greater stranglehold over a government they already regard as a partially owned onshore subsidiary. How satisfying it was to watch him provoke Alito into a "You lie!" snit. Here was a fight we could believe in.
There was more to admire in Obama's performance as well. He did not retreat into the bite-size initiatives - V-chips, school uniforms - embraced by an emasculated Bill Clinton after his midterm pummeling of 1994. The president's big original goals - health care, economic recovery, financial reform - remained nominally intact, as did his sense of humor. In a rhetorical touch William Safire would have relished, Obama had the wit to rush the ritualistic "our union is strong" so it would not prompt the usual jingoistic ovation.
Good thing, too, since our union is not strong. It is paralyzed. Many Americans were more eagerly anticipating Steve Jobs's address in San Franciscoon Wednesday morning than the president's that night because they have far more confidence in Apple than Washington to produce concrete change. One year into Obama's term we still don't know whether he has what it takes to get American governance functioning again. But we do know that no speech can do the job. The president must act. Only body blows to the legislative branch can move the country forward.
The historian Alan Brinkley has observed that we will soon enter the fourth decade in which Congress - and therefore government as a whole - has failed to deal with any major national problem, from infrastructure to education. The gridlock isn't only a function of polarized politics and special interests. There's also been a gaping leadership deficit.
In Obama's speech , he kept circling back to a Senate where both parties are dysfunctional. The obstructionist Republicans, he observed, will say no to every single bill "just because they can." But no less culpable are the Democrats, who maintain "the largest majority in decades" even after losing Teddy Kennedy's seat - and yet would rather "run for the hills" than accomplish anything.
What does strong Senate leadership look like? That would be L.B.J. in the pre-Kennedy era. Operating with the narrowest of majorities and under an opposition president, he was able to transform a sleepy, seniority-hobbled, regionally polarized debating society into an often-progressive legislative factory. As Robert Caro tells the story in his book "Master of the Senate," this Senate leader had determination, "a gift for grand strategy," and a sixth sense for grabbing opportunities for action before they vanished for good. He could recognize "the key that might suddenly unlock votes that had seemed locked forever away" and turn it quickly. The horse trading with recalcitrant senators was often crude and cynical, but the job got done. L.B.J. knew how to reward - and how to punish.
We keep hearing that they just don't make legislative giants like that anymore. In truth, the long drought has led us to forget what they look like and to define senatorial leadership down. L.B.J.'s current successor, Harry Reid, could be found yawning on camera Wednesday night. He might as well have just taken the whole nap. Here was this leader's pronouncement last week on the future of the president and his party's No. 1 priority: "We're not on health care now. We've talked a lot about it in the past." Yes, a lot of talk - a year's worth, in fact - with nothing to show for it.
If Reid can serve as the face of Democratic fecklessness in the Senate, then John McCain epitomizes the unpatriotic opposition. On Wednesday night he could be seen sneering when Obama pointed out that most of the debt vilified by Republicans happened on the watch of a Republican president and Congress that never paid for "two wars, two tax cuts, and an expensive prescription drug program." The president's indictment could have been more lacerating. Crunching Congressional Budget Office numbers, David Leonhardt of The Times calculated that of the projected $2 trillion swing into the red between the Clinton surplus and 2012, some 33 percent could be attributed to Bush legislation and another 20 percent to Bush-initiated spending (Iraq, TARP) continued by Obama. Only 7 percent of the deficit could be credited to the Obama stimulus bill and 3 percent to his other initiatives. (The business cycle accounts for the other 37 percent.)
Perhaps McCain was sneering at Obama because of the Beltway's newest unquestioned cliché: one year after a new president takes office he is requiredto stop blaming his predecessor for the calamities left behind. Who dreamed up that canard - Alito? F.D.R. never followed it. In an October 1936 speech , nearly four years after Hoover, Roosevelt was still railing against the "hear-nothing, see-nothing, do-nothing government" he had inherited. He reminded unemployed and destitute radio listeners that there had been "nine crazy years at the ticker" and "nine mad years of mirage" followed by three long years of bread lines and despair. F.D.R. soon won re-election in the greatest landslide the country had seen.
Obama should turn up the heat on both the G.O.P's record of fiscal recklessness and its mad-dog obstructionism. He should stop paying lip service to the fantasy that his Congressional opposition has serious ideas to contribute to the cleanup. Better still, he should publicize exactly what those "ideas" are.
Yes, the Republicans were correct to laugh at one of the president's own gimmicks on Wednesday night: a symbolic and pointless spending "freeze." But their own alternatives are downright hilarious. When the G.O.P. House leadership last year announced its plan to cut federal spending by $75 billion annually, it enumerated specific new cuts of only $5 billion per year . A tax-cut-laden "stimulus plan" endorsed by Jim DeMint , the South Carolina senator and Tea Party hero, "would cost more than $3 trillion - more than triple the cost of Obama's stimulus - over the next decade," in the estimate of Jonathan Chait of The New Republic .
On State of the Union day, the Republican National Committee gathered at its winter meeting at Waikiki Beach to battle over a measure that would deny campaign funds to candidates who didn't pass a Tea Party ideological purity test. Back in Washington, other party thinkers trotted out some more brilliant ideas. Paul Ryan, a Wisconsin congressman hailed as the Republicans' new intellectual hope, laid out a lengthy "G.O.P. Road Map for America's Future" on The Wall Street Journal op-ed page that proposed cutting taxes (disproportionately for the wealthy) and privatizing Medicare and Social Security but devoted no bullet point to creating jobs for Americans in urgent need. On the Hill that morning, Michele Bachmann of Minnesota led House colleagues in signing a "Declaration of Health Care Independence" to complement a bill that would let Americans "purchase insurance with their own tax-free money." Gee, why did no else think of that ingenious fix for a health care system that leaves 46.3 million uninsuredand whose runaway costs are on track to eat up one-fifth of the American economy ?
It was a heartening breakthrough when Obama dismissed such idiocies repeatedly in his televised meeting with House Republicans on Friday. He mocked G.O.P. legislative snake oil that promises to lower all medical costs and "won't cost anybody anything." He must keep this up - and be equally tough on the slackers in his own party who stall his agenda. And he must be less foggy on the specifics of what that agenda is. Though on Wednesday night he asked Congress to "take another look" at the health care bill, even now it's unclear what he believes that bill's bedrock provisions should be. He also said he wouldn't sign any financial regulatory bill that "does not meet the test of real reform," yet tentatively praised a House bill compromised by a banking lobby that is in bed with Democrats and Republicans alike. The Senate, of course, has yet to produce any financial reform bill.
Americans like Obama far more than they like any Congressional leader. They might even like more of his policies if he spelled them out. But none of that matters if no Democrat fears him enough to do any of his bidding and no Republican believes there's any price to be paid for always saying no.
A year in, we have learned that all the conciliatory rhetoric won't cut it. But a president with a big megaphone and large legislative majorities has more powerful strings to pull, no matter what happened in one special election in Massachusetts. If he can't get a working government, at least he can shake things up in November.
Just look at how a sharp public slap provoked Justice Alito, threw a spotlight on the court's dubious jurisprudence and sparked an embarrassing over-the-top hissy fit on the right. A do-nothing Congress, at a time when ever more Americans are losing their jobs and homes, is an even riper target than the Supreme Court - and far more politically vulnerable. Without strong medicine from Obama, we can be certain of the same result: a heedless Congress will keep doing nothing. If he steps it up, there's at least a shot that his presidency, and maybe even the country, will be pulled back from the brink.
© 2010 New York Times
Frank Rich is a regular columnist for The New York Times. He is the author of many books, including The Great Story Ever Sold: The Decline and Fall of Truth from 9/11 to Katrina.
Published on Saturday, January 30, 2010 by CommonDreams.org
On the State of the Union
by Ralph Nader
The President's State of the Union Speech is the Big Speech of the year. Yet there is never an opportunity either for the press or the citizenry to promptly follow up with any questions or requests for clarifications. As a result, doubt and misunderstandings fester.
Watching President Obama's speech the other evening before a joint session of vociferous members of Congress, quiet Supreme Court Justices and military brass, I jotted down a few items for the White House to consider.
First, Mr. Obama cited the Senate's inaction four times in contrast to the House of Representatives. To add to his frustration, he cited the Republican leadership for insisting that "sixty votes in the Senate are required to do any business at all in this town." What he did not do was to urge his fellow Democrats to change the filibuster rule by a simple majority vote.
As a legal expert, Tom Geoghegan wrote to Senate majority leader Harry Reid (Dem. Nev) this week, "the Senate can act to change its rules, any rule, by majority vote, even a rule requiring a greater one." That means that the Democrats can change this rule with only 51 of their 59 votes in the Senate and get these bills passed.
Why President Obama did not tell tens of millions of Americans Wednesday evening about how to break the logjam, the gridlock on health insurance, energy, jobs, financial reform and other measures, that they dislike, is a question only he can answer. "Certainly Senate Rule 22 itself should be changed, so that there is ultimately a simple majority for a cloture limiting debate vote," according to Geoghegan.
Second, since dollars invested in energy efficiency and renewable energy have greater, safer, returns than money going into what Mr. Obama calls “a new generation of safe, clean nuclear power plants and clean coal technologies,(which require heavy government subsidies), why did he accord the latter the same priority as the former?
Third, President Obama promised to double our exports over the next five years. This really raised eyebrows, leading New York Times reporter Helene Cooper to write that this highly ambitious goal would require him to persuade China to revalue its currency by 40 percent, "get global economic growth to outperform the salad days from 2003 to 2007 and lower taxes for American companies that do business abroad," plus "forget about strengthening the dollar." He left his own supporters wondering how he could perform this miracle and not forget his campaign promise to revise NAFTA.
Fourth, on health insurance reform, Mr. Obama said: "If anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors and stop insurance company abuses, let me know." Well, Mr. President, try what you supported before you became a Presidential candidate--single payer, full Medicare for all, with free choice of doctor and hospital. Remember you did not allow single payer adherents to have a seat at the table, the way the CEO of Aetna did five times in the White House. (For more see SinglePayerAction.org)
Fifth, you alluded as one reason for the multi-trillion dollar deficits you inherited from the Bush regime was "not paying for two wars." Well, you also are not pressing for a war tax to pay for your two wars, as Rep. David Obey (Dem. Wisc) urged you and other Democrats to do a few months ago. What is the difference and why?
Sixth, the President asserted the need to freeze government spending for three years, but excluded the well-documented, bloated, wasteful, redundant Pentagon budget. He also did not go after the huge corporate welfare budget of subsidies, handouts, giveaways and bailouts. Instead, he left many civic groups wondering what cuts might be coming for programs relating to food, auto, job and environmental safety.
Seventh, his brief words of foreign and military policy came across as Bush redux trying to show how tough he is. He compared notches on his belt in terms of the number of captured or slain "Al Qaeda's fighters and affiliates." He, of course, did not make any comparisons with the far greater number of innocent civilian causalities from drones and other bombings.
These were strange phrasings from a recent Nobel Peace Prize winner who managed to ignore completely the peace process for the Israeli-Palestinian conflict. There was not one sentence on, arguably, the core issue in that tumultuous region.
Eighth, on the Iraq war, he went over the top, declaring "make no mistake: this war is ending, and all of our troops are coming home." Not really. Both Bush and Obama have concluded that 50,000 soldiers will remain in Iraq indefinitely, with many more in the Persian Gulf region.
American taxpayers will be paying nearly $800 million a year just to guard the U.S. Embassy and its personnel in Baghdad. That sum alone is greater than either the annual budgets of OSHA ($502 million to deal with 58,000 work related deaths in America) or NHTSA ($730 million to deal with over 40,000 road fatalities.)
I'm sending this column to the White House. You also may wish to send your observations to President Obama. Citizens should be more than spectators to the annual state of the union spectacle.
Ralph Nader is a consumer advocate, lawyer, and author. His most recent book - and first novel - is, Only The Super Wealthy Can Save Us . His most recent work of non-fiction is The Seventeen Traditions .
Published on Saturday, January 30, 2010 by CommonDreams.org
An Ugly Week For The Human Race And Other Living Things
by David Michael Green
You could almost feel bad for Barack Nothingburger, having to deliver the exquisitely badly timed State of the Union address to the world this week. He, his signature legislative initiative, and his presidency itself were already toast, but he still had to walk in the room and pretend otherwise.
There could hardly have been a worse week for it. The days preceding his speech just brought one disaster after another for the president.
But, since he has decided to be part of the problem, while masquerading as its solution, who cares? As long as he continues to adhere to that position, I'd just as soon see his presidency wrecked and his name humiliated anyhow. Considering that treason is a capital offense, I'd say the guy is getting off easy anyhow.
However - and this may be a news flash for the White House - there is a whole other world out there. And for we ordinary folk, all 6.8 billion of us, it was also an especially bad week.
That may sound like another example of Obama-style mega-narcissism, to believe that America's problems are also the world's, but the truth is they are. We're still the big ol' superpower on the block, and we're still perfectly capable, thank you very much, of lashing out in rage toward others when we feel insecure. I'd refer any disbelievers of that notion to about a million Iraqis who could vouch for its veracity. Except for one small problem. They're dead now. So just take my word for it.
The Week From Hell started out with the heretofore unimaginable notion that Massachusetts could elect a Republican to the Senate. That he could be taking Ted Kennedy's seat. And that he could be the final blow putting so-called health care reform in America - Kennedy's long-sought legislative passion - out of its misery.
Don't get me wrong. I laughed out loud at the stupidity of Democrats thinking they could continue to win elections by being Democrats. In a way, it's a damned healthy sign that an angry and frightened public is growing increasingly intolerant of bullshit from its political class nowadays. "Aren't you the same guys who promised us big old change last year? Yeah, well guess what, now it's this year, and you haven't delivered jack. So bye." That's actually precisely the way it should be, and among the political parties in America, the Democrats would be my close second favorite choice for getting their heads handed to them on a platter by an angry public no longer willing to settle for taxpayer-funded solutions for corporations and cheap rhetoric for the rest of us. These punks had it coming and the only silver-lining to the disaster they've brought down on all of us is seeing them become its latest victims.
Don't get me wrong about healthcare, either. Everything about that legislation was wrong, and I'm delighted to see it die. It was poorly handled in every imaginable way, by what is without doubt the most inept president at least since Herbert Hoover, and by a Congress full of whores, thieves and congenital liars, and I'm happy that the whole thing exploded in their faces. Damn shame, of course, about all those millions of Americans without adequate health care. But since any assistance this bill might have provided them was going to be scant and inadvertent, anyhow, I refuse to feel bad about its demise.
Democrats know exactly what they need to do if they want to fix healthcare in America. And they also know that even if they can't get the legislation through the Senate, now that they've blown their super-majority, they could at least destroy any member of Congress who would vote against such simple reforms that minimally regulate the worst practices of the insurance industry (since we can assume that Democrats could never pull the trigger for single payer). But they also know that they ARE those members of Congress who would be destroyed. When it comes to the essential question of who they work for, they're really no different than the Grand Old Pigs.
But Scott Brown's election was a really bad thing for America and the world, at least in the short term, because when you have a two party system and the Democrats are in power, that means a vote to throw the bums out can only go in one place. The story of American politics over the next five years has already been written. In desperation for solutions, and having already forgotten how much they hated the Bush nightmare, voters will soon be handing the keys to American government back to the Republican Party, which will then promptly fail, even more egregiously than the Democrats, to provide solutions. Neither further tax cuts for the wealthy, nor the slashing of social programs, nor gay-bashing, nor some jive war in some banana republic will cure what ails Americans, and it may no longer even successfully distract them for more than a few minutes.
That's where things will get very interesting. Unfortunately, that may be ‘interesting' in the unhappy sense of the ancient Chinese curse. Ask yourself this question: If a rageful and desperate America were to make a sharp ideological turn one way or the other in order to seek solutions to its maladies, which way would it go? To the left, as it did in the 1930s? Or to the right, as certain other countries you may have heard of did during the same decade? I'd say it's actually an open question, primarily because socialist-hating Americans love their socialist government programs like Medicare and Social Security, and they might even want a lot more of those as the free market system championed by the right assists them in continuing to shed their jobs, houses, security and dignity. Still, if I had to bet, I'd say the other scenario is the more likely.
And that scenario became all the more likely because of the second development of the prior week, the ghastly decision by the Supreme Court to open the floodgates for wholesale corporate purchases of the US and state and local governments. I've seen a lot of ugliness in American politics over the course of my lifetime, ranging from Vietnam to Watergate to Iraq and the current Great Recession, but few items can match the decision by the right-wing majority of the Court in Citizens United for its sheer destructive power.
Before turning to the substance of the ruling, it's important to note how we got it at all. Or, more precisely, how we didn't get it. None of the litigants in the case were actually arguing these questions or demanding this remedy. This was, instead, the purest case of ‘legislating from the bench' in perhaps all of American history. The extreme right, which now owns the Supreme Court as well as the rest of American government, simply told the parties in the case that the Court was hijacking the issue and turning it into something the majority wanted to address. The lawyers were instructed to prepare new briefs, in short order, on new issues that the right-wing RATS (Roberts, Alito, Thomas, Scalia, plus Kennedy) wanted to rule on. And then they did just that. They just went ahead and wrote a new law, like any parliament or Congress would, using this hapless case as a vehicle for what they intended to do along. This, mind you, comes from the same folks who always rail against judicial activism, who rant about respecting precedent, who supposedly hate legislating from the bench, and who have told us that judges should simply ‘call balls and strikes'. Except, of course, when their particular ideology happens to have a majority on the Court, that is.
But, of course, who could blame them for making this decision, even if their methods possessed all the veracity of, say, WMD as a casus belli for invading Iraq, or all the procedural and substantive integrity of Bush V. Gore, brought to you by more or less entirely the same crew who did Citizens United? I mean, after all, can anyone deny that corporations are lacking a policy-making voice in America today? Does anyone not think they are subjected to a gross institutional bias which prevents them from being heard? Does anyone not agree that they are human beings, just like you and me, and should be treated as exactly such by the law? What could be more commonsensical?
Indeed, the only thing more egregious than this decision is the way it was made, and the only thing more egregious than that is the degree of blatant hypocrisy it reveals amongst those who made it.
But that's not exactly news. What is now new is that more or less all obstacles to complete corporate control of the country have been loosed. It has now become almost impossible to argue anymore that ours is anything but a sham democracy, with sham democratic rituals meant - along with WWE wrestling matches and state-run lotteries - to distract us from the real story. And that story is the use of the American polity for no other purpose than the redistribution of wealth from the bottom and the middle to the top.
For thirty years now, the folks Teddy Roosevelt once identified as "the malefactors of great wealth" have been busy destroying the Grand Compact that once governed American labor relations and society, formerly stipulating that the upper class and middle class and even the working class would all do pretty well, comparatively speaking. But that was not enough for the greedy rich. So they hired political hacks like Ronald Reagan and Bill Clinton, and they rewrote the terms of the deal. Whether it's tax policy or trade relations or labor organizing and negotiating rules or government benefits, the new new deal is the same across the board. Way more for the rich, way less for the rest of us.
Of course, people notice. So the first line of defense was to dumb them down enough such that they would at least be slow to notice, and so that they could be sold bogus solutions. Those policies and that rhetoric have been the second line of defense. "It's the fags and the towelheads and the nigrahs and the feminazis and the wetbacks and the gubmint who've made you miserable", said every regressive from here to the horizon, for decades now. It worked pretty well up until 2006 and 2008, when the folks saying it were in charge and yet still weren't delivering prosperity, and when the schadenfreude of someone else being kicked in the teeth no longer delivered sufficient comfort to placate the ripped-off masses.
Now comes the third line of defense, when all avenues of democratic change and redress are being closed off. Congress and the White House - both nominally controlled by the party of the people - are no less the tools of the plutocracy than when the GOP was sitting in those seats. Now the Supreme Court has likewise been captured, and we should anticipate many more of the kind of rulings we've been seeing, underwriting big state and big corporate power at every turn. Poor Justice John Paul Stevens. What a beautiful anachronism he has become, a vestige of a more humane and more innocent time, back when Democrats were still Democrats, and Republicans still approximated human beings. Now, with the floodgates open, and with more and more judicial positions at the state level being drowned in electoral campaign money, all the doors are being closed, just as planned.
I don't know what form the fourth line of defense will take, but I'm pretty sure it will involve blood. The events in Iran lately or China's Tiananmen Square are probably instructive in this regard.
The third item of note in this Week From Hell was the closing of Air America. I'm pretty close to the last person in the world who will miss this attempt at a progressive answer to the wall of horror over there on radio right. The programming of Air America, with a couple of notable exceptions, was dismal beyond belief, ping-ponging between screeching shriekery and apolitical inanity, and rarely resting for even a moment in-between on anything articulate or informative or thoughtful. You know, if I wanted embarrassing political commentary on my radio, I already had Limbaugh and Hannity and Savage and all those other drooling thugs with ganglion cysts where their brains were supposed to be to choose from.
Still, the idea that it's so hard to inject thoughtful discourse into the national dialogue in any moderately broad-based medium is really depressing, even if in this case it might have been more to do with spectacularly bad management than it was because of spectacularly dumb Americans.
We are in a really bad place now, and it feels as though all the avenues offering even a glimmering of hope and redemption are closing down simultaneously. Progressive commentary is being silenced in the supposed marketplace of ideas, while vitriol-spewing hard-right thugs proliferate like so many Spanish Fly-addled bunny rabbits. Meanwhile, trillions of dollars worth of corporate influence have now been unleashed to further overwhelm the already daunting odds of fair competition in electoral contests, and to fully secure the purchasing of favorable policy for special interests. And this was done by a radical one-vote majority of the Supreme Court, who took it upon themselves to go out and change a hundred years worth of Congressional legislation as well as recent precedents of the very same Court. Just calling balls and strikes? No. More like just balls. These guys went out an bought land, built a stadium, wrote the rules and invented an entirely new game.
Then, of course, there's the so-called progressive party, now in charge. You know, the one that's supposed to provide an alternative, in a democratic system, to the party of death, destruction and deceit. Yeah, that one. Except it turns out that the Democrats are no alternative at all. At least when it comes to policy. If, on the other hand, you like your politicians to be embarrassingly weak, inept and ineffectual, then the latter-day Three Stooges - Barack, Harry and Nancy - offer a refreshing break from the linebacker eyes and the freight train punch of the GOP killers.
But, of course, you always wind-up back there anyhow. What the last thirty years make increasingly clear is that the Democrats have simply become a sort of halfway holiday from the worst excesses of the GOP, a kind of spring break from the serious business of wrecking a superpower. When things get really obnoxious under Republican rule, the Dems come in to provide the requisite comedic interlude for a few years. When the economy is good, they may even be invited to actually stay a bit longer, as Bill Clinton was - provided, of course, that he didn't actually mess with anything that mattered. When money is tight, however, comatose ineptitude as a governing philosophy doesn't play so well, and the duration of the Democratic intermission gets short.
Such is the meaning of another of the dismal events of the past week, the president's State of Potemkin speech. What a piece of crap that was. What an abysmal laundry list of platitudes that will be not be remotely remembered by anybody in ten years or even ten days. This White House seems to have now gone full-on Bill Clinton, trotting out silly quarter-measure policy initiatives that even they don't believe in, begging the rabid right to punk them yet again and again, and studiously avoiding any action or rhetoric that would threaten even half a percent of the take collected every day by the predatory governing interest structure for whom America is not a country so much as a handy aggregation and collection apparatus.
Among other indicators, Obama's fleeting and half-hearted pep talk on health care - merely the signature issue of his administration, mind you, and the item that consumed almost all the country's political oxygen over the last year - made clear that he has now decided to walk away from the issue, though the awkwardly-timed SOTU address made it necessary for him to pretend that he's not. (Remember, just a week or two ago, when they were trying to schedule the address to triumphantly follow his signing of the bill? My, how things have changed, and my, how fast it's all gone down the toilet.) In this respect he's gone Clinton as well. Make an awful attempt at health care reform, write really bad legislation, handle the strategy and politics of it stupidly, wreck yourself and your party in the process, then just walk away and leave the dying corpse there, squirming in the dirt.
Does this turn to Clintonism mean Barack is going to start screwing White House interns, too? Perhaps, because his fiscal politics are Clinton-like, as well. Trying to placate the insatiable right, he leaves untouched a growing military budget that so dwarfs those of the entire rest of the planet combined as to inescapably render America the international sociopath among nations, while practically echoing Clinton's "the era of big government is over" swill with his spending freeze on domestic programs. Hey man, they're only poor people, aren't they? It's only the environment, isn't it? It's just education, right? Who cares? Meanwhile, predictably, the right begins to boo and hiss literally right as the words pass across the president's lips. This is classic Obama: breathtakingly tepid nothingburger supposed solutions to serious political problems that piss off the left because they want him to be going the other way, piss off the middle because they want something that works, and piss off the right because not even troglodytes like John McCain are mentally ill enough to satisfy them anymore.
The sad - and what I think will eventually prove quite ugly - truth is that this administration is simply not up to the requirements of the times. Part of this country's mythology about itself - and not a terribly inaccurate view, in some ways, either - is that each generation of Americans rises to meet the call of history, the challenges of their respective moments. But for a very long time now, this generation has not, and Barack Obama is just the latest in a sorry string of losers who have sought to deceive, distract or simply coast on inertia, while the long-term prospects for the country crumble under our feet.
Obama's peculiar sin is that he - unlike Reagan or Clinton or the pathetic Bush family goobers - is stuck presiding over the national decline at the moment it has slipped into fourth gear, and at a time after which all those other clowns have more or less exhausted the suite of remotely plausible diversionary tactics.
But those difficult circumstances could also have been his opportunity instead. Like the Washingtons, Lincolns, and Roosevelts of the past, he could have risen to the occasion of what history demands here and now. Instead, his is a cowardly presidency, afraid to offend even criminals, stuck in the middle of the road like a deer in the headlights of the eighteen-wheelers barreling down on him, and stupidly believing that if he merely doesn't move at least he will survive his own inaction, whatever happens to the rest of the country. Obama is purely the wrong actor for his time. At a moment when Americans want action, he continues to avoid acting, thinking he is saving himself, even as all the indicators - from tea parties to losing elections in three states he won a year ago to plummeting job approval ratings - scream out for him to do otherwise.
Right before the Massachusetts contest, Barack sent an email urging me to help out the hapless Coakley campaign. He said, "David, If you were fired up in the last election, I need you more fired up in this election". And then he went up there and did a rally for his candidate, telling people that "Bankers don't need another vote in the United States Senate. They've got plenty." And then his press secretary, Robert Gibbs, told us that a key theme of 2010 will be asking voters "whether the people they have in Washington are on the side of protecting the big banks, whether they're on the side of protecting the big oil companies, whether they're on the side of protecting insurance companies or whether they're on the people's side."
Well, Barack, if you're reading this, let me first thank you for your note. How kind of you to write. And, yes, as a matter of fact, I was a bit fired up for the last election. But, no, I wouldn't dream of being fired up for you or your party again this year, and perhaps not ever again any year, as a matter of fact. And you're a big reason for that, my friend. You see - how shall I put this? - bankers don't need another vote in the White House. They've got plenty. And since you've decided to ask folks in 2010 which side the people they have in Washington are on, my answer is that they are overwhelmingly on the side of protecting the big banks, on the side of protecting the big oil companies, and on the side of protecting insurance companies.
Oh, and perhaps you haven't noticed, but you and your party won the last two elections. The ‘people we have in Washington' right now are not they, but rather you.
And you're wrecking the country and the world.
And so it was, this Week From Hell, in which the avenues of national redemption closed more completely and more emphatically. There will be no genuine party of the people on our ballots, there to choose in elections. There will be no alternative voice of sanity in the media flinging even toy arrows at the impenetrable wall of national psychosis. There will be no change you can believe in from a president who seems content to be just a slogan in a suit. There will be only more of the same, until the next election, when it will get worse, and then the one after that when it gets worse still. All of which may be but a mere warm-up act for the real fireworks.
Such was the Week From Hell, indeed, except for one final blow.
Howard Zinn left us, shutting down yet another of the few remaining voices of sanity in this deeply unhealthy society. Judging by these events preceding his death, it's not unreasonable to guess why he went when he did.
You can die from a broken heart, can't you?
David Michael Green is a professor of political science at Hofstra University in New York. He is delighted to receive readers' reactions to his articles (mailto:dmg@regressiveantidote.net ), but regrets that time constraints do not always allow him to respond. More of his work can be found at his website, www.regressiveantidote.net .
Why Daniel Ellsberg May Still Be the 'Most Dangerous Man in America'
By Judith Ehrlich, AlterNet
Posted on January 29, 2010, Printed on February 1, 2010
http://www.alternet.org/story/145475/
In June 1971, when the Nixon White House discovered its colleague Daniel Ellsberg had leaked 7,000 pages of top-secret documents on the history of the Vietnam War to theNew York Times, Henry Kissinger called Ellsberg "the most dangerous man in America." Ellsberg's dramatic transformation from war planner to war resister made him extremely dangerous to the powers that be.
Four decades later, his continued insistence on pointing out the problems with a permanent state of war make him a problem to those same powerful interests. In this historical moment Daniel Ellsberg is uniquely qualified to draw provocative parallels between the Vietnam War and the Afghanistan occupation.
In 1965, Ellsberg, a top Pentagon military analyst, wrote the speech in which President Lyndon Johnson announced he would send 40,000 troops to Vietnam and make real our nascent war. This act definitively catapulted us into a hopeless conflict that would last another 10 years. For Ellsberg, Obama's recent call-up of 30,000 troops to Afghanistan was painfully reminiscent.
But was it done for the same reason, to avoid being the president who lost a war? That was the motivation of five earlier presidents that the Pentagon Papers revealed to the American people. That top-secret history of war-making in Vietnam made it clear that presidents Truman, Eisenhower, Kennedy, Johnson and Nixon all lied to the American people about our prospects for success in Southeast Asia. Each knew it was hopeless and yet stayed, escalating our involvement to avoid being the president left standing at the end of the game of musical chairs. That "game" was to kill millions in Southeast Asia before our eventual defeat. And now in 2010, the former military strategist tells us it's an encore performance. Not as humid, more sand, but pretty much the same quagmire.
This week the documentary, The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers will open in New York followed by theatrical openings around the country over the next few months. Co-director Rick Goldsmith and I have been producing this film for over four years. (Watch the trailer at the bottom of this article.)
When asked why we made this film we often answer, "Are you asking, why tell this true story of risk, intrigue, government misconduct, murder, cover-up, love and spiritual awakening and an unparalleled act of conscience that helped to stop a war and bring down an imperial presidency?" A better question might be, "How come no one beat us to it and how did we get so lucky?"
A partial answer to that query begins with Daniel Ellsberg's long overdue autobiography,Secrets: A Memoir of Vietnam and the Pentagon Papers, which was published in 2002. Prior to that he didn't want a film to scoop his version of the story. When we came along there were three other filmmakers in line. It took six months to convince Dan and his wife, Patricia, that we were the right team. Our previous films about risk-takers motivated by conscience finally convinced them. But we wanted this film to break new ground stylistically; to be both a political thriller with the feel of a feature film and a sound piece of historical filmmaking that would be the definitive telling of these compelling events.
There was a made-for-TV movie produced shortly before Secrets was released, starring James Spader as Ellsberg. The movie wasn't all bad, but not a word was spoken to the Ellsbergs about the production. Patricia Ellsberg said that while the movie got all the facts wrong, it captured the spirit and "we liked it because we looked so good." We wanted to make a film that got the facts straight and still looked good (which was remarkably easy because the Ellsbergs really do look good in hours of archival footage as well as the present-day).
In 1971 Dan Ellsberg was one of the best and brightest, a Harvard PhD, Pentagon insider and Paul Newman lookalike with a gorgeous and brilliant wife who was heir to the fortune of the world's largest toymaker. Dan had attended a top prep school and went on to graduate from Harvard with honors and then command a platoon of Marines. They had lived a charmed life.
Then Dan read the secret Pentagon report and realized that the presidents he had worked for and believed in deeply habitually lied to the people of the United States about why they went to war and whether or not they could win. He decided he was willing to risk life in prison to tell the truth. Patricia joined her new husband and they went underground to make more copies, hiding out from the largest FBI manhunt since the Lindbergh kidnapping. After Dan poked his fingers in Nixon's eyes and made sure enough newspapers had the documents to prove his case, he revealed his identity to hundreds of reporters and took full responsibility for exposing the truth of the unjust war in Vietnam.
This film begs the question: Where are the Daniel Ellsbergs of today? There have been a few government whistle-blowers. Last fall former Marine Corps captain Matthew Hoh, a State Department employee stationed in Zabul Province, a Taliban hotbed, became the first U.S. official to resign in protest over the Afghan war, which he had come to believe was fueling the insurgency. But he didn't walk out with documents. Dan still rushed to meet him and support his courageous act. On tour with the film Dan ends most Q&As by asking the audience if anyone has secret documents they can leak and help to end the senseless wars in Iraq and Afghanistan. "Don't do what I did; don't wait till the bombs drop," he says.
But the questions raised by this film go deeper than war and peace, although they look at the variables of those two poles in depth. The film plumbs the question of conscience and action in the world, the possibility of civil courage, which is much rarer than the courage of a warrior in battle. Civil courage is having the courage to look foolish, to make the difficult choice to give up privilege, to do the right thing and disobey one's boss.
It turns out that the story of one man's courageous act in 1971 resonates across age, race and gender borders, and across time. It is the story of an act of conscience that actually made a difference, shortening a war and helping to force a dangerous president out of the White House. It transmits a message sorely lacking in the soundbite world of compromise that passes for political and public action today.
Earlier this month I showed The Most Dangerous Man in America at the Palm Springs Film Festival to a diverse audience of 1,000 high school students from the region. The atmosphere bristled with energy. As the lights came on 100 hands shot into the air, followed by a barrage of questions asking how they could be better citizens, make a difference, do the right thing. The students didn't need to have prior knowledge of these historic events to get the underlying message.
For four years, I have shared the evolving production process of this film with my classes in documentary film history at Berkeley Community College. Last week, the first night of the new semester, I screened the finished film for a classroom bursting at the seams (symptomatic of an educational system suffering terrible cuts). One student raised his hand during the discussion that followed. "Wow," he said, his eyes a bit glazed. "That was amazing. I didn't know any of that. I feel like I haven't been told the real story about anything. What else don't I know?"
Another student said, "Did you actually meet Howard Zinn making this film?" The renowned truth-teller Howard Zinn passed away Wednesday. He played a big part in these events, in Ellsberg's life and in our film. He would have been with us at our screening in Los Angeles in February. Come see the film, and savor your screen time with these two dangerous accomplices in the fine art of truth-telling.
Women Are Setting Themselves On Fire In Afghanistan
By Jeffrey S. Kaye, TruthOut.org
Posted on January 19, 2010, Printed on January 29, 2010
http://www.alternet.org/story/145278/
Two reports coming out of Afghanistan illustrate the depth of hypocrisy and subterfuge characterizing the US/NATO intervention in that country. One could cite a myriad of such examples, so immoral and wrong is the US war there.
In the first report, a 2009 human rights assessment prepared by Canada's Foreign Affairs Department, obtained by The Canadian Press and reported at CBC News, revealed a skyrocketing suicide rate among Afghan women:
"Self-immolation is being used by increasing numbers of Afghan women to escape their dire circumstances and women constitute the majority of Afghan suicides," said the report, completed in November 2009....
The director of a burn unit at a hospital in the relatively peaceful province of Herat reported that in 2008 more than 80 women attempted suicide by setting themselves on fire, many of them in the early 20s.
It's not as if the plight of Afghan women under the US-backed Karzai government hasn't gotten some attention. The Afghanistan Independent Human Rights Commission (AIHRC)recorded 184 cases of self-immolation by Afghani women in 2007, versus 106 in 2006. In Herat alone, in the first six months of 2008, 47 women, desperate from an escape from a life of domestic servitude, violence, rape, injustice, and other crimes, set themselves on fire and ended up in the emergency room of the local hospital. Ninety percent died from their serious burns.
The police and judiciary do not launch any formal investigations to determine the causes and motivations of suicide and self-burning by women, according to the AIHRC.
As a result, men who force and provoke women to self-immolation and other forms of suicide remain immune from all legal and penal repercussions.
To delve into the statistics only reveals a more doleful picture: almost 90 percent (!) of Afghan women have been victims of violence, 60 percent of all marriages are forced. The US-backed regime has made some token moves to assist women, such as creating police task forces staffed by women officers. But the female officers aren't allowed to do any outreach. Meanwhile, Afghan President Hamid Karzai infamously supported a law that allows for spousal rape. (Afghanistan is not alone in this, however, as Bahrain, too, "offers women no protection from spousal rape.")
US/NATO-Backed Afghan Regime Practices Torture
As the US plans to transfer administrative control of its Bagram detention facility to the Afghanistan government, a separate scandal links the Afghan government to the torture and murder of a prisoner in its custody. According to a report by Human Rights Watch (HRW), Afghan citizen Abdul Basir was tortured while in custody of Afghani security forces last December, and killed when he was pushed or thrown out a window. His family was told he committed suicide. But HRW has posted pictures of the tortured marks on Basir's body.
It wasn't easy to try and get an investigation of Basir's death in Afghanistan -- from this brave new government ("elected" by massive fraud) that has guaranteed justice and due process to the Bagram prisoners, once they get their hands on them. According to HRW's report on Basir's death:
An NDS official told family members that Basir's father, Zalmai, signed a statement confirming that Basir had committed suicide and that an autopsy was not required. The family told Human Rights Watch that NDS officials told them that if they buried the body, Basir's brothers and father would be released.
However, concerned that the marks on Basir's body may have been signs of torture, the family took the body to the Forensic Department of the Health Ministry where an autopsy was carried out. The findings have not been made public. The family reported that security agency officials later came to the house where the body was held and gave them a message to bury the body. When the family tried to take the body to parliament, they said, agency vehicles blocked their way.
While the Afghan defense ministry assures the world press that "all international conventions on prisoners' rights would be implemented" once it gets control of Bagram, the many reports of arbitrary arrest, torture, and other ill-treatment by Afghan security forces suggest otherwise. In fact, there is nothing very trustworthy about either the Afghan government or its US/NATO backers, who have averted their eyes from anything that would besmirch the credentials of their war purposes in Afghanistan.
This leads the leaders of the Western alliance to some pretty strange places. Take Canadian Prime Minister Stephen Harper. Talking to interviewers for the French-language television network TVA about the many reports that prisoners captured by Canadian forces and turned over to Afghani authorities were tortured, even killed, Harper said:
"We are speaking here of a problem among Afghans. It's not a problem between Canadians and Afghans. We're speaking of problems between the government of Afghanistan and the situation in Afghanistan. We are trying to do what's possible to improve that situation, but it's not in our control."
For Harper, the system of transferring prisoners to the Afghans "works very well," though he admits there are "problems from time to time." As an example of some of these problems, read the over 40 redacted emails sent from former Canadian diplomat Richard Colvin to then-Foreign Affairs Minister Peter MacKay alleging the torture of detainees transferred by Canadians to Afghan prisons.
While trumpeted as a blow against the idea of turning Bagram into a second Guantanamo, the likelihood is that things will not get any better for the 700 plus prisoners at the US facility there. Nor does it speak to the ongoing management by Special Operations forces of a black site prison, also on the Bagram Air Base. US Special Operations forces are granted special privileges to hold prisoners in indefinite detention. Evidence of torture at the SO black site prison, published in both The New York Times and The Washington Post last November, has not produced any follow-up in terms of Congressional hearings or further investigations. Instead, the handover of the Department of Defense's primary Bagram detention site appears likely to even further reduce oversight and investigation into the plight of prisoners there, once under Afghan jurisdiction, as the promises of the Afghanistan government are not to be trusted.
Meanwhile, the propaganda from Washington continues unabated. "Surge turning tide against Taliban, says McChrystal," blared ABC news on Monday. But no amount of propaganda is going to fill up the moral bog that is the US war in Afghanistan. Whether its targeted assassinations, leading to rounds and never-ending rounds of assassination and bombings, as at Khost, or the counterinsurgency attacks that target school-age children, as at Ghazi Khan, the campaign in Afghanistan has nowhere to go but down.
Even its vaunted aim of improving the lives of Afghan women is proven to be a lie. As a statement by the Revolutionary Association of the Women of Afghanistan (RAWA)reported recently:
The US "War on terrorism" removed the Taliban regime in October 2001, but it has not removed religious fundamentalism which is the main cause of all our miseries. In fact, by reinstalling the warlords in power in Afghanistan, the US administration is replacing one fundamentalist regime with another. The US government and Mr. Karzai mostly rely on Northern Alliance criminal leaders who are as brutal and misogynist as the Taliban....
Last month, Malalai Joya, a former member of the Afghan parliament, told Michelle Goldberg of the Daily Beast that the situation for Afghan women is every bit as bad under Karzai as it was under the Taliban. Joya is also concerned that civilian casualties are fueling popular support for the Taliban.
Thus far, no significant antiwar movement has emerged to seriously challenge the Obama administration's prosecution of the Afghanistan war. Meanwhile, the administration has clearly expanded its military operations to Pakistan, Yemen and Somalia. But support by the US electorate of this war policy appears shaky at best, as the population suffers under an unemployment rate approaching 20 percent, and an array of service cutbacks in many US states.
Whether protests against the economy will be linked to the bellicose policies of the Obama administration in its own version of Bush's "war on terror" remains to be seen. But one doesn't have to look very far to see that the premises of prosecuting a democratic, human rights war is no more tenable under Obama than it was under Bush.
Jeffrey Kaye is a psychologist active in the anti-torture movement. He works clinically with torture victims at Survivors International in San Francisco, CA. His blog is Invictus; as "Valtin," he also regularly blogs at Daily Kos, Docudharma, American Torture, Progressive Historians, and elsewhere.
Published on Friday, January 29, 2010 by The Independent/UK
This Corruption in Washington is Smothering America's Future
How do you regulate banks effectively, if the Senate is owned by Wall Street?
by Johann Hari
This week, a disaster hit the United States, and the after-shocks will be shaking and breaking global politics for years. It did not grab the same press attention as the fall of liberal Kennedy-licking Massachusetts to a pick-up truck Republican, or President Obama's first State of the Union address, or the possible break-up of Brangelina and their United Nations of adopted infants. But it took the single biggest problem dragging American politics towards brutality and dysfunction - and made it much, much worse. Yet it also showed the only path that Obama can now take to salvage his Presidency.
For more than a century, the US has slowly put some limits - too few, too feeble - on how much corporations can bribe, bully or intimidate politicians. On Tuesday, they were burned away in one whoosh. The Supreme Court ruled that corporations can suddenly run political adverts during an election campaign - and there is absolutely no limit on how many, or how much they can spend. So if you anger the investment bankers by supporting legislation to break up the too-big-to-fail banks, you will smack into a wall of 24/7 ads exposing your every flaw. If you displease oil companies by supporting legislation to deal with global warming, you will now be hit by a tsunami of advertising saying you are opposed to jobs and the American Way. If you rile the defence contractors by opposing the gargantuan war budget, you will face a smear-campaign calling you Soft on Terror.
Representative Alan Grayson says: "It basically institutionalises and legalises bribery on the largest scale imaginable. Corporations will now be able to reward the politicians that play ball with them - and beat to death the politicians that don't... You won't even hear any more about the Senator from Kansas. It'll be the Senator from General Electric or the Senator from Microsoft."
To understand the impact this will have, you need to grasp how smaller sums of corporate money have already hijacked American democracy. Let's look at a case that is simple and immediate and every American can see in front of them: healthcare. The United States is the only major industrialised democracy that doesn't guarantee healthcare for all its citizens. The result is that, according to a detailed study by Harvard University, some 45,000 Americans die needlessly every year. That's equivalent to 15 9/11s every year, or two Haitian earthquakes every decade.
This isn't because the American people like it this way. Gallup has found in polls for a decade now that two-thirds believe the government should guarantee care for every American: they are as good and decent and concerned for each other as any European. No: it is because private insurance companies make a fortune today out of a system that doesn't cover the profit-less poor, and can turn away the sickest people as "uninsurable". So they pay for politicians to keep the system broken. They fund the election campaigns of politicians on both sides of the aisle and employ an army of lobbyists, and for their part those politicians veto any system that doesn't serve their paymasters.
Look for example at Joe Lieberman, the former Democratic candidate for Vice-President. He has taken $448,066 in campaign contributions
from private healthcare companies while his wife raked in $2m as one of their chief lobbyists, and he has blocked any attempt in the Senate to break the stranglehold of the health insurance companies and broaden coverage.
The US political system now operates within a corporate cage. If you want to run for office, you have to take corporate cash - and so you have to serve corporate interests. Corporations are often blatant in their corruption: it's not unusual for them to give to both competing candidates in a Senate race, to ensure all sides are indebted to them. It has reached the point that lobbyists now often write the country's laws. Not metaphorically; literally. The former Republican congressman Walter Jones spoke out in disgust in 2006 when he found that drug company lobbyists were actually authoring the words of the Medicare prescription bill, and puppet-politicians were simply nodding it through.
But what happens if politicians are serving the short-term profit-hunger of corporations, and not the public interest? You only have to look at the shuttered shops outside your window for the answer. The banks were rapidly deregulated from the Eighties through the Noughties because their lobbyists paid politicians on all sides, and demanded their payback in rolled-back rules and tossed-away laws. As Senator Dick Durbin says simply: "The banks own the Senate," so they had to obey.
It is this corruption that has prevented Barack Obama from achieving anything substantial in his first year in office. How do you re-regulate the banks, if the Senate is owned by Wall Street? How do you launch a rapid transition away from oil and coal to wind and solar, if the fossil fuel industry owns Congress? How do you break with a grab-the-oil foreign policy if Big Oil provides the invitation that gets you into the party of American politics?
His attempt at healthcare reform is dying because he thought he could only get through the Senate a system that the giant healthcare corporations and drug companies pre-approved. So he promised to keep the ban on bringing cheap drugs down from Canada, he pledged not to bargain over prices, and he dumped the idea of having a public option that would make sure ordinary Americans could actually afford it. The result was a Quasimodo healthcare proposal so feeble and misshapen that even the people of Massachusetts turned away in disgust.
Yet the corporations that caused this crisis are now being given yet more power. Bizarrely, the Supreme Court has decided that corporations are "persons", so they have the "right" to speak during elections. But corporations are not people. Should they have the right to bear arms, or to vote? It would make as much sense. They are a legal fiction, invented by the state - and they can be fairly regulated to stop them devouring their creator. This is the same Supreme Court that ruled that the detainees at Guantanomo Bay are not "persons" under the constitution deserving basic protections. A court that says a living breathing human is less of a "persons" than Lockheed Martin has gone badly awry.
Obama now faces two paths - the Clinton road, or the FDR highway. After he lost his healthcare battle, Clinton decided to serve the corporate interests totally. He is the one who carried out the biggest roll-back of banking laws, and saw the largest explosion of inequality since the 1920s. Some of Obama's advisers are now nudging him down that path: the appalling anti-Keynesian pledge for a spending freeze on social programmes for the next three years to pay down the deficit is one of their triumphs.
But there is another way. Franklin Roosevelt began his Presidency trying to appease corporate interests - but he faced huge uproar and disgust at home when it became clear this left ordinary Americans stranded. He switched course. He turned his anger on "the malefactors of great wealth" and bragged: "I welcome the hatred... of the economic royalists." He put in place tough regulations that prevented economic disaster and spiralling inequality for three generations.
There were rare flashes of what Franklin Delano Obama would look like in his reaction to the Supreme Court decision. He said: "It is a major victory for big oil, Wall Street banks, health insurance companies, and other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americas." But he has spent far more time coddling those interests than taking them on. The great pressure of strikes and protests put on FDR hasn't yet arisen from a public dissipated into hopelessness by an appalling media that convinces them they are powerless and should wait passively for a Messiah.
Very little positive change can happen in the US until they clear out the temple of American democracy. In the State of the Union, Obama spent one minute on this problem, and proposed restrictions on lobbyists - but that's only the tiniest of baby steps. He evaded the bigger issue. If Americans want a democratic system, they have to pay for it - and that means fair state funding for political candidates. Candidates are essential for the system to work: you may as well begrudge paying for the polling booths, or the lever you pull. At the same time, the Supreme Court needs to be confronted: when the court tried to stymie the new deal, FDR tried to pack it with justices on the side of the people. Obama needs to be pressured by Americans to be as radical in democratising the Land of the Fee (CRCT).
None of the crises facing us all - from the global banking system to global warming - can be dealt with if a tiny number of super-rich corporations have a veto over every inch of progress. If Obama funks this challenge, he may as well put the US government
on e-Bay - and sell it to the highest bidder. How would we spot the difference?
© 2010 The Independent
Johann Hari is a columnist for the London Independent . He has reported from Iraq, Israel/Palestine, the Congo, the Central African Republic, Venezuela, Peru and the US, and his journalism has appeared in publications all over the world.
President, University Council - AFT
Posted: January 28, 2010 04:57 PM
In August 2009, just one month after the state of California cut over a billion dollars from its higher education budget, the University of California (UC) turned around and lent the state $200 million. When journalists asked the UC president, Mark Yudof, how the university could lend millions of dollars to the state, while the school was raising student fees (tuition), furloughing employees, canceling classes, and laying off teachers, Yudof responded that when the university lends money to the state, it turns a profit, but when it spends money on salaries for teachers, the money is lost.
Welcome to the university as hedge fund world. In this strange new world, institutions of higher learning care more about interest rates than educational quality. In fact, Harvard cared so much about reducing the cost of borrowing money that it made several expensive credit default swaps, which resulted in a loss of hundreds of millions of dollars and the halting of an ambitious expansion plan. Not only did Harvard gamble on interest rates to support future construction plans, but it moved much of its endowment into high risk investments, and the result is that the world's wealthiest education institution is now claiming poverty.
Risky Businesses
Like Harvard, the University of California was seduced by the Yale endowment manager, David Swenson, who inspired universities throughout the country to shift their investments from secure bonds and treasury notes to volatile equities and commodities. At first, schools were showing high rates of return in their investment and pension portfolios, but when these investments turned south, the universities lost billions of dollars of savings. In fact, the UC lost over $23 billion dollars in its combined pension and endowment funds, and this loss will take years to recover.
Of course, universities will say that everyone lost money in the global financial meltdown, but schools like Harvard, Yale, and the University California lost so much more than everyone else because they followed Swensen's model of shifting funds into supposedly low-risk, high-yield assets. Moreover, these schools were pushed to gamble big in their investments in order to keep up with their expensive spending habits. For the fact of the matter is that when these universities were getting double-digit returns on their investments, they continued to jack up tuition, borrow more money, and increase compensation to the top earners, but now that bottom has fallen out of their investments, they are left with no choice but to eliminate the non-tenured faculty who currently teach a majority of the students. Since it is very difficult to lay off tenured faculty, and administrators are resistant to get rid of other administrators, the only thing left to cut is the instructors without tenure, and this means courses will be cancelled and class sizes will be expanded. In short, students will be paying more and getting less because big bets did not pay off.
To understand how both public and private research universities have gotten themselves into this mess, one needs to understand five inter-related factors: the state de-funding of public education, the emphasis on research over instruction, the move to high-risk investments, the development of a free market academic labor system, and the marketing of college admissions. These different forces have combined to turn universities into corporations centered on pleasing bond raters in order to get lower interest rates so that they can borrow more money to fund their unending expansion and escalating expenses.
The Defunding of Higher Ed
Starting in 1980, as part of the Reagan revolution and the desire to cut the taxes of the wealthiest Americans, states began to reduce their funding for public universities. In order to counter this loss of funds, public research universities had to look for other revenue streams, and not only did they raise tuition to make up for the reduction of state support, but they also expanded the research parts of their budget.
This move to find new revenue through research activities was enabled in 1980 by the passage of the Bayh-Dole Act, which allowed universities for the first time to buy and sell research produced at federally funded labs. Not only did this law push universities to seek profits by selling the results of their research, but the move to increase research triggered a major expansion of administration and staff. It turns out that in order to perform high-level research, schools need to hire an army of lawyers, accountants, regulators, and staff. After all, they have to have administrators and staff to run compliance offices, regulate research centers, oversee venture capital enterprises, and to administer fund-raising activities. They also need administrators to watch over the other administrators, and then they need staff to collect the information so that administrators can watch over other administrators, and of course, these institutions need computer staff to compile the data to give to the staff so they can give it to the administrator who gives it to another administrator, and once one gets to this level of complication, one needs a whole set of other people to see if everyone is following the state and federal guidelines, and the expansion continues to infinity.
A result then of the growing emphasis on research is that the number of administrators has expanded, while the number of faculty has remained flat. For instance, during the last decade, the number of administrators in the UC system has doubled, while the number of faculty has increased 25%; in fact, nationally, there is now one higher ed administrator for every faculty member. Moreover, many administrators pull in huge salaries, and they often bring with them a purely corporate mentality that is in conflict with the stated missions of educational institutions.
Pleasing the Bond Raters
To support the expansion of research and the increased cost of bureaucracy, universities have to borrow huge sums of money. For example, during its recent financial crisis, the University of California applied for over a billion dollars for construction bonds, and almost all of this debt will go to build new research facilities. In response to these bond applications, Moody's gave the UC system a high bond rating, which will result in low interest rates, further fueling more borrowing. Moreover, as UC Santa Cruz Professor Bob Meister has revealed, the UC is using student fees and tuition as collateral for its construction bonds. In this modified credit swap, students are forced to take out subprime students loans, often charging 6% interest, so that the university can borrow money at a reduced rate.
Not only do the bond raters help to determine the cost of borrowing, but they also tell universities what they should do in order to attain a clean bill of fiscal health. For instance, Moody's slipped into its bond rating for the UC system, the need for the institution to restrain labor costs, increase tuition, diversify revenue streams, feed the money-making sectors, and resist the further unionization of its employees. Like the IMF or World Bank, the bond raters tie access to credit to the dismantling of the public sector and the adoption of free market fundamentalism.
In the case of the UC system, it appears that the President Yudof is taking his marching orders from the bond raters and is doing everything in his expanded powers to feed money into the privatized profitable sectors, while starving the non-revenue generating public areas, like instruction. Yudof's core values were revealed when he described the fiscal status of the UC system on the PBS News Hour: "Many of our, if I can put it this way, businesses are in good shape. We're doing very well there. Our hospitals are full, our medical business, our medical research, the patient care?-so we have this core problem, who's gonna pay the salary of the English Department? We have to have it. Who's gonna pay it, and Sociology, and the humanities, and that's where we're running into trouble." For many people inside and outside of higher education, Yudof's statement may seem jarring, but for bond raters, his argument makes perfect sense. From a purely financial perspective, there are profitable ventures and unprofitable ones, and only the areas bringing in money should be nourished.
Of course, lately, bond raters have been proven to be questionable experts when it comes to predicting the financial health of institutions, and in the case of judging universities, not only do the raters seem to have the wrong values, but they also have the wrong numbers. In contrast to Yudof's statement, the reality is that it is the humanities and the social sciences that actually subsidize the research centers and not the other way around. Studies have shown that humanities' programs often educate most of the undergraduate students, and they do this with relatively inexpensive teachers and low overhead. In fact, most humanities' departments turn a huge profit that is then distributed to support the supposedly profit-making sectors. Since federal and corporate-sponsored grants often fail to cover the full cost of buildings, administration, labs, staff, maintenance, and utilities, money has to be taken from undergraduates and humanities programs to subsidize the research sectors.
Marketing Academic Labor
The twin engines of increased debt and an emphasis on research have fueled a third new market force, which is the academic free agent system. In order for universities to remain highly ranked, they feel that they must compete for the best faculty, and the best faculty are often defined by how much other schools are wiling to pay them. In the UC system, for example, there is an official salary scale, but over 85% of the faculty are now off the scale, and this means that many of them have negotiated private deals with a dean. Not only does this system turn everyone into competitive individualists, but it also circumvents the peer review process that is supposed to be at the heart of the modern democratic university.
In elite private and public universities, many faculty members search for outside offers from competing institutions every year so that professors can renegotiate their deals, and these deals not only include higher compensation but also less time in the classroom. One of the results of this system is that the more universities pay star professors, the less teaching they do, and the less loyal they are to the institution. In turn, star faculty, administrators, and coaches hold universities hostage by threatening to go to a competitor. This compensation system has gotten so out-of-hand that in 2008, there were over 3,600 employees in the UC system making more than $200,000.
Marketing Enrollment
Mirroring the free market star economy is the market-based enrollment system. Universities now believe that to get the "best" students, they have to offer the best aid packages, and what has happened is that many top universities have moved much of their financial aid from need to merit. One of the problems with this structure is that merit is often based on SAT scores, and SAT scores have been shown to be heavily correlated with wealth. The end result of switching from a need-based to a merit-based financial aid system is that lower- and middle-class students end up subsidizing the wealthiest students because in order to give the top students large aid packages, the universities have to raise the tuition on everyone else.
In his book Tearing Down the Gates, Peter Sacks has shown that not only do SAT scores predict the wealth of the students' parents, and not the success the students will have in college, but SAT scores also determine a school's ranking in the all-powerful U.S. News & World Report college guidebook. Therefore, by accepting students with high SAT scores, universities not only increase their rankings, but they also bring in wealthy students who will help build the schools' endowments in the future.
The speculative market-based system that universities use to recruit students is coupled with the way these institutions spend lavishly on new facilities to attract potential enrollees. It seems that universities believe that is easier to please students outside of the classroom rather than inside, so they pour money into new fitness centers, entertainment complexes, sports arenas, restaurants, and shopping malls. Of course, all of these extracurricular activities require expensive new buildings, which require more debt, and more efforts to please the bond raters.
The expansion and revenue diversification of American universities has gotten so out of hand that research universities, like UCLA, now spend less than 5% of their total budget on undergraduate instruction. No wonder universities feel free to expand class sizes and hire people off of the street to teach required courses; instruction is just a small part of what these institutions now do, and since there are no accepted methods to judge the quality of undergraduate instruction or learning, there is no incentive for schools to put their resources into educational activities.
The lack of educational quality control in higher education results in a continual increase in tuition costs because universities have no incentive to concentrate their efforts and budgets on instruction. Since no one is rating or ranking these schools on what students are learning or how effective the professors are at teaching, these institutions feel free to spend student tuition dollars and state funding on expensive research and bloated bureaucracy. In fact, while most schools insist that students are not paying the full cost of their education, UC Berkeley professor, Charles Schwartz has shown that virtually every university inflates the advertised cost of education so that they can constantly raise tuition and use the added income to support profit-making ventures and risky financial investments.
Possible Solutions
To make the spending habits of universities more transparent and to make them prioritize undergraduate education, the first thing that has to be done is that the federal government needs to insist on a shared system for assessing instruction at American universities. Rather than basing a school's reputation on the SAT scores and the high school grade point averages of the incoming students, the new system of assessment should actually look at how much the students are learning in their classes and how effective the teachers are in promoting quality education. It is important to stress that this type of national quality control already exists, but universities refuse to publish the findings of the National Survey of Student Engagement (NSSE) and The Collegiate Learning Assessment (CLA). Instead of using these scientific methods of assessments, schools, students, and parents rely on highly questionable rating guides like The U.S News & World Report.
If education, and not just research and SAT scores, became the key to a school's reputation, these institutions would be forced to put money into instruction, and this process would reverse the current practice of using student tuition dollars to subsidize research and administration. Furthermore, once there is an accepted method for rating the quality of instruction, we can begin to drive down the costs. After all, what often makes tuition go up is that students and taxpayers are forced to fund the escalating salaries of professors and administrators who often have no connection to undergraduate instruction.
The next essential change for universities is to admit that some researchers should only research, and some teachers should only teach. Therefore, universities need to establish three types of professors: Teaching Professors, Research Professors, and Hybrid Professors. This model will help to clear up many problems because if we stop forcing all research professors into the classroom, we will be able to allow them to concentrate on what they do best and avoid what they sometimes do in an ineffective manner. In fact, the common practice of states and students paying for expensive research professors to teach ends up driving up the cost of instruction and allows people who have a proven record of being ineffective teachers to continue to lower the quality of instruction. Furthermore, the entire incentive system at research universities privileges research over teaching, and so for many research professors, we should simply make the research priority the rule and get rid of the false myth that research and teaching go hand-and-hand.
If we allow researchers to be rewarded for what they do best, we should also provide incentives for teachers to concentrate on instruction. By providing tenure for the people who do most of the teaching at research universities, undergraduate instruction can become an important priority. While some professors may say that by splitting research off from instruction, we are losing the whole point of going to a research university, studies show that the research mission often robs the instructional budget, and there is no proof that a good researcher will make a good teacher; in fact, the opposite is often the case. Once teaching becomes a priority and schools stop robbing their instructional budgets to pay for other things, it will be possible to teach students in small, interactive classes. Moreover, if we create a third class of professors, the hybrids, who would be judged equally for their research and their teaching, we can reward the people who do bring together new knowledge with effective instruction.
To help motivate research universities to make some of these changes, parents and students should sue schools for false advertising. The simple fact of the matter is that many universities present false information concerning class size and who really does the teaching at their institutions. Also, schools make inaccurate claims concerning the cost of undergraduate education, and by inflating budgets, tuition is driven up. Universities have to clearly state how they spend their money, and the federal government, which provides financial aid and research dollars to both private and public institutions, should be able to hold these institutions accountable. The government can also step in and stop guidebooks from using false and misleading information. After all, a college education is one of the most important and expensive purchases in a person's life, and accurate and truthful information should be provided.
Finally, the federal government must insist on budget transparency and a careful monitoring of how grants and endowment funds are managed. Currently, Senator Grassley is investigating how the UC medical schools are using NIH grants, and his office is trying to determine how billions of dollars of federal money are being allocated. His staff has insisted on an external audit of the medical schools' budgets, and so far the senator's office has been unable to determine if federal grants are being used for their intended use. This lack of budget transparency and clarity shows why we need to force universities to provide clear and reliable information. Without increased regulation and oversight, these institutions will continue to function as volatile hedge funds that ignore their central mission, which is after all instruction and not construction.
Distinguished Senior Fellow, Demos
Posted: January 28, 2010 04:45 PM
Staring into the swarm of politicians attending his State of the Union, President Obama seemed to be channeling Scott Brown, warning that for decades: "Washington has been telling us to wait." Although he'd been in Washington for a year, he was "us" again, as he had been during the campaign (as every President since Carter has been during their campaigns!) Back in campaign mode where he feels comfortable, again running against Washington, he was excoriating the business as usual partisanship of Congress and the insularity of Washington that were angering the American people. He even announced he was heading out of Washington to Tampa for a speech, clearly intending to put as much distance between himself and the Capital as he can in the coming weeks.
The President's distancing from Washington started last week when, shook up, he identified with Scott Brown's unexpected victory in Massachusetts. Speaking as he often does more like a political science professor studying the Presidency than like the President, Obama insisted "the same thing that swept Scott Brown into office swept me into office." He went on to cite that anger and resentment in the State of the Union, admitting he himself bore some "blame" for inadequate communication. In making the people's fury at Washington his own cause, he hit the nail on the head, and then drove it into the walls of Congress -- without however recognizing the daunting significance of what he was saying.
Scott Brown was elected against all odds not just because of health care, and not simply because Martha Coakley ran a complacent and foolish campaign, but because the American public has for thirty years been voting with vigor and virulence against... the American public. The public calls it "Washington" or "politics as usual" or "government" but the target is the Republic -- the public's democratic right to control its own destiny through public institutions and the "people's representatives" the people elect. The real struggle today is the struggle of the people against the public.
Pundits predicted Coakley's election would undo the majority's capacity to rule, but as the President pointed out last night, this is absurd. The Democrats still have a remarkable 18 vote majority in the Senate and a substantial majority in the House and they continue to occupy the White House even though its occupant may prefer to be elsewhere, out among "us." The problem is not with messy democratic politics but with the prevailing ideology of anti-politics that makes "Washington" a swear word and decouples "us" from "we" -- decouples the government "we" elect from the "us" that stands over and against Washington.
Fear of central government and distrust of political power go all the way back to the Founding. The American majority has never trusted the American majority. But it's gotten much worst recently. Ever since Jimmy Carter ran against Washington and Ronald Reagan proclaimed that government was the problem rather than the solution, Americans have perversely seen themselves as their own worst enemy. Anti-political ideology is everywhere -- in California's current financial plight, which goes back to Proposition 13 when the democratic referendum was used to enact a prohibition on the payment of taxes; in our bias against politicians, as if they float down from Mars rather than being our chosen delegates; and even in term limits, another sign of self-doubt where, like addicts, we hide the bottle of electoral alcohol from ourselves.
For a time in the 1980's, distrust of democracy seemed like a Republican prejudice, but the late 80's Democratic Leadership Council, presided over by Bill Clinton before he became President, made its peace with big business , and by 1994, President Clinton was echoing Ronald Reagan, announcing that the "era of big government is over." He then dismantled welfare and deregulated new media -- the new digital "public airwaves" that were once thought to belong to the public.
The new bi-partisan consensus agrees public is private and citizens just consumers. Those public airwaves? Let BIll Gates and Jeff Zucker run them. National security? We have DynCorps and Xe Services (aka Blackwater). Public option? The insurance companies can take care of it. Public goods? That's what markets are for.
The Supreme Court has just anointed the market's civic legitimacy by removing all limits on private corporate money spent on public elections. The aim of the First Amendment was to secure equality via multivocality. The Court's decision does precisely the opposite, privileging the powerful and skewing free expression. This decision is not however an aberration but a perfect expression of the people's current conviction that unleashing private money is itself a public good -- which is why Justice Alito was shaking his head in disbelief when the President criticized the decision in front of Congress. They may rag at banks, but the reality is that most Americans today fear their own public institutions far more than they fear private corporations deploying bottomless treasuries in the name of special interests, something Virginia Governor Bob McDonnell captured in his response to Obama when he said we have to "restore the proper, limited role of government at every level."
The conventional wisdom calls the rage of the American public against the Republican Party last year and the Democrats in Virginia, New Jersey and Massachusetts this year "populism," and pundits are asking today whether the President is trying to restore his own "populist" credentials. But when a democratic people rages against its chosen representatives and runs political campaigns against itself, when politicians who spend years in D.C. and define what "Washington" is then vilify it at every turn, it suggests not populism but democratic self-betrayal. It's not just that government serves us and protects us: it is us; which makes the antagonism to government a kind of civic self-loathing. When we vote against incumbents , we are really voting against ourselves incarnated as politicians, against what we did as citizens last time around.
If President Obama (or Senator Brown for that matter) hopes for a second term, he will have to persuade the public that the public interest is worth fighting for and that voting for and then throwing out the politicians they elect is not the meaning of citizenship. He will have to close the great divide he has helped create between Washington and us. Because both the President and the junior Senator from Massachusetts are now part of the establishment they ran against, and have joined the company of Washington insiders. In this era of the public versus the republic, unless they challenge the insidious politics of anti-politics with its virulent populism of self-betrayal, they are themselves likely in 2010 to become the public's newest public enemies.
Psychologist and neuroscientist; Emory University Professor
Posted: January 28, 2010 02:26 PM
If last year President Obama had trouble pleasing anyone -- he frustrated Democrats and Independents by seeming to come down repeatedly on the side of big business over ordinary Americans, whether the issue was health care or lending, and frustrated Republicans by, well, being a Democrat -- in his State of the Union Address last night he finally got to please everyone. He was amiable, funny, and feisty -- the Barack Obama we all want to know and love.
For Democrats, the President put the Republicans on the spot a few times with some populist proposals (e.g., stricter regulations on Wall Street) that they could either applaud or sit on their hands while average Americans watched in consternation. He told the story of how Bill Clinton had left the country with an enormous surplus that the Republicans had spun into a trillion-dollar deficit, with two unfunded wars, two unfunded rounds of tax cuts, and a big Medicare expansion to be paid for by the Medicare class of 2070.
For Independents, he took jabs at the kind of partisan bickering that people in the center neither "get" nor want to get. He took a dig at his own party for squandering their huge majority by not doing enough with it (ignoring the fact, of course, that he was the squanderer-in-chief, who encouraged his fellow Democrats to grab the health care bull by the horns and pull it in opposite directions for nine months). And he took a dig or two at the GOP for demanding 60 votes for every piece of legislation (although, truth be told, the GOP had no trouble passing legislation with 55 seats in the Senate when George W. Bush was President) and had a little fun at their expense when they grudgingly refused to applaud for all the tax cuts he'd doled out over the last year.
For Republicans, the President spoke like one of them more often than not, reinforcing their ideological commitment to low taxes and fiscal restraint and even adopting much of John McCain's proposal to freeze discretionary spending for three years. Aside from having criticized that idea himself during the campaign, it was an odd position to take in the midst of a severe recession, when every economist to the left of Chicago believes fiscal "restraint" will cancel out many of the laudatory effects of the stimulus package he touted and the jobs program he encouraged the Senate to follow the House in enacting.
For the populists who are angry at the big banks for their reckless behavior that crashed the economy -- which is just about all of us (except the fellahs who are about to get some of their biggest bonuses ever) -- there was satisfaction in knowing that the President was proposing, if not a pox on all their houses, a tax on all their banks (unless, of course, it actually passes, and they pass it along to the rest of us in creative new fees).
For the shrinking American middle class, he offered tax credits for college education, tax credits for child care, and a little help starting a nest egg for retirement.
For the environmentalists, he spoke of investments in the new energies of the future and warned that America can either lead in the new energy revolution, like it has led every other technological revolution of the last century, or fall behind.
And for the environmentally challenged, he promised nuclear plants that will require multi-billion-dollar federal subsidies to build (okay, he didn't mention that part), more offshore drilling (probably not a great idea for a President who spoke a moment later about the clear scientific evidence for climate change, unless you don't mind oil rigs breaking up during Category 5 hurricanes), and "clean coal" that can be used to power the high-pressure hoses that will be necessary to wash off all the "clean pigs" that I suppose someone will similarly develop the technology for when they figure out how to clean out the lungs of all the clean coal-miners.
For the hawks, we have 30,000 more soldiers in Afghanistan, and for the doves our combat troops will be out of Iraq by August.
And finally, for the progressives, there were those brief, fleeting lines about finally ending don't-ask-don't-tell (which the public overwhelming supported ending last year but the President just couldn't seem either to ask or tell the Congress to enact), equal pay for equal work (for all those women out there who weren't happy with his bartering away abortion for whatever was left at the end of the day of health care reform), and fixing our broken immigration system (for those who still remembered that campaign promise).
Years ago, a group of scientists known as Gestalt psychologists argued that the way we interpret the parts of something depends on the way we interpret the whole. Every introductory psychology student remembers the classic image they used to illustrate the point -- an image that can be seen as two faces or a vase, depending on which way you look at it.
And in that sense, the President's speech was either a thing of beauty -- an extraordinary appeal to his fellow citizens to overcome their differences and join in common cause despite them ("there is no red America, there is no blue America") -- or a masterful performance by a master chameleon who restored the ability of Americans, at least for a fleeting moment, to see in him whatever and whoever they hope he is.
Originally published on CNN.com.
Editor's note: Drew Westen is professor of psychology and psychiatry at Emory University, founder of Westen Strategies and author of "The Political Brain: The Role of Emotion in Deciding the Fate of the Nation." He has been a consultant or adviser to several Democratic candidates, nonprofit organizations and Fortune 500 companies, and informally advised Barack Obama's presidential campaign.
Former Secretary of Labor, Professor at Berkeley
Posted: January 28, 2010 10:04 PM
The President wants businesses that hire new employees this year to get $5,000 per hire, in the form of a tax credit. That will come to about $33 billion. It's good step. He's also supporting a cut in the capital gains tax for small businesses. That makes sense; after all, small businesses generate most jobs.
But here's the problem. Both of these measures, and many of the other tax cuts he's proposing, give ammunition to supply-siders who think the way out of this awful economy is simply to cut taxes on businesses. If a new jobs tax credit is a good idea, why not a cut corporate income taxes? If it's useful to reduce capital gains taxes for small businesses, why isn't it useful to reduce them for all businesses?
The answer, of course, is that across-the-board supply-side tax cuts for businesses don't increase the demand for the things businesses produce. They're useful only to the extent businesses are confident consumers are out there, able and willing to buy. Carefully targeted -- as are the cuts the President is proposing -- they can give businesses an extra nudge to hire. But without adequate demand, they're useless.
So what's the President's new proposal for boosting overall demand? Hmmm. Turns out, he's not really proposing anything new on that score. (Some who watched his State of the Union the other night thought they heard him call for a second stimulus. Actually, he didn't, and as far as I can tell he doesn't plan to.) His political advisors are telling him to emphasize deficit reduction instead. And that's what he did Wednesday night when he talked about a "freeze" on discretionary spending, and a "commission" to look for ways to cut the deficit.
I can understand why Obama's political advisors are pushing him in this direction. Many Americans borrowed too much during the boom years before the Great Recession, and now they're paying the price. So they naturally analogize their own plight to that of the federal government and the economy as a whole. The government is too deep in debt, they reason. Logically, that means the only way out of the nation's economic doldrums is for the government to mend its ways. The government has to reduce its budget deficit just like American families have to reduce theirs.
This analogy is faulty, of course. If John Maynard Keynes taught us anything, it's that a federal budget is not at all like a family budget. In fact, it's precisely because families have to pull in their belts that the federal government has to let its belt out. When consumers and businesses aren't buying much of anything, the government has to fill the gap. That's the only way to get jobs and get the economy moving again. Once the economy is percolating, the government can pull back. By then, tax revenues will soar, and the long-term deficit will shrink. (And yes, entitlement reform is probably necessary in the long term. But here again, it's vitally important to separate the long term from the now.)
But if the public learns the wrong set of lessons -- that tax cuts for businesses are good, and deficit reduction starting now is good -- there's no hope for getting wise policies out of Congress. The debate is framed all wrong.
The President -- any president -- is the nation's educator in chief. Everything he proposes contains an implicit lesson. The economic lesson President Obama ought to be teaching is that targeted tax cuts, mostly for small business, are good to the extent they give businesses a nudge toward creating more jobs. But businesses won't begin to create lots of jobs until they have lots of customers. And that won't happen until lots more Americans have work. The only way to get them work when businesses aren't hiring is for government to prime the pump.
One final lesson I wish he'd teach: The best and fastest way for government to prime the pump is to help states and locales, which are now doing the opposite. They're laying off teachers, police officers, social workers, health care workers, and many more who provide vital public services. And they're increasing taxes and fees. They have no choice. State constitutions require them to balance their budgets. But the result is to negate much of what the federal government has tried to do with its stimulus to date.
We need a second stimulus directed at states and locales. I wish our educator-in-chief would say that loud and clear, explain why, and then do it.
The "Devastating" Decision
Ronald Dworkin
Professor of Philosophy and Law, NYU – January 28
Against the opposition of their four colleagues, five right-wing Supreme Court justices have now guaranteed that big corporations can spend unlimited funds on political advertising in any political election. In an opinion written by Justice Anthony Kennedy and joined by Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia, and Clarence Thomas, the Court overruled established precedents and declared dozens of national and state statutes unconstitutional, including the McCain-Feingold Act, which forbade corporate or union television advertising that endorses or opposes a particular candidate.
This appalling decision, in Citizens United v. Federal Election Commission, was quickly denounced by President Obama as “devastating”; he said that it “strikes at our democracy itself.” In his State of the Union speech of January 27, he said, “Last week, the Supreme Court reversed a century of law that I believe will open the floodgates for special interests—including foreign corporations—to spend without limit in our elections.” He is right: the decision will further weaken the quality and fairness of our politics.
The Court has given lobbyists, already much too powerful, a nuclear weapon. Some lawyers have predicted that corporations will not take full advantage of it: they will want to keep their money for their business. But that would still permit carefully targeted threats. What legislator tempted to vote for health care reform or Obama’s banking reorganization would be indifferent to the prospect that his reelection campaign could be swamped in a tsunami of expensive negative advertising? How many corporations fearful of environmental or product liability litigation would pass up the chance to tip the balance in a state judicial election?
On the most generous understanding the decision displays the five justices’ instinctive favoritism of corporate interests. But some commentators, including The New York Times, have suggested a darker interpretation. The five justices may have assumed that allowing corporations to spend freely against candidates would favor Republicans; perhaps they overruled long-established laws and precedents out of partisan zeal. If so, their decision would stand beside the Court’s 2000 decision in Bush v. Gore as an unprincipled political act with terrible consequences for the nation.
We should notice not just the bad consequences of the decision, however, but the poor quality of the arguments Justice Kennedy offered to defend it. The conservative justices savaged canons of judicial restraint they themselves have long praised. Chief Justice Roberts takes every opportunity to repeat what he said, under oath, in his Senate nomination hearings: that the Supreme Court should avoid declaring any statute unconstitutional unless it cannot decide the case before it in any other way. Now consider how shamelessly he and the other justices who voted with the majority ignored that constraint in their haste to declare the McCain-Feingold Act unconstitutional in time for the coming midterm elections.
Citizens United, a small nonprofit corporation almost entirely financed by individual contributions, had made a very negative film about Hillary Clinton. It asked the Court only to rule that its method of distributing that film, on a video-on-demand service, was not outlawed by the Act. It offered several arguments, some of them plausible, for interpreting the Act that way. So the Court did not have to decide whether to overrule the Act: it could have agreed with Citizens United while reserving that larger question. But after they first heard arguments in the case, the five justices declared that they wanted, on their own initiative, to consider declaring the Act unconstitutional. They introduced that unnecessary issue themselves and then scheduled an emergency special hearing during the summer so that they could strike down the statute as quickly as possible.
Justice Kennedy, in his opinion for the 5-4 majority, tried to explain why that was necessary. It would have been possible, he conceded, to interpret the McCain-Feingold Act’s prohibition of corporate “broadcast, cable, or satellite” electioneering that is “publicly distributed” as not applying to video-on-demand TV. But he declined this strategy because transmission technology could be expected to change, so that the Court would be required to revisit the issue time and time again. He did not explain why the Court could not have drafted a general principle interpreting the statute to guide future decisions as technology develops, as it has in so many other cases. For example, the Court’s doctrine of “reasonable expectation of privacy” is designed to adapt to evolving technology of surveillance and spying.
The conservative justices also had to overrule two of the Court’s prior decisions—its 1990 Austin and 2003 McConnell decisions. In his Senate hearings, Roberts declared his great respect for judicial precedent: he said that just because he thought that an earlier Court decision had been wrongly decided or poorly argued would be no reason to overrule it. It would have to have proved unworkable or its basis in principle would have to have been eroded by other intervening decisions. Kennedy offered no evidence that restrictions on corporate electioneering had proved unworkable, which is not surprising because such restrictions had been in place since 1907.
Instead he argued that the two decisions were themselves inconsistent with other precedents. But as Justice John Paul Stevens pointed out in his long and impressive dissenting opinion, Kennedy was able to cite only one past decision actually to that point: the Court’s 1978 Bellotti decision, in which it in fact denied what Kennedy takes it to have held. “Our consideration of a corporation’s right to speak on issues of general public interest,” the Court stated in that case, “implies no comparable right in the quite different context of participation in a political campaign for election to public office.” Kennedy disregarded that clear statement because, he said, it occurred in “a single footnote.” But that is a natural place for a clarification; and Kennedy’s suggested distinction between text and note is entirely novel. Some of the Court’s footnotes have proved much more important than the decisions to which they were attached.
The main theoretical flaw in Kennedy’s opinion is different, however. The opinion announces and perpetuates a shallow, simplistic understanding of the First Amendment, one that actually undermines one of the most basic purposes of free speech, which is to protect democracy. The nerve of his argument—-that corporations must be treated like real people under the First Amendment—is in my view preposterous. Corporations are legal fictions. They have no opinions of their own to contribute and no rights to participate with equal voice or vote in politics.
Kennedy’s opinion left Americans very little room to protect themselves against this further degradation of their democracy. But it did leave some. He acknowledged that the ruling does not prevent Congress from requiring reasonable disclosures and disclaimers in corporate advertising. I believe Congress should require a prominent statement in every such ad disclosing any corporate sponsors and declaring that their support represents the opinion of the corporation’s officers, who have a duty to promote the corporation’s own interests, and not necessarily the opinion of any of their shareholders who are actually paying for the ad.
I hope to discuss this and other suggestions for legislation—as well as the poor quality of the arguments offered by Justice Kennedy, and the potential consequences of the decision—in more detail in a future issue of The New York Review.
Don't Look to Washington for Help
Rule by the Rich
By PAUL CRAIG ROBERTS
The election of Republican Scott Brown to the U.S. Senate by Democratic voters in Massachusetts sends President Obama a message. Voters perceive that Obama’s administration has morphed into a Bush-Cheney government. Obama has reneged on every promise he made, from ending wars, to closing Gitmo, to providing health care for Americans, to curtailing the domestic police state, to putting the interests of dispossessed Americans ahead of the interests of the rich banksters who robbed Americans of their homes and pensions.
But what can Obama do other then spout more rhetoric?
The Democrats were destroyed as an independent party by jobs offshoring and so-called free trade agreements such as NAFTA. The effect of "globalism" has been to destroy the industrial and manufacturing unions, thus leaving the Democrats without a power base and source of funding.
Obama and the Democrats cannot be an opposition party, because Democrats are as dependent as Republicans on corporate interest groups forcampaign funding.
The Democrats have to support war and the police state if they want funding from the military/security complex. They have to make the health care bill into a subsidy for private insurance if they want funding from the insurance companies. They have to abandon the American people for the rich banksters if they want funding from the financial lobby.
Now that the five Republicans on the Supreme Court have overturned decades of U.S. law and given corporations the ability to buy every American election, Democrats and Republicans can be nothing but pawns for a plutocracy.
Most Americans are hard pressed, but the corporations have only begun to milk them.
Wars are too profitable for the armaments industry to ever end. High unemployment is now a permanent state in the U.S., thus coercing job seekers into military service.
The security industry profits from the police state and regards civil liberties as a hindrance to profits. By announcing that he intends to continue the Bush policy of indefinite detention, a violation of the Constitution and U.S. legal procedures, Obama has granted the Democratic Party’s consent to the Republicans’ destruction of habeas corpus, the main bastion of individual liberty.
Jobs offshoring is too profitable for U.S. corporations for Obama to be able to save American jobs and restart the broken economy.
Americans are being squeezed out of health care not only by the loss of job benefits, but also by corporate takeover of medical practice from physicians. Today medical doctors are wage slaves of corporate health providers that leverage doctors by turning them into supervisors of physician assistants, lower paid people without medical degrees who perform the services that doctors once provided. As neither doctor nor physician assistant has any independence, there is no one to represent the patient’s care against the profits of the corporation.
Even environmental concerns are being used to create "cap and trade" rights to buy and sell the ability to pollute. Wall Street is licking its lips over a new source of leveraged derivative instruments.
The American public cannot even get reliable information about their plight as the "mainstream media" has been concentrated into a few corporate hands that do not permit independent reporting. The media is as dependent on corporate money as are politicians.
How can President Obama restart an economy that has been moved offshore? Millions of manufacturing jobs are gone, as are millions of jobs for college graduates, such as software engineering, Information Technology--indeed, any intellectual skill the product of which can be conveyed via the Internet. Even those intellectual skill jobs that do remain in the U.S. are filled increasingly by foreigners brought in on work visas.
The wipeout of blue collar and middle class job growth has stopped the growth of American incomes except, of course, those of the super rich. For a decade American consumers substituted increased personal indebtedness for income growth. In order to maintain and to increase their consumption, Americans consumed their assets, such as their home equity. Americans reached their maximum debt load just as the real estate bubble burst and just as the banksters highly-leveraged, toxic financial instruments brought down the stock market and the values of Americans’ pensions.
The enormous damage done to the U.S. economy by jobs offshoring, work visas, and financial deregulation cannot be offset by government stimulus plans, which expand the debt burdens that are crushing Americans. The federal government’s massive budget deficits and the Federal Reserve’s easy monetary policy are setting the stage for an inflationary depression to follow a deflationary depression.
The Federal Reserve chairman says not to worry about inflation, because the Fed can take the money back out of the economy. But can the Fed take the money out without contracting the economy?
The Federal Reserve says not to worry about financing the federal budget deficit. Banksters are buying the Treasury bonds with the proceeds from their sales of their toxic derivatives to the Fed.
So what is happening to the Federal Reserve’s balance sheet? And when will the Fed have no recourse but to print new money in order to finance the federal deficit?
How long can the dollar retain its reserve currency role in such circumstances, and how does the U.S. pay for its imports when this role is lost?
Don’t look to Washington for answers to these questions.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He is the author of How the Economy was Lost, just published by CounterPunch / AK Press.He can be reached at:PaulCraigRoberts@yahoo.com
Wednesday 27 January 2010
by: Jim Hightower, t r u t h o u t | Op-Ed
Despite 234 years of progress toward the American ideal of equality for all, we still have to battle unfairness.
How happy, then, to learn that a handful of our leaders in Washington took bold and forceful action last week to lift another group of downtrodden Americans from the pits of injustice, helping them gain more political and governmental power. I refer, of course, to corporations.
Say what? Corporations should get more power over our elected officials?
"Free the corporate money," cried the movement's leaders, demanding that America sever the few legal restraints that remain on corporate efforts to buy our elections. "Si, se puede," chanted these assertive champions of corporate supremacy -- "Yes, we can!"
So, they did. "They" being the five doctrinaire corporatists who now form the majority on the U.S. Supreme Court. Let's remember their names: Sam Alito, Anthony Kennedy, John Roberts, Antonin Scalia and Clarence Thomas. These five men, on their own whim, have executed a black-robed coup against the American people's democratic authority.
They took an obscure case involving a minor violation of election funding law and turned it into a constitutional upheaval. Rushing their handpicked case through the system, they issued a 5-4 decision on Jan. 21 that overturns a century of settled American law and more than two centuries of deep agreement in our Land of the Free that the narrow interests of corporations must be subjugated to the public interest.
Indeed, the founders of our Republic saw corporate power as an inherently selfish and perpetual danger to democracy, and most leaders of that day believed that corporate entities should have no role whatsoever in politics. Thomas Jefferson bluntly declared in 1816 that the country must "crush in its birth the aristocracy of our moneyed corporations."
The Alito-Kennedy-Roberts-Scalia-Thomas cabal, however, has unceremoniously dumped the wisdom of the founders, along with volumes of American judicial precedent, to assert that poor little corporations today are victims of political "censorship" by Congress, states and cities that have outlawed the use of corporate funds in elections. Such restrictions, ruled the five usurpers, violate the "free speech rights" of corporations, putting corporate interests at a disadvantage with other political interests.
Disadvantage? This would be hilarious, were it not so dangerous. No other group in American has anywhere near the voice and raw political power that corporations exert every day. Campaign donations from individual corporate executives (and from their PACs, 527s, front groups and other channels) total hundreds of millions of dollars each election year, effectively shouting down the voices of ordinary folks (the Wall Street bailout being but one sterling example).
Yet the Court has just handed these political powerhouses their wildest dream: access to the multi- trillion- dollar ocean of funds held within the corporate entities themselves. Every business empire -- from Wall Street to Wal-Mart, Exxon Mobil to the China Overseas Shipping Company (yes, the five wise guys even waved foreign corporations into our political funfest) -- can now open the spigots of their vast corporate treasuries and send a raging torrent of their special interest cash into any and all of our national, state and local elections.
Two legal perversions are at work here. First, the Court has equated the freedom to spend money with the freedom of speech. But if money is speech, those with the most money get the most speech. That's plutocracy, not democracy, and it's totally alien to our Constitution, as well as a gross distortion of the crucial principle of one person-one vote.
Second, a corporation literally cannot speak. It has no lips, tongue, breath or brain. Far from being a "person," a corporation is nothing but a piece of paper -- a legal construct created by the state as a mechanism for its owners to make money.
Actual people in the mechanism (shareholders, executives, workers, retirees, lenders, et al.) can and do speak politically -- in many diverse voices that express very different viewpoints. But the corporate entity, which the court cabal is trying to turn into a Frankenstein monster, is inanimate, incapable of thought, inherently mute and, in itself, no more deserving of human rights than a trash can would be.
Published on Thursday, January 28, 2010 by CommonDreams.org
The Source of Corporate Power
by Robert C. Koehler
"If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech."
The words are those of Justice Anthony M. Kennedy, writing for the majority in last week's landmark Supreme Court decision marking some sort of culmination in the long corporate trek to personhood. It's the word "simply" that gets to me: Exxon-Pinocchio is a real boy now, and has his opinions, and the government has no right to stop him from "simply engaging in political speech."
What a cheap cover story; it's up there with "bringing democracy to Iraq" in its tawdry manipulation of iconic national values to justify a raw power grab. The 5-4 decision in the long-awaited Citizens United vs. Federal Election Commission case overturns restrictions on corporate spending to influence election results, giving entities with millions (in some cases, billions) of dollars at their disposal unlimited license to electioneer for the candidate with the friendliest attitude toward their interests.
The tendency of money and power is to concentrate, of course. The big trick, from a human perspective, is to make sure our core values remain pre-eminent, that they are served by the ways in which we concentrate power. Democracy is the great mechanism for doing so, the hope of the world, or so we are told, but the wakeup message in this nakedly cynical ruling by the Roberts Court, with its slim (but sufficient) right-wing majority, is that the concept of democracy is mortally wounded.
As former Sen. Bob Kerrey wrote recently on Huffington Post: "Instead of doing the nation's business, elected officials are spending a third of their time or more dialing for special interest dollars in never-ending campaigns for re-election.
"Industry lobbyists," he goes on, "are helping to write the very bills in Congress that affect their bottom line, placing private profit ahead of the public good. Billions of taxpayer dollars are going to benefit big contributors through earmarks, subsidies, and special regulations."
And as Chris Hedges explains on TruthDig: "Corporations have 35,000 lobbyists in Washington and thousands more in state capitals that dole out corporate money to shape and write legislation."
The interests of Big Oil, Big Pharma, Big Coal, agribusiness, the financial sector, the insurance sector and, of course, the military-industrial complex, have infinitely more clout in government than the collective popular will and the voices calling for eco-sanity, universal health care and an end to war. Note: This is already the case.
Corporate entities have thoroughly gamed the system, leaving us with little more than a textbook-democracy façade. What the latest Supreme Court decision does is legitimize all this, shoving the corruption in our faces by declaring the absurd: Corporations are people too! They have a right to weigh in on the candidates just like the rest of us - to get their billion-dollar opinions out to the public throughout the election campaign.
This is an "activist" judicial decision, that is to say, a decision that serves a prior agenda, with any principles cited (e.g., the sanctity of free speech) sheer window dressing in service to a larger, and covert, cause.
As a New York Times story points out, the case itself - involving a conservative, not-for-profit corporation called Citizens United, which was restricted in its ability to distribute an attack film about Hillary Clinton, "Hillary: The Movie," during the 2008 presidential primary elections - could have been decided on narrow grounds. The court chose instead to expand the scope of the case, making it into a challenge of existing laws that regulate corporate election spending, most notably the Bipartisan Campaign Reform Act of 2002, a.k.a. McCain-Feingold, which prohibits corporate electioneering within 60 days of an election. This is what we've lost.
The good news is that the decision has generated a huge outpouring of anger around the country. Within a day of the ruling, the website MoveToAmend.org had garnered some 40,000 signatures (it's now close to 50,000) in support of a constitutional amendment to establish that money is not speech and only human beings have constitutional rights. The amendment would also guarantee our right to vote and participate in elections, and to have our votes count.
A number of bills and legislative actions are also in the works, attempting to circumvent the Supremes. The proposals range from patch jobs to cries for profound change, both of which are necessary in the process of resuscitating democracy.
No matter what, though, the Roberts Court has hastened the propagandizing of the national discourse, mostly through the medium of television, as corporate interests amp up their thought-control machines in the name of free speech. I see little hope for a gullible nation that allows the tube to hemorrhage urgent inanities directly into its consciousness for 18 hours a day. This gullibility is the source of corporate power. Democracy can only thrive where people think for themselves.
People's Historian and Progressive Hero Howard Zinn Dies
From the Boston Globe:
Howard Zinn, the Boston University historian and political activist who was an early opponent of US involvement in Vietnam... died of a heart attack today in Santa Monica, Calif, where he was traveling, his family said. He was 87.
“His writings have changed the consciousness of a generation, and helped open new paths to understanding and its crucial meaning for our lives,” Noam Chomsky, the left-wing activist and MIT professor, once wrote of Dr. Zinn. “When action has been called for, one could always be confident that he would be on the front lines, an example and trustworthy guide.”
For Dr. Zinn, activism was a natural extension of the revisionist brand of history he taught. Dr. Zinn’s best-known book, “A People’s History of the United States” (1980), had for its heroes not the Founding Fathers — many of them slaveholders and deeply attached to the status quo, as Dr. Zinn was quick to point out — but rather the farmers of Shays’ Rebellion and the union organizers of the 1930s.
As he wrote in his autobiography, “You Can’t Be Neutral on a Moving Train” (1994), “From the start, my teaching was infused with my own history. I would try to be fair to other points of view, but I wanted more than ‘objectivity’; I wanted students to leave my classes not just better informed, but more prepared to relinquish the safety of silence, more prepared to speak up, to act against injustice wherever they saw it. This, of course, was a recipe for trouble.”
... Dr. Zinn was born in New York City on Aug. 24, 1922, the son of Jewish immigrants, Edward Zinn, a waiter, and Jennie (Rabinowitz) Zinn, a housewife. He attended New York public schools and worked in the Brooklyn Navy Yard before joining the Army Air Force during World War II. Serving as a bombardier in the Eighth Air Force, he won the Air Medal and attained the rank of second lieutenant.
After the war, Dr. Zinn worked at a series of menial jobs until entering New York University as a 27-year-old freshman on the GI Bill. Professor Zinn, who had married Roslyn Shechter in 1944, worked nights in a warehouse loading trucks to support his studies. He received his bachelor’s degree from NYU, followed by master’s and doctoral degrees in history from Columbia University.
Dr. Zinn was an instructor at Upsala College and lecturer at Brooklyn College before joining the faculty of Spelman College in Atlanta, in 1956. He served at the historically black women’s institution as chairman of the history department. Among his students were the novelist Alice Walker, who called him “the best teacher I ever had,” and Marian Wright Edelman, future head of the Children’s Defense Fund.
AlterNet published Bill Moyers' interview with Zinn from December: "Democracy doesn't come from the top. It comes from the bottom. Democracy is not what governments do. It's what people do." Click here to read AlterNet's archive of Zinn's articles.
State of the Union: Why Is Obama Still Clinging Bipartisanship?
By John Nichols, TheNation.com
Posted on January 27, 2010, Printed on January 28, 2010
http://www.alternet.org/story/145463/
Say what you will about Barack Obama.
But don't accuse the president of veering from the course he charted at a point when his term was new, his popularity ratings were high and Americans took seriously all that talk of "hope" and "change."
Despite the battering he has taken during his first year in the White House, despite suffering a serious drop in his personal approval ratings, despite the frustration and disenchantment that gave the Senate seat from the deep blue state of Massachusetts to the opposition Republicans, Obama used his initial State of the Union address to renew the call for the health care reform initiative that was the primary focus of his difficult first year in office.
"Don't walk away from reform -- not now, not when we are so close," the president pleaded with the Congress.
"By the time I'm finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Co-pays will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether," he declared, in the signature line of his speech. "I will not walk away from these Americans. And neither should the people in this chamber."
The president admitted that he bumbled the push for health reform, even drawing warm laughter when he said: "I did not choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn't take on health care because it was good politics. But remember this-- I never suggested that change would be easy, or that I can do it alone."
He also acknowledged that his first year in office was a tough one: "I campaigned on the promise of change -- change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change -- or at least, that I can deliver it."
Yet, Obama still did not seem to "get" the politics of the moment.
Speaking at a point when the year-long effort to enact fundamental health-care reforms has stumbled badly -- in the face of united Republican opposition, wrangling between House and Senate Democrats and unfocused messaging from the president -- Obama made a renewed effort to find the common ground that has eluded almost everyone in Washington.
Remarkably, the president clung to the hope for bipartisanship that was dashed at every turn in 2009 -- either with outright rejection by the "party of 'no'" or, worse yet, via compromises that handed ultimate authority over policy-making to Republican senators who diverted stimulus funding from job creation to tax cuts for the rich and Democrat-In-Name-Only Ben Nelson and Republican-In-Everything-But-Name Joe Lieberman, who forced the Senate to scrap the public option that was needed to challenge the grip of health insurance companies.
"We face big and difficult challenges. And what the American people hope what they deserve -- is for all of us, Democrats and Republicans, to work through our differences; to overcome the numbing weight of our politics," said the president, whose repeated references to bipartisanship made clear that he is not ready to adopt the fighting stance that might rally the Democratic base for a serious fight to use the party's majorities in the House and Senate to initiate meaningful reforms.
This was not a rally-the-base speech.
It was a speech that, at many turns, sounded as if it was written a year ago -- before Obama saw his domestic agenda blocked at so many turns.
It was this tone-deaf quality that made Obama's speech a less-than-inspired statement.
Even when Obama outlined what sounded like an activist agenda, he generally restated 2008 campaign promises that were not kept during his first year as president.
In particular:
* To suggest a commitment to job creation, he dusted off one of his presidential campaign's less-impressive position papers on using tax cuts to get small businesses hiring. In particular, the president called for eliminating capital-gains taxes on investments in small businesses and for giving small employers a tax credit for new hires.
* He repeated old promises to create clean-energy jobs and to end aid to businesses that are off-shoring jobs and facilities.
* Even as said "we all hated the bank bailout" ("it's about as popular as a root canal"), Obama defended the giveaway to big banks as a necessary, even courageous, move. And he only offered up a little of the populism that should have defined the speech, with a proposal to recover bailout bucks by placing a fee on the biggest banks. "I know Wall Street isn't keen on this idea," he declared, "but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need."
* He announced, "It's time to get serious about financial reform." But the details were missing.
* He called for the repeal of the military's "don't ask, don't tell" policy, which discriminates against openly gay and lesbian people who want to serve in the military by requiring their discharge if they tell fellow service members about their sexuality. But he still left the issue to Congress, eschewing calls for him to act as commander-in-chief and simply issue an executive order.
Obama seemed throughout the speech to be struggling to balance an understanding of the need for activist government -- especially in the struggle to reduce a brutal double-digit unemployment rate -- with a political calculation that he must mouth empty rhetoric about cutting taxes, capping spending and fretting about deficits. (Obama made his call for a freeze on domestic spending but drew giggles from all sides when he said it would not be implemented until next year.)
The result was an address that, at too many turns, seemed either tepid or numbingly predictable -- and that at other turns was just plain wrong ("we need a new generation of safe, clean nuclear power plants.") The president still hasn't figured out that bragging about the success of last year's stimulus bill cannot trump the fact that unemployment is two percentage points higher than was promised at the time the measure was enacted. He doesn't seem to recognize that his own party has abandoned the cap-and-trade initiatives he mentioned ever so briefly Wednesday night. And his "I'm for free trade, er, no, I'm for fair trade, er, no, free trade, er, no fair trade" line was so deliberately vapid as to be insulting.
So it was that the highlight of the speech was not the renewed call for health-care reform or the new talk of economic renewal.
It was his cry for real reform of our politics, even in the face of the Supreme Court's decision, in the case of Citizens United v. FEC, to let corporations buy elections.
"(It's) time to put strict limits on the contributions that lobbyists give to candidates for federal office. Last week, the Supreme Court reversed a century of law to open the floodgates for special interests –- including foreign companies –- to spend without limit in our elections," Obama told the Congress. "Well I don't think American elections should be bankrolled by America's most powerful interests, and worse, by foreign entities. They should be decided by the American people, and that's why I'm urging Democrats and Republicans to pass a bill that helps to right this wrong."
The president's message on campaign reform was right.
But it should have been more muscular, more central to the overall statement.
The president should have made the Supreme Court's lawless decision the focus of his speech -- as part of a broader riff on what's wrong with Washington. But he didn't go for it.
And that's the bottom line. In his first State of the Union address, the president should havegone for it. But he pulled a few too many punches, sounded a little too many old themes and fell a little too short of the mark.
This was not a bad speech. Obama can't really give a bad speech.
But nor was it a game-changing address. Rather, it was the statement of a man who is not quite ready to abandon the goals or the preconceived notions with which he began his presidency. If consistency is a virtue, then this was a virtuous speech. But if consistency has its risks, especially in the face of changing circumstances, then this was a very risky speech.
Instead of rallying the base, President Obama chose to preach the gospel of bipartisanship. Instead of offering America a bold new agenda, or at least an edgier style, the president chose to recall old themes. Instead of accepting that the approaches of 2009 did not work, the president signaled that they will be repeated in 2010.
John Nichols is The Nation's Washington correspondent.
Published on Wednesday, January 27, 2010 by TruthDig.com
The Sorry State of the Union
by Robert Scheer
The state of the union is just miserable, no matter how President Obama sugarcoats it. He will claim that progress has been made in stabilizing the markets, increasing national security and advancing toward meaningful health care reform, but he will be wrong on all three counts.
What he will be right about is that none of these problems were originally of his creation, and that the opposition party wants to exacerbate rather than solve any of them - believing, as they do, in that destructive maxim of desperate losers who find their salvation in the stumbles of the winners.
There is no doubt that Obama and his party represent the lesser evil, but it is deeply disturbing to have to defend the leaders of our nation in those terms. They were supposed to lead us to peace, but as the cables from the U.S. ambassador to Afghanistan to Secretary of State Hillary Clinton, printed in The New York Times on Monday, make absolutely clear, the escalation in Afghanistan is tantamount to a disaster without end. Ambassador Karl W. Eikenberry, a retired lieutenant general who was previously the top American commander in Afghanistan, warned: "Sending additional forces will delay the day when Afghans will take over, and make it difficult, if not impossible, to bring our people home on a reasonable timetable."
Obama distracted progressives with a grand crusade for health care reform that reasserted the fundamental fallacy of the previous health reform effort of the Clinton years: Give the insurance companies a captive universal market under the absurd illusion that we can control costs without undermining their greed with a competitive government-run option.
The same is the case with the collapse of the economy, as Obama shamefully continued the Bush administration's mugging of U.S. taxpayers by throwing trillions of dollars at the Wall Street bandits who caused the financial meltdown. Meanwhile, 7 million Americans have lost their jobs and 15 million families owe more on their homes than they are worth.
Someday our president, whom I still regard as a decent and well-intentioned politician, will have to confront the demons of that fatal opportunism that led him to turn over the economy to the likes of Lawrence Summers and Timothy Geithner, who can most charitably be described as hugely successful Wall Street pimps. Obama knows of Summers' devilish role, during his time in the Clinton administration, in pushing the radical deregulation of the markets that the president blamed last week for our economic debacle. And he is aware that the TARP inspector general is hot on Geithner's heels for his role, as head of the New York Fed, in the funneling of $62 billion dollars through AIG to Goldman Sachs and the other bonus payout alchemists.
But there is no indication from the carefully orchestrated leaks of his State of the Union speech that Obama is truly set to reverse course. Rhetoric about the "fat cat" bankers aside, his policies represent more of the same. There will be some hokey gestures of support for the disappearing middle class, but at the heart of his new budget proposal are cuts in needed domestic spending for education, nutrition, air traffic control and just about every other worthwhile domestic program. But there are no cuts for the military budget that already makes up 60% of the federal government's discretionary spending and is comparable to the total military budget for the rest of the world's nations combined.
Budget director Peter Orszag, who is overseeing those cuts, is, like Summers and Geithner, a disciple of former Clinton Treasury Secretary Robert Rubin, whose radical deregulatory policies brought us to this point. Orszag's freeze on domestic spending, projected for the rest of Obama's term, will reduce the domestic budget to its lowest percentage in 50 years. That portion of the discretionary budget is already so small that the proposed cuts will save a scant $10 billion to $15 billion next year-chump change compared to the $145 billion in bonuses for Wall Street's high rollers dispensed after a year of massive national suffering that they engineered.
Shame on Obama for now telling us after wasting many trillions on Wall Street and the Pentagon, that he will now seek to balance the biggest indebtedness in U.S. history not by cutting from that greasy pork but rather into the bone of our civic life, found in funding for schools and other desperately needed social services. That is the opposite of a New Deal for ordinary folks in need of their government's assistance more than at any other time since the days of that last great Democratic president, Franklin Delano Roosevelt. Will we ever have another?
Obama and Volcker Must Go After the Big Banks
By Nomi Prins, AlterNet
Posted on January 27, 2010, Printed on January 27, 2010
http://www.alternet.org/story/145437/
Thus far, President Obama’s financial reform strategy has reeked of political expediency—talk tough to Wall Street, act gentle, ride out the populist anti-banker tide, hope for the best, change nothing. But Obama may have awakened to the smell of one-term coffee after last week’s Massachusetts Senate race results. It's certainly heartening to see Obama eschewing the advice of Wall Street-placating Treasury Secretary Timothy Geithner for that of the sager, former Federal Reserve Chairman Paul Volcker. Nevertheless, demonstrating the serious financial reform behind the political fluff talk will take more than a stint of administrative realignment.
Big bank stocks tanked after Obama rolled out the new Volcker rule, and mainstream media headlines attributed the declines to investor concerns that the crazy days of unregulated bank trading will be coming to an end. But the President's actual proposals were not enough to seriously rattle anyone on Wall Street. If anything, the banks were fretting over the prospect of losing the tag-team of Geithner and Fed Chief Ben Bernanke, whose joint brainpower has showered $6.4 trillion in subsidies upon the industry.
Anxious about his own political survival, Geithner rushed to warn us that the markets would be in worse shape if Bernanke were pushed out, a proclamation that put bank stocks back on the ascent—hooray for the bailout-backers! Geithner has spent years working as a lackey for our biggest banks and knows he's got "fall guy" written all over him, so he's been covering his tracks of late. (We'll see just how well at today's AIG hearing before the House Oversight Committee.) He'll be going on the offensive until someone on his own team decides he's expendable. It would be nice if Obama figured that out and chucked Geithner out before he deals out any more damage.
The until-recently-sidelined Volcker is a better fit for popular opinion. He has both criticized the insane subsidies the government is funneling to the financial sector, and offered serious, concrete ways to reduce the risks reckless banks foist on the public. But Obama’s Volcker-inspired proposal falls far short of the full Glass-Steagall resurrection that is needed to truly stabilize the financial system (along with a handful of other smaller-bore regulations).
Glass-Steagall barred the combination of risky, high-flying investment banking with boring commercial lending—accepting deposits and making loans. But Volcker's ideas only take aim at a relatively small portion of the risks embedded in the investment banking business. As long as commercial lending and investment businesses remain intertwined under the same umbrella, financial behemoths will still be inclined to gamble their capital in securities trading rather than support the economy by lending to businesses and consumers. Given all the cheap money banks can currently get from the federal government, they have no obligation to do otherwise. When markets go up, securities trading is inherently more profitable, since, after all, the markets are up. For banks, the more trading they can do, the more easy profits they can score.
Volcker has always maintained that it would be difficult to explicitly break up the banks in a true Glass-Steagall sense. He has focused on ways to reduce their most obvious, unnecessary risk-taking activities and cut them off from some forms of taxpayer assistance in a bind. Yet Volcker would still allow boring commercial banks to perform securities underwriting, package mortgages into crazy securities and engage in risky asset lending—as long as these were "client-driven" activities.
What is "client-driven" trading? Well, it's the vast majority of what we ordinarily think of as risky trading activities.
These ideas represent the core of Obama's latest bank reform plan. Banks that accept federally guaranteed deposits wouldn’t be able to own, invest or sponsor hedge or private equity funds, nor could they run propriety trading operations (betting their own capital for the hell of it). There would be no limits on investment banks that don't accept deposits, no limits on independent hedge funds or private equity firms, and no return to Glass-Steagall.
The major problem with the Volcker rule is that it only bans "prop trading," when it should ban all trading at economically essential commercial banks. As it stands now, the plan would be a minor inconvenience to Goldman Sachs and Morgan Stanley; if they wanted to keep their hedge funds, they’d have to give up their Bank Holding Company status and their cheap loans from the Fed. My guess is they'll simply negotiate a grandfather clause and keep the BHC banner, but even if it were revoked, the Volcker plan is too little, too late. The Fed granted BHC status to Goldman and Morgan in the middle of the crisis to give them access to billions of dollars of government backing. Even if it's revoked now, we know it can be given back when another crisis hits.
Banning prop trading alone won't be enough to stabilize investment banks like Goldman Sachs, much less commercial banks that actually do something for the economy. Of all the bank holding companies, the only firm with any kind of remotely large-scale prop operation is Goldman Sachs, which CFO David Viniar said at last week’s earnings call is "a very, very small piece of what we do." Indeed, it amounts to about 10 percent of the firm’s total revenues. Total trading however, makes up 76 percent of its profits. That’s where the real risk is fermenting.
What's more, it’s impossible to tell just how much trading is uniquely proprietary and how much can be classified as client-driven. Proprietary trading isn’t even specifically broken out on most of the banks' filings, and where it is, it’s not an overriding factor.
Goldman garners a higher portion of revenues from trading than any other bank. Its 2009 revenues were $45.2 billion (it still enjoys generous various government support, including $12.9 billion from the AIG shell-game), with 76 percent or $34.4 billion coming from trading related business, compared to 41 percent or $9 billion in 2008, and 68 percent in 2007 and 2006. Only approximately 10 percent of its revenues come from what it lists as proprietary trading.
JPMorgan Chase and Morgan Stanley trade under investment banking division headings with negligible contributions from anything deemed proprietary. Yet JPMorgan Chase’s 2009 net profits shot up to $11.7 billion this year, more than twice its 2008 figures, bolstered by its trading activity. In 2009, Morgan Stanley’s trading revenue was 27 percent of total revenues, compared to a loss in 2008. By the third quarter of 2009, trading was the firm’s most profitable division. There's plenty of risk, but it isn't from strictly proprietary trading.
Bank of America has its fixed income, currency and commodities trading figures merged together, making it impossible to see the contribution of Merrill Lynch’s sizable trading activities, or the line between proprietary and client-driven trading. Its 2009 trading revenue was $15 billion, or 13 percent of total net revenue, up from a $6 billion loss the previous year and $7.2 billion, or 11 percent in 2007.
Citigroup, having led the banking industry in government support at $374 billion, saw its net revenues recover (up 65 percent in 2009 vs. 2008), as it made $21.4 billion in trading revenue, or 27 percent of net revenue compared to a loss of $22.1 billion in 2008. The firm breaks out its trading revenue figures to some extent, but alters classifications frequently. It has about a trillion dollars of transactions residing off balance sheet—risky as hell, but not considered proprietary.
So at all of the major financial conglomerates, trading activities that sparked major losses in the crash remains through the roof. And we don’t really know how much of it Volcker would crack down on.
We are kidding ourselves if we think banning proprietary trading or official hedge fund or private equity relationships will have a meaningful impact on our broken banking system. A new Glass-Steagall, by contrast, would force a true distinction between commercial banks with access to federal support and those that rely on trading and investment banking. It would detangle the risky Merrill Lynch enterprises from Bank of America, and expunge Bear Stearns and other investment bank subsidiaries from the books of JPMorgan Chase. It would remedy the Robert Rubin-Larry Summers-deregulation-spawned nightmare that is Citigroup.
Absent this clear separation, these too-big-to-fail firms will just call every trade they make "client-driven" and alter their technical financial distinctions accordingly. A proprietary trading ban is meaningless if everything risky is easily reclassified as client-driven trading. We can't limit something that isn't fully disclosed or can be easily camouflaged. If we don’t restrict all trading at bank holding companies by separating out the investment banking operations from the commercial banking business, we’ll be outdone by loopholes, and stay one step behind the banks on every move.
Volcker has the right idea, but Obama must take it much further if he wants to protect our economy from Wall Street excess.
Nomi Prins is a senior fellow at the public policy center Demos and author of It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street.
Obama's State of the Union Rhetoric, 2010: Economic Euphemisms and Internal Contradictions
Part II
By Michael Hudson |
Global Research, January 27, 2010 |
The State of the Union address is in danger of purveying the usual euphemisms. I expect Mr. Obama to brag that he has overseen a recovery. But can there be any such thing as a jobless recovery? What has recovered are stock market averages and Wall Street bonuses, not disposable personal income or discretionary spending after paying debt service.
There is a dream that what can be “recovered” is something so idyllic as to be mythical: a Bubble Economy enabling people to make money without actually working, by borrowing and riding the tide of asset-price inflation to make capital gains. Corporate Democrat Harold Ford Jr. writes nostalgically that Bill Clinton’s eight years in office created 22 million jobs, “balanced the budget and left his successor with a surplus. This can be done again,”[1] if only Mr. Obama moves further to the right (which Mr. Ford calls the center, meaning the Bayhs and Republicans).
Well, no it can’t be done again. Pres. Clinton’s administration balanced the budget by “welfare reform” to cut back public spending. This would be lethal today. Meanwhile, his explosion of bank credit and the dot.com boom (rising stock prices and bonuses without any earnings) fueled the early stages of the Greenspan bubble. It was a debt-leveraged illusion. Instead of the government running budget deficits to expand domestic demand, Mr. Clinton left it to banks to extend interest-bearing credit – debt pollution that we are still struggling to clean up.
The danger is that when Mr. Obama speaks of “stabilizing the economy,” he means trying to sustain the rise in compound interest and debt. This mathematical financial dynamic is autonomous from the “real” industrial economy, overwhelming it economically. That is what makes the present economic road to debt peonage so self-defeating.
Debts that can’t be paid, won’t be. So defaults are rising. The question that Mr. Obama should be addressing is how to deal with the excess of debt above the ability to pay – and of negative equity for the one-quarter of U.S. real estate that has a higher mortgage debt than the market price is worth. If the hope is still to “borrow our way out of debt” by getting the banks to start lending again, then listeners on Wednesday will know that Mr. Obama’s second year in office will be worse for the economy than his first.
How realistic is it to expect the speech to make clear that “we can’t go home again”? Mr. Obama promised change. “We simply cannot return to business as usual,” he said on Jan. 21, introducing the “Volcker plan.” But how can there be meaningful structural change if the plan is to return to an idealized dynamic that enriched Wall Street but not the rest of the economy?
The word “recession” implies that economic trends will return to normal almost naturally
Any dream of “recovery” in today’s debt-leveraged economy is a false hope. Yet high financial circles expect Mr. Obama to insist that the economy cannot recover without first reimbursing and enriching Wall Street. To re-inflate asset prices, Mr. Obama’s team looks to Japan’s post-1990 model. A compliant Federal Reserve is to flood the credit markets to lower interest rates to revive bank lending –interest-bearing debt borrowed to buy real estate already in place (and stocks and bonds already issued), enabling banks to work out of their negative equity position by inflating asset prices relative to wages.
The promise is that re-inflating prices will help the “real” economy. But what will “recover” is the rising trend of consumer and homeowner debt responsible for stifling the economy with debt deflation in the first place. This end-result of the Clinton-Bush bubble economy is still being applauded as a model for recovery.
We are not really emerging from a “recession.” The word means literally a falling below a trend line. The economy cannot “recover” its past exponential growth, because it was not really normal. GDP is rising mainly for the FIRE sector – finance, insurance and real estate – not the “real economy.” Financial and corporate managers are paying themselves more for their success in paying their employees less.
This is the antithesis of recovery for Main Street. That is what makes the FIRE sector so self-destructive, and what has ended America’s great post-1945 upswing.
There are two economies – and the extractive FIRE sector dominates the “real” economy
When listening to the State of the Union speech, one should ask just which economy Mr. Obama means when he talks about recovery. Most wage earners and taxpayers will think of the “real” economy of production and consumption. But Mr. Obama believes that this “Economy #1” is dependent on that of Wall Street. His major campaign contributors and “wealth creators” are in the FIRE sector – Economy #2, wrapped around the “real” Economy #1.
Economy #2 is the “balance sheet” economy of property and debt. The wealthiest 10% lend out their savings to become debts owed by the bottom 90%. A rising share of gains are made in extractive ways, by charging rent and interest, by financial speculation (“capital gains”), and by shifting taxes off itself onto the “real” Economy #1.
John Edwards talked about “the two economies,” but never explained what he meant operationally. Back in the 1960s when Michael Harrington wrote The Other America, the term meant affluent vs. poor America. For 19th-century novelists such as Charles Dickens and Benjamin Disraeli, it referred to property owners vs. renters. Today, it is finance vs. debtors. Any discussion of economic polarization between rich and poor must focus on the deepening indebtedness of most families, companies, real estate, cities and states to an emerging financial oligarchy.
Financial oligarchy is antithetical to democracy. That is what the political fight in Washington is all about today. The Corporate Democrats are trying to get elected in a democratic manner to bring about oligarchy. I hope that this is a political oxymoron, but I worry about how many people but into the idea that “wealth creation” requires debt creation. While wealth gushes upward through the Wall Street financial siphon, trickle-down economic ideology applauds this as wealth creation: fueling a Bubble Economy via debt-leveraged asset-price inflation.
The role of public spending – and hence budget deficits – no longer means taxing citizens to spend on improving their well-being within Economy #1. Since the 2008 financial meltdown the enormous rise in national debt has resulted from reimbursing Wall Street for its bad gambles on derivatives, collateralized debt obligations and credit default swaps that had little to do with the “real” economy. They could have been wiped out without bringing down the economy. That was an idle threat. A.I.G.’s swap insurance department could have collapsed (it was largely in London anyway) while keeping its normal insurance activities unscathed. But the government paid off the financial sector’s bad speculative debts by taking them onto the public balance sheet.
The economy is best viewed as the FIRE sector wrapped around the production and consumption core, extracting financial and rent charges that are not technologically or economically necessary costs.
Say’s Law of markets, taught to every economics student, states that workers and their employers use their wages and profits to buy what they produce (consumer goods and capital goods). Profits are earned by employing labor to produce goods and services to sell at a markup. (M – C – M’ to the initiated.)
The financial and property sector is wrapped around this core, siphoning off revenue from this circular flow. This FIRE sector is extractive. Its revenue takes the form of what classical economists called “economic rent,” a broad category that includes interest, monopoly super-profits (price gouging) and land rent, as well as “capital” gains. (These are mainly land-price gains and stock-market gains, not gains from industrial capital as such.) Economic rent and capital gains are income without a corresponding necessary cost of production (M – M’ to the initiated).
Banks have lent increasingly to buy up these rentier rights to extract interest, and less and less to promote industrial capital formation. Wealth creation” FIRE-style consists most easily of privatizing the public domain and erecting tollbooths to charge access fees for basic necessities such as health insurance, land sites, home ownership, the communication spectrum (cable and phone rights), patent medicine, water and electricity, and other public utilities, including the use of convenient money (credit cards), or the credit needed to get by. This kind of wealth is not what Adam Smith described in The Wealth of Nations. It is a form of overhead, not a means of production. The revenue it extracts is a zero-sum economic activity, meaning that one party’s gain (that of Wall Street usually) is another’s loss.
Debt deflation resulting from a distorted “financialized” economy
The problem that Mr. Obama faces is one that he cannot voice politically without offending his FIRE-sector political constituency. The Bubble Economy has left families, companies, real estate and government so heavily indebted that they must use current income to pay banks and bondholders. The U.S. economy is in a debt deflation. The debt service they pay is not available for spending on goods and services. This is why sales are falling, shops are closing down and employment continues to be cut back.
Banks evidently do not believe that the debt problem can be solved. That is why they have taken the $13 trillion in bailout money and run – pay it out in bonuses, or buying other banks and foreign affiliates. They see the domestic economy as being all loaned up. The game is over. Why would they make yet more loans against real estate already in negative equity, with mortgage debt in excess of the market price that can be recovered? Banks are not writing more “equity lines of credit” against homes or making second mortgages in today’s market, so consumers cannot use rising mortgage debt to fuel their spending.
Banks also are cutting back their credit card limits. They are “earning their way out of debt,” making up for the bad gambles they have taken with depositor funds, by raising interest rates, penalties and fees, by borrowing low-interest credit from the Federal Reserve and investing it abroad – preferably in currencies rising against the dollar. This is what Japan did in the “carry trade.” It kept the yen’s exchange rate down, and it is lowering the dollar’s exchange rate today. This threatens to raise prices for imports, on which domestic consumer prices are based. So, easy credit for Wall Street means a cost squeeze for consumers.
The President needs a better set of advisors. But Wall Street has obtained veto power over just who they should be. Control over the President’s ear time has been part of the financial sector’s takeover of government. Wall Street has threatened that the stock market will plunge if oligarch-friendly Fed Chairman Bernanke is not reappointed. Mr. Obama insists on keeping him on board, in the belief that what’s good for Wall Street is good for the economy at large.
But what’s good for the banks is a larger market for their credit – more debt for the families and companies that are their customers, higher fees and penalties, no truth-in-lending laws, harsher bankruptcy terms, and further deregulation and bailouts.
This is the program that Mr. Bernanke has advised Washington to follow. Wall Street hopes that he will be kept on board. Mr. Bernanke’s advice has helped bolster that of Tim Geithner at Treasury and Larry Summers as chief advisor to convince Pres. Obama that “recovery” requires more credit.
Going down this road will make the debt overhead heavier, raising the cost of living and doing business. So we must beware of the President using the term “recovery” in his State of the Union speech to mean a recovery of debt and giving more money to Wall StreetJobs cannot revive without consumers having more to spend. And consumer demand (I don’t like this jargon word, because only Wall Street and the Pentagon’s military-industrial complex really make demands) cannot be revived without reducing the debt burden. Bankers are refusing to write down mortgages and other debts to reflect the ability to pay. That act of economic realism would mean taking a loss on their bad debts. So they have asked the government to lend new buyers enough credit to re-inflate housing prices. This is the aim of the housing subsidy to new homebuyers. It leaves more revenue to be capitalized into higher mortgage loans to support prices for real estate fallen into negative equity.
The pretense is that this is subsidizing the middle class, but homebuyers are only the intermediaries for government credit (debt to be paid off by taxpayers) to mortgage bankers. Nearly 90 percent of new home mortgages are being funded or guaranteed by the FHA, Fannie Mae and Freddie Mac – all providing a concealed subsidy to Wall Street.
Mr. Obama’s most dangerous belief is the myth that the economy needs the financial sector to lead its recovery by providing credit. Every economy needs a means of payment, which is why Wall Street has been able to threaten to wreck the economy if the government does not give in to its demands. But the monetary function should not be confused with predatory lending and casino gambling, not to mention Wall Street’s use of bailout funds on lobbying efforts to spread its gospel.
Deficit reduction
It surpasses absurd for politicians to worry out loud that running a deficit from health care or Social Security might cause serious economic problems, after having given away $13 trillion to Wall Street and a blank check to the Pentagon. The “stimulus package” was only about 5 percent of this amount. But Mr. Obama has announced that he intends on Tuesday to close the barn door by proposing a bipartisan Senate Budget Commission to recommend how to limit future deficits – now that Congress is unwilling to give away any more money to Wall Street.
Republican approval would set the stage for Wednesday’s State of the Union message promising to press for “fiscal responsibility,” as if a lower deficit will help recovery. I suspect that Republicans will have little interest in joining. They see the aim as being to co-opt their criticism of Democratic spending plans. But in view of the rising and well-subsidized efforts of Harold Ford and his fellow Corporate Democrats, the actual “bipartisan” aim seems to be to provide political cover for cutting spending on labor and on social services. Mr. Obama already has sent up trial balloons about needing to address the Social Security and Medicare deficits, as if they should not be financed out of the general budget by taxpayers including the higher brackets (presently exempted from FICA paycheck withholding).
Traditionally, running deficits is supposed to help pull economies out of recession. But today, spending money on public services is deemed “bad,” because it may be “inflationary” – that is, threatening to raise wages. Talk of cutting deficits thus is class-war talk – on behalf of the FIRE sector.
The economy needs deficit spending to avoid unemployment and poverty, to increase social spending to deal with the present economic shrinkage and to maintain capital infrastructure. The federal government also needs to increase revenue sharing with states forced to slash their budgets in response to falling tax revenue and rising unemployment insurance.
But the deficits that the Bush-Obama administrations have run are nothing like the familiar old Keynesian-style deficits to help the economy recover. Running up public debt to pay Wall Street in the hope that much of this credit will be lent out to inflate asset prices is deemed good. This belief will form the context for Wednesday’s State of the Union speech. So we are brought back to the idea of economic recovery and just what is to be recovered.
Financial lobbyists are hoping to get the government to fill the gap in domestic demand below full-employment levels by providing bank credit. When governments spend money to help increase economic activity, this does not help the banks sell more interest bearing debt. Wall Street’s golden age occurred under Bill Clinton, whose deflationary budget surpluses were more than offset by an explosion of commercial bank lending.
The pro-financial mass media reiterate that deficits are inflationary and bankrupt economies. The reality is that Keynesian-style deficits raise wage levels relative to the price of property (the cost of obtaining housing, and of buying stocks and bonds to yield a retirement income). The aim of running a “Wall Street deficit” is just the reverse: It is to re-inflate property prices relative to wages.
A generation of financial “ideological engineering” has told people to welcome asset-price inflation (the Bubble Economy). People became accustomed to imagining that they were getting richer when the price of their homes rose. The problem is that real estate is worth what banks will lend – and mortgage loans are a form of debt, which needs to be repaid.
I worry that Wednesday’s address will celebrate this failed era. |
Kucinich Plan to Create One Million Permanent Job Opportunities
WASHINGTON - January 26 - Congressman Dennis Kucinich (D-OH) will soon introduce legislation to create one million permanent job opportunities for unemployed workers by temporarily reducing the minimum age for Social Security early retirement benefits.
“Many older workers can’t wait to retire, while many younger workers desperately need work. My plan enables older workers to take early retirement, thereby freeing up those jobs for younger workers who are currently unemployed. If just 25% of eligible workers choose to retire early, we can very quickly open one million job opportunities. These are not temporary jobs, but permanent jobs that already exist in our economy, even under the current recessionary circumstances,” said Kucinich.
Nearly 70 percent of workers elect to take early retirement under current rules, which allow eligible individuals to begin receiving a reduced Social Security benefit starting at age 62. The Kucinich Plan would reduce the eligibility age to 60 for the first million workers who want to take advantage of an earlier retirement date.
The cost to the federal government of the expanded early retirement option would be less than $15 billion. The plan will impose no additional costs to Social Security, since individuals electing to take Expanded Early Retirement will receive a Social Security benefit, paid for entirely by money already appropriated to deal with the financial crisis. The Kucinich Plan also addresses the health insurance of these workers by expanding the federal COBRA subsidy passed as part of the American Recovery and Reinvestment Act.
“While many workers want to retire because their jobs are physically demanding, they continue to work for financial or health reasons. For these workers, an early retirement can be a welcome relief. Decades ago the United Auto Workers negotiated with the auto companies to secure early retirement and it was considered to be an advancement of social progress. My plan is a cost-effective way to create job opportunities for younger workers while making it possible for older workers to retire at 60 with the equivalent of their social security early retirement benefit,” said Kucinich.
Published on Tuesday, January 26, 2010 by The Guardian/UK
World's Glaciers Continue to Melt at Historic Rates
Latest figures show the world's glaciers are continuing to melt so fast that many will disappear by the middle of this century
by Juliette Jowit
Glaciers across the globe are continuing to melt so fast that many will disappear by the middle of this century, the World Glacier Monitoring Service (WGMS) said today.
The announcement of the latest annual results from monitoring in nine mountain ranges on four continents comes as doubts have been cast on how much climate scientists have exaggerated the problem of glacier melt , which is seen as a leading indicator of how much the planet is heating up.
Last week the head of the Intergovernmental Panel on Climate Change (IPCC) apologised for "a paragraph" in its four-volume 2007 report which warned there was a "very high" risk that the Himalayan glaciers, on which at least half a billion of the world's poorest people depend for water, would disappear by 2035.
However the director of the WGMS, Professor Wilfried Haeberli , said the latest global results indicated most glaciers were continuing to melt at historically high rates.
"The melting goes on," said Haeberli. "It's less extreme than in years [immediately before] but what's really important is the trend of 10 years or so, and that shows an unbroken acceleration in melting."
Haeberli also repeated his warning that many glaciers are set to disappear in the next few decades, due to an expected continuation in the rise of global average temperatures. The most vulnerable glaciers were those in lower mountain ranges like the Alps and the Pyrenees in Europe, in Africa, parts of the Andes in South and Central America, and the Rockies in North America, said Haeberli.
"We are on the path of the highest scenario [of global warming] in reality, but if you take a medium scenario in the Alps about 70% will be gone by the middle of the century, and mountain ranges like the Pyrenees may be completely ice-free."
Glaciers at much higher altitudes - particularly in the Himalayas and Alaska, where it was colder and global warming could increase snowfall - could grow in the short term and were likely to last "centuries", said Haeberli. "But even for the large glaciers, for a realistic [mid-range warming] scenario, it's centuries, not millennia, and not many centuries," he added.
The WGMS records data for nearly 100 of the world's approximately 160,000 glaciers, including 30 "reference" glaciers, with data going back to at least 1980. Scientists also use methods from geology to photos and travel journals and other data to estimate glacier sizes further back in history.
The latest preliminary figures for 2007-08 show the average reduction in thickness across all the 96 glaciers was nearly half a metre, and since 1980 they have collectively lost an average of 13m thickness. During that year 30 of the 96 glaciers gained in mass.
Two years ago the WGMS preliminary figures revealed the biggest melt-rate in one year on record . The figure was later revised so it was slightly less "catastrophic" than the other extreme year in 2002-03, said Haeberli.
The IPCC uses WGMS data throughout its report, but the offending statement regarding 2035 was blamed on a quote from a scientist given to a journalist, and never presented in a peer-reviewed journal.
The Overuse of Antibiotics in Lifestock Feed Is Killing Us
By Martha Rosenberg, AlterNet
Posted on January 26, 2010, Printed on January 26, 2010
http://www.alternet.org/story/145272/
The 2000s were go-go years for antibiotic resistance. Thanks to the overprescription of antibiotics in medical settings and the non-therapeutic use of antibiotics in concentrated animal feeding operations (or CAFOs), we've aided the emergence of 'superbugs' -- or drug resistance microorganisms. Antibiotic resistance (AR) has led to the deaths of 70,000 Americans a year.
You'd think this would elicit some immediate action to prevent this public health nightmare from growing. But in 2007 when the (now) late Sen. Edward Kennedy introduced legislation to discourage the overuse of the antibiotics responsible for AR, it gained no traction. The reason? Kennedy stepped directly on the toes of two of the country's most powerful lobbying interests -- Big Ag and Big Pharma.
Agribusiness, it seems, cannot keep up its unsustainable feedlot system of raising thousands of animals in confinement, with poor sanitation and unhealthy diets, if it the animals weren't being pumped full of copious amounts of antibiotics.
"It seems scarcely believable that these precious medications could be fed by the ton to chickens and pigs," said the bill's background text. "These precious drugs aren't even used to treat sick animals. They are used to fatten pigs and speed the growth of chickens. The result of this rampant overuse is clear: meat contaminated with drug-resistant bacteria sits on supermarket shelves all over America."
Worse, when the FDA issued a directive in 2008 to ban non-therapeutic use of cephalosporin antibiotics in livestock (drugs also used in humans) to curtail resistance, irate lobbyists stormed Capitol Hill and the Bush administration backed down.
Now, with a new administration and Congress, Kennedy's bill has a House version, support from 300 organizations including the American Medical Association, American Public Health Association, American Academy of Pediatrics and American College of Preventive Medicine—and a good chance of passage.
The Preservation of Antibiotics for Medical Treatment Act (PAMTA) sponsored in the House by Rep. Louise M. Slaughter, D-NY (who has degrees in both microbiology and public health) would phase out non-therapeutic use of "medically important antibiotics" in livestock and strengthen standards for approval of new livestock antibiotics while still allowing their use in sick animals. Eighty-four percent of grower-finisher swine farms, 83 percent of cattle feedlots and 84 percent of sheep farms currently use antibiotics non-therapeutically, according to the bill. Seventy percent of antibiotics are fed to livestock, not humans, in the U.S.
Nor is use in livestock the only resistance culprit. Antibiotics are also abused by hospitals, clinics and doctors to prevent infection and to "treat" viruses when patients, especially parents of young children, want the psychological reassurance of a pill. Even antibiotic hand sanitizers and laundry detergents contribute to resistance, as do natural antibiotic treatments like tea tree oil. In fact AR might be the ultimate biological demonstration of the principle, "That which doesn't kill you makes you stronger."
Europe banned human-use antibiotics in livestock in 1998 and all non-therapeutic use of antibiotics in livestock in 2006, making it a test kitchen for AR reduction, particularly in Denmark, the world's largest pork exporter. In Denmark, antibiotic use is down 51 percent and bacteria and AR bacteria are also down, says the Pew Campaign on Human Health and Industrial Farming, with no increase in the cost of meat. Sweden, Norway and the Netherlands have also reported AR reductions as has Australia.
Reductions of antibiotic use are also underway in European hospitals. In Norway, testing and isolating patients with MRSA (methicillin resistant S. aureus, considered the granddaddy of resistant microbes) and prescribing fewer antibiotics has brought down the AR rate, according to an in-depth AP report in January.
On the surface, a bill addressing AR that could return us to pre-antibiotic medicine circa 1908 looks like a no-brainer. That's why the Animal Health Institute (AHI) and newly merged Pfizer/Wyeth (Fort Dodge) and Merck/Schering-Plough (Intervet) animal drug giants are lobbying hard against it. In fact, Rep. Slaughter's PAMTA may be the only bill that pits veterinarians against doctors.
Of course, Big Ag is fighting back. Agribusiness insists that antibiotics aren't causing AR and even if they are, we're not using human drugs, and even if we are using human drugs, we're cutting down on them. and even if we're not cutting down on them, the drugs are FDA-approved and undergo vigorous risk assessment. This parody of defenses includes everything but denying the use of antibiotics in the first place.
Actually, Big Ag's use of antibiotics increased 13 percent from 2006 to 2007 according to the AHI, to offset "high grain prices" and "capture both the economic efficiencies and the health benefits derived from the use of these products," the agribusiness weeklyFeedstuffs reported in November 2008. Those "efficiencies" included feeding 10 million pounds of tetracycline—a broad-spectrum human antibiotic used for pneumonia, eye, ear and urinary tract infections, and gonorrhea—to livestock in one year.
In addition to worrying about Rep. Slaughter, agribusiness worries about the public health bent FDA is taking under its new directors, Commissioner Margaret A. Hamburg, MD, a former New York City health commissioner and Deputy Commissioner Joshua Sharfstein, MD, the number two officer and a former food safety staffer for Rep. Henry Waxman, D-CA. Especially since Sharfstein announced FDA's support of PAMTA at a House Rules Committee on the legislation in June, without even briefing agribusiness.
"You deliberately tried to blindside some of us on this committee, and we don't appreciate that," said Rep. Leonard Boswell, D-IOWA, to the FDA's new senior adviser on food safety, Michael Taylor after determining that Sharfstein's remarks had White House Office of Management and Budget seal of approval. Boswell, who was chairman of the House agriculture subcommittee on livestock last year, was the only pro-antibiotic voice at the PAMTA rules hearings.
Antibiotics are popular with CAFOs and lucrative for agribusiness for two simple reasons: less space and less feed.
Raising turkeys without antibiotics "would result in a decrease in density or an increase in the amount of land needed to raise the additional turkeys needed to meet the consumer demand," said National Turkey Federation's Michael Rybolt at the 2008 cephalosporin hearings, admitting antibiotics enable crowding. It would create greater feed needs, "an increase in manure" and tie up more land for crop production, said Rybolt.
While antibiotics do squeeze more nutrients out of feed by killing gut bacteria and causing "growth" say scientists, a Johns Hopkins University study in Public Health Reports in 2007 found their cost canceled out profits for chicken farmers.
Evidence of AR infections—urinary tract, intestinal, upper and lower respiratory, ear, skin, and even TB and STDs—is not hard to find in hospitals and communities. In fact, MRSA was reported plentiful on Florida swimming beaches at the American Association for the Advancement of Science annual meeting in 2009.
Antibiotic-resistant microbes are also found in ground water, soil, and in crops and workers near manure lagoons and industrial farms and are in many of the foods we eat.Consumer Reports found over 60 percent of microbes detected in chickens from 22 states were resistant and an FDA inspection found cephalosporin—the antibiotic it tried to ban in 2008—directly injected into eggs at a U.S. hatchery. Bon appetit!
But don't look for many new antibiotics in the pharmaceutical pipeline. There's less money in developing drugs taken for 10 days (unless you're an animal) than in heart, arthritis, diabetes and psychoactive meds taken for life. And recent antibiotic development disasters like Ketek (black-boxed for hepatotoxicity), Trovan (severely restricted for hepatotoxicity) and Zyvox (part of the biggest fraud settlement in U.S. history), don't raise hopes.
Of course there are other ways to attack bacteria. Scientists are looking at algeliferin, isolated from sponge, which can break down bacteria's biofilm barrier, and radiation, ultrasound, chlorine dioxide and ammonia are already in use. (The New York Timesreported last month that ammonia gas treatment was shown to produce E. coli-laced "pink slime" in meats used for the school lunch program.)
But scientists are also looking at seraticin, an antibiotic from green bottle fly maggots and bacteriophages, intracellular parasites that multiply inside bacteria like viruses—century-old therapies used before antibiotics were even invented.
Few miss the irony that in using antibiotics when they aren't necessary, we lose the ability to use them when they are.
Martha Rosenberg is a columnist and cartoonist who frequently writes about the impact of the pharmaceutical, food and gun industries on public health. A former medical copywriter, her work has appeared in the Boston Globe, San Francisco Chronicle, Los Angeles Times and Chicago Tribune, as well as on the BBC and in the original National Lampoon.
Why Progressives Shouldn't Fall For the Deficit Reduction Trap
By James Galbraith, AlterNet
Posted on January 26, 2010, Printed on January 26, 2010
http://www.alternet.org/story/145401/
Shockingly, President Obama has announced his support for a commission whose purpose is to ramrod Social Security and Medicare cuts through Congress. Thinly disguised as a program for "deficit reduction," the proposed commission will meet its first test today, when the Senate may vote to authorize it as part of a bill to raise the national debt ceiling. A large progressive coalition is already on record against it. But the progressives' case is flawed; it's not tough enough. Here's why.
According to a press release issued by the Campaign for America's Future on January 20,describing the progressive coalition:
Speakers stressed the need for a long-term deficit reduction strategy.... Joan Entmacher of National Women's Law Center noted that responsible ways to cut the deficit were available now if austerity activists weren't only interested in attacking Social Security and Medicare.... Hillary Shelton of the NAACP said the responsibility for debt reduction should remain with democratically elected representatives from each congressional district...
Now, when our civil rights leaders speak of deficits, no one supposes they do so from deep conviction. It's a political move. They are intoning phrases calculated to lend a tone of respectability to a larger and more important cause. That cause -- in this case protecting Social Security and Medicare from predators on Wall Street -- is a good one. But good political purposes don't guarantee good economics. And, let me argue, if the economics are based, as they are here, on a false premise, then you can't make the politics work in your favor.
The CAF coalition concedes that "long-term deficit reduction" is vital. But why? No reason is given. Are they worried about a threat of inflation? If so, why not look at interest rates? Last December's average 20-year Treasury bond rate was 4.40 percent -- lower than it was before the crash sent deficits soaring. Clearly, the markets aren't worried -- or the government would have to pay more to borrow. Equally obviously, the markets aren't worried about "default" or "national bankruptcy" either. Investors know those concepts don't apply to the government of the United States.
And once you concede that deficits are actually bad, you're boxed in. If you exclude Social Security and Medicare, there is no way to cut deficits seriously (short- or long-term, on unchanged economic assumptions) except by slashing the Pentagon or by raising taxes. If you had to do something, I agree, those would be better moves. But good luck. It's not a political battle one can win.
CAF leaders try to escape the box by arguing that deficit reduction should be "long-term" -- but that we need more "up-front" spending, stimulus and investment for now. But Social Security's enemies are playing for the long term. So long as they can put Social Security and Medicare on the path to destruction over time, they'll be happy -- and quite willing to make some "short-term" concessions to reach that goal.
So the fetish of long-term deficit reduction is politically poisonous -- and economically pointless. In reality, we need big budget deficits. We need them now. We need bigger deficits than we've got, to stabilize state and local governments and to provide jobs and payroll tax relief. And we may need them for a long time, on an increasing scale, and in the service of a sustained investment strategy aimed at solving our jobs, energy, environment and climate change problems. To pretend that expansionary policies are needed only for now, gives all this away.
The public deficit is just the obverse of net private savings. That is, when private credit is booming, investment exceeds saving and deficits tend to disappear. That's what happened in the 1990s. When credit collapses, deficits return. That's what's happening now. Large long-term deficits will occur, or not, depending only on whether we succeed in generating a new growth cycle, financed by the expansion of private credit. Policies to cut spending or raise taxes -- now or for that matter in the future -- contribute nothing to this goal.
Financial reform and debt relief are therefore the only paths to public deficit reduction.; It would be nice to have them, for the economy works better and people are happier when they can borrow and invest privately. But if we don't get them, the alternative isn't a "return to fiscal responsibility." It's a choice between large public budget deficits that fund important and useful activities and tax relief, or large deficits because the recession, housing slump and high unemployment drag on and on, all made worse by cuts in Social Security, Medicare and other public spending.
Yes, we must defend Social Security and Medicare from Wall Street and its political agents -- which now, sadly, include the Obama White House. But we'll lose on that -- and everything else -- if we start by giving up the fight for an aggressive, effective, sustained and long-range economic recovery program, deficits and all.
James K. Galbraith is the author of The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too, and of a new preface toThe Great Crash, 1929, by John Kenneth Galbraith. He teaches at The University of Texas at Austin.
January 23, 2010
The first casualty of the president's political debacle will likely be Timothy Geithner, the severely over-confident treasury secretary well known as a lapdog of Wall Street. Geithner was effectively repudiated by the president last week when Barack Obama abruptly announced a new, more aggressive approach to financial reform. But the immediate threat to Geithner is the scandal of collusion and possibly illegal behavior gathering around the Federal Reserve Bank of New York for its megabillion-dollar takeover of insurance giant AIG.
Tim Geithner is standing in the middle of the muck because he was still president of the New York Fed in the fall of 2008 when it rescued AIG with tons of public money (now totaling $180 billion). The facts of the deal are catching up with him now and none are good, since they raise doubts about his competence and his public integrity. This scandal has smoldered for several weeks in newspaper business sections, but is about to grab front-page attention.
The House Oversight Committee, chaired by Edolphus Towns, has turned up damning evidence and called Geithner to testify the week of January 27. Committee investigators are poring through some 250,000 e-mails and subpoenaed documents and finding smoking revelations. House Republicans smell blood. House Democrats, given the present climate of popular discontent, are unlikely to rally around tainted goods.
Perhaps the most explosive revelation is that Geithner's subordinates at the New York Fed instructed AIG executives to evade securities law and conceal from the public the $62 billion the insurance company paid out on contracts with the largest investment houses and banks. AIG was already bankrupt and 80 percent owned by the government, kept afloat solely with the billions being injected by the central bank. Yet the Fed told the company to pay off the bankers at full value--100 percent on the dollar--without negotiating a better deal for the public. The bankers would not have collected a dime if the government hadn't come to the rescue.
The Fed, in other words, gave the largest, most prestigious banks a very sweet deal--much sweeter than anything the banks or the federal government will offer to homeowners facing mortgage foreclosure. The central bank, in effect, was operating a backdoor bank bailout that nobody could see. The public billions devoted to AIG went in one door at the insurance company and came out another door to the private banks. Goldman Sachs alone collected $13 billion.
Failure to disclose is a big no-no in corporate finance. People can go to jail if they willfully withhold material information from shareholders and the Securities and Exchange Commission (SEC), or they may be sued for investor fraud. Yet that is what the New York Fed told AIG to do. The company officers wanted to report fully to the SEC. Their Fed overseers told them to take out the disclosure out of their report to the SEC (the facts were ultimately not disclosed until five months later). The Fed, remember, is the government's principal banking regulator. It is supposed to enforce the laws, not tell regulated firms to break them.
What was the Fed anxious to hide? Clearly, it was the clandestine and illegitimate conduit it had devised at AIG to funnel billions to the banks, unseen by the public. Keeping this bailout secret would avoid arousing even greater anger about the bailouts. It might also help prop up stock prices at endangered banks, though savvy financial players swiftly figured out what was going on. Only the people needed to be kept in the dark, along with their elected representatives in Congress.
The Federal Reserve was trying to cover its own butt. And Timothy Geithner's. Disclosing precisely what Geithner had done to arrange backdoor bailouts on the New York end would have definitely damaged his chance of becoming Obama's treasury secretary. When the facts were eventually acknowledged, members of Congress repeatedly demanded to know which firms got the Fed's money. The Federal Reserve Chairman and his top deputies said it would be "inappropriate" to say.
Somebody seems to be lying in this matter. When the Fed's irregular action to block AIG's full disclosure was first reported, Treasury officials said Geithner was not involved because he had "recused" himself from the AIG dealings. Yet, according to the latest revelations reported by the New York Times, the general counsel of the New York Fed, Thomas Baxter, has told House investigators that Geithner verbally approved AIG's generous payouts to the banks.
So which is it? Was Geithner involved or wasn't he? It seems highly improbable Geithner could have managed to remain ignorant of this very controversial decision not to disclose. In fact, it would have been derelict for him not to have known. Committee members will want to probe the question further--what did Tim Geithner know and when did he know it? Let's hope he is under oath. Martha Stewart, remember, went to prison not for trading stocks on insider information but because she lied to federal investigators.
The treasury secretary's precarious situation may well spill over to damage the fate of Federal Reserve chairman Ben Bernanke, seeking Senate confirmation for a second term. Until now, the Board of Governors in Washington has claimed to be aloof from the AIG mess at the New York Fed. This may also be untrue, according to the latest revelations. Some of the Fed governors in Washington, it turns out, were quite upset by the deals being made by Geithner's staff at the New York Fed. Lying is easier when a government agency is given privileged secrecy.
"What does any of this buy us?" some governors asked, according to one newly disclosed e-mail message. Good question. For that matter, what did the public get for its $180 billion? Senators might want an answer before they vote to give Bernanke another four years. Bernanke's distress was revealed last week when he suddenly announced that he wants a GAO audit of the entire AIG deal-making. That was jarring because Bernanke has repeatedly claimed the Congressional demands for a GAO audit of the Federal Reserve would destroy this sanctified institution.
The smell of scandal poses a more fundamental question about the future of the Federal Reserve. The president's financial reform proposals would authorize the Federal Reserve to become the super-regulator of the entire financial system--empowered in privileged secrecy to decide the most fateful matters of who should fail, who should be saved. The largest banking institutions are comfortable with this "reform," since they proposed the idea. Anyone else who looks closely at the Fed and the AIG fiasco should see immediately the alarming implications.
About William Greider
National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The Soul of Capitalism (Simon & Schuster) and, most recently, Come Home, America.
Robert Reich
Former Secretary of Labor, Professor at Berkeley
Posted: January 25, 2010 11:02 AM
What the 'I'm Mad as Hell' Party Could Do
A third political party is emerging in America. Call it the I'm-Mad-As-Hell party.
It's a mistake to see the Mad-As-Hell party as just a right-wing phenomenon -- the so-called Tea Partiers now storming the gates of the Republican Party. There are plenty of mad-as-hellers on the left as well -- furious at Wall Street, health insurers, pharmaceutical manufacturers, and establishment Democrats.
Mad-as-hellers don't trust big government. But they don't trust big business and Wall Street either. They especially hate it when big government gets together with big business and Wall Street -- while at the same time Main Street is in shambles and millions of people are losing their jobs and homes.
First it was TARP, the giant bank bailout that seems to have made Wall Street flush again -- so flush the Street is now distributing giant bonuses as if the crash it brought on never happened.
Then came the stimulus package, replete with earmarked goodies for every corporation big enough to hire a team of Washington lobbyists.
And then it was health care, which to some people looked like a sweetheart deal between government and Big Pharma and big health insurers.
To the Mad-As-Hell party, the biggest event last week wasn't Scott Brown's upset victory in Massachusetts. It was the Supreme Court's decision in Citizen's United vs. the Federal Election Commission, allowing corporations to spend however much they want on political campaigns. True mad-as-hellers see this as inviting even more collusion between big business, Wall Street, and big government - and against the rest of us.
With the mid-term elections months away, both Republicans and Democrats are scrambling to embrace the Mad-As-Hell Party as their own. Republicans are hoping the mad-as-hellers forget the gushing corporate welfare of the Bush administration and the last Republican congress. And Democrats have become born-again economic populists, blaming the nation's problems on the same "fat cat" bankers and corporate lobbyists they've been cozying up to for years.
If the Mad-as-hell Party helps get money out of politics it will do a world of good. I might even join up. But if it just fulminates against the establishment, forget it. Wrecking balls are easy to wield. Rescuing our democracy is hard work.
Published on Saturday, January 23, 2010 by CommonDreams.org
Progressives: Don't Mourn, Organize
by CommonDreams.org
by Michael Winship
Tragic events continuing out of Haiti make all the bad news for progressives this week wither in comparison. Nonetheless, over these last few days, for liberals in particular, there has been no joy in Mudville -- aka American politics.
Just for starters: Thursday's Supreme Court decision opening the floodgates for corporate dollars dominating campaign advertising; the election of Republican Scott Brown to the Senate, ending the Democrats so-called supermajority of 60 votes; and the subsequent collapse of health care reform as Democratic members of Congress scurried for the fire exits.
For a moment at least President Obama must have felt like he was in one of those animated cartoons where the hero tries to rally his troops shouting, "What are we, men or mice?" and the response is a chorus of rodent-like squeaks.
Add to this John Edwards confessing -- finally -- to paternity, and the withdrawal of Erroll Southers' name as Obama's choice to run the Transportation Security Administration after weeks of harassment by conservative Senator Jim DeMint (and the revelation that Southers had dissembled about incidents 20 years ago when he accessed a Federal database to investigate his estranged wife's new boyfriend). Yikes.
Then, just to ice this cookie full of arsenic, comes news of the demise of the progressive radio network Air America. It was a misbegotten enterprise from the onset, intentions noble but its finances always in a state of jangling uncertainty (in the interest of full disclosure, I made regular appearances for a short while on their morning show, "Unfiltered," hosted by Lizz Winstead, Chuck D and Rachel Maddow -- Rachel being the best and smartest on-air personage to have emerged from the entire Air America enterprise).
Why progressive talk radio has been unable to counter the right-wing, talk radio juggernaut seems no great mystery. The nuance and diffuse nature of much liberal debate is unlike the bombast and accusation that sells beverages and shock absorbers. "Yes, but on the other hand" works great for NPR, God bless them, but not in the loud and confrontational world of commercial talk radio, where gladiatorial skills are more valued than dialectical ones.
More important, Air America was never able to attract the big corporate dollars, its audience too small and, one presumes, because its politics did not gibe with the free market agenda of many large sponsors and their associates, the ones with the deepest pockets.
Just look, for example, at the wallet of the conservative United States Chamber of Commerce, which describes itself as "the world's largest business federation representing 3 million businesses of all sizes, sectors, and regions."
The Chamber bragged about the cash they poured into TV ads supporting Scott Brown in the Massachusetts Senate race -- more than half a million dollars' worth by last count -- and said his victory "could pay immediate dividends by throwing into question the future of health care reform legislation pending in Congress." Check and double check.
It's the opening salvo in their campaign to block just about any kind of reform by backing pro-business candidates in this fall's midterm elections -- in all, the Chamber plans to spend a whopping $100 million dollars. Not that they have to buy any more members of Congress -- as we've seen this past year, and especially this week, the Democrats and Republicans they've already helped pay for are perfectly capable of bringing the House and Senate to a compete standstill -- witness health care, the cap-and-trade climate bill and the disinclination to truly step up to the plate on financial reform.
All thanks in part to the lobbying efforts and campaign cash of big business, which, with this week's Supreme Court decision, will be all the more able to deluge the airwaves and Internet with an unending barrage of ads in favor or against the candidates and issues of their choice.
But this is no time to run and hide. As the historian Simon Schama wrote in the January 19 edition of the Financial Times, the President "may actually need to respond to the unrelenting pressure from zombie conservatism, ravenously flesh-eating and never quite dead, not by turning on more consensual charm, but by taking the gloves off. With his bank levy -- 'We want our money back,' he said -- Mr. Obama has belatedly begun to fight. Whether he can trade enough punches with the right before the November mid-term elections remains to be seen, but my hunch is that President Composure is up for a brawl."
To do so, he will have to speak out forcefully and counter the bulldozing effect of megabucks with solid community support. A report last week by David Corn on the Mother Jones Web site was not encouraging, suggesting that the volunteer army of more than 13 million activists and donors that sparkplugged Obama's presidential campaign has been too often ignored or misused by the White House.
An investigation commissioned by the crosspartisan group blog TechPresident.com found that as far as advancing a progressive agenda goes, the effort that arose from the Obama campaign, Organizing for America (OFA), "focused more on supporting and thanking allied Members than pressuring resistant Democrats or Republicans." In other words, too many e-mail offers of OFA tee-shirts and wool hats and not enough boots on the ground canvassing and lobbying.
This is no time to go wobbly, as Margaret Thatcher famously told George Bush the First. But given the events of this week, perhaps even more appropriate are the pre-firing squad words of that most famous Wobbly, radical and labor activist Joe Hill: Don't mourn, organize.
Michael Winship is senior writer of the weekly public affairs program "Bill Moyers Journal," which airs Friday night on PBS. Check local airtimes or comment at The Moyers Blog atwww.pbs.org/moyers .
Published on Saturday, January 23, 2010 by CommonDreams.org
Time to Rein in Out-of-Control Corporate Influences on Our Democracy
by CommonDreams.org
by Ralph Nader
Thursday's 5-4 decision by the U.S. Supreme Court in Citizens United v. Federal Election Commission shreds the fabric of our already weakened democracy by allowing corporations to more completely dominate our corrupted electoral process. It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations.
With this decision, corporations can now directly pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars. Without approval from their shareholders, corporations can reward or intimidate people running for office at the local, state, and national levels.
Much of this 183 page opinion requires readers to enter into a fantasy world and accept the twisted logic of Justice Kennedy, who delivered the opinion of the Court, joined by Chief Justice Roberts, and Justices Scalia, Alito, and Thomas. Imagine the majority saying the "Government may not suppress political speech based on the speaker's corporate identity."
Perhaps Justice Kennedy didn't hear that the financial sector invested more than $5 billion in political influence purchasing in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse, according to a 231-page report titled: "Sold Out: How Wall Street and Washington Betrayed America" (See: WallStreetWatch.org).
The Center for Responsive Politics reported that last year the U.S. Chamber of Commerce spent $144 million to influence Congress and state legislatures.
The Center also reported big lobbying expenditures by the Pharmaceutical Research and Manufacturers of America (PhRMA) which spent $26 million in 2009. Drug companies like Pfizer, Amgen and Eli Lilly also poured tens of millions of dollars into federal lobbying in 2009. The health insurance industry trade group America's Health Insurance Plans (AHIP) also spent several million lobbying Congress. No wonder Single Payer Health insurance - supported by the majority of people, doctors, and nurses - isn't moving in Congress.
Energy companies like ExxonMobil and Chevron are also big spenders. No wonder we have a national energy policy that is pro-fossil fuel and that does little to advance renewable energy (See: OpenSecrets.Org).
No wonder we have the best Congress money can buy.
I suppose Justice Kennedy thinks corporations that overwhelm members of Congress with campaign contributions need to have still more influence in the electoral arena. Spending millions to lobby Congress and making substantial PAC contributions just isn't enough for a majority of the Supreme Court. The dictate by the five activist Justices was too much for even Republican Senator John McCain, who commented that he was troubled by their "extreme naivete."
There is a glimmer of hope and a touch of reality in yesterday's Supreme Court decision. Unfortunately it is the powerful 90 page dissent in this case by Justice Stevens joined by Justices Ginsburg, Breyer, and Sotomayor. Justice Stevens recognizes the power corporations wield in our political economy. Justice Stevens finds it "absurd to think that the First Amendment prohibits legislatures from taking into account the corporate identity of a sponsor of electoral advocacy." He flatly declares that, "The Court's ruling threatens to undermine the integrity of elected institutions across the Nation."
He notes that the, Framers of our Constitution "had little trouble distinguishing corporations from human beings, and when they constitutionalized the right to free speech in the First Amendment, it was the free speech of individual Americans that they had in mind." Right he is, for the words "corporation" or "company" do not exist in our Constitution.
Justice Stevens concludes his dissent as follows:
"At bottom, the Court's opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics."
Indeed, this corporatist, anti-voter majority decision is so extreme that it should galvanize a grassroots effort to enact a simple Constitutional amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics. It is time to prevent corporate campaign contributions from commercializing our elections and drowning out the voices and values of citizens and voters. It is way overdue to overthrow "King Corporation" and restore the sovereignty of "We the People"! Remember that corporations, chartered by the state, are our servants, not our masters.
Legislation sponsored by Senator Richard Durbin (D-IL) and Representative John Larson (D-CT) would encourage unlimited small-dollar donations from individuals and provide candidates with public funding in exchange for refusing corporate contributions or private contributions of more than $100.
It is also time for shareholder resolutions, company by company, directing the corporate boards of directors to pledge not to use company money to directly favor or oppose candidates for public office.
If you want to join the efforts to rollback the corporate concessions the Supreme Court made yesterday, visit Citizen.Org and freespeechforpeople.org .
Ralph Nader is a consumer advocate, lawyer, and author. His most recent book - and first novel - is, Only The Super Wealthy Can Save Us . His most recent work of non-fiction is The Seventeen Traditions .
Grayson: Fight Now or 'Kiss Your Country Goodbye' to Exxon, Wal-Mart
By Sahil Kapur, Raw Story
Posted on January 22, 2010, Printed on January 24, 2010
http://www.alternet.org/story/145339/
WASHINGTON -- Responding to the Supreme Court's ruling Thursday to overturn corporate spending limits in federal elections, progressive firebrand Rep. Alan Grayson (D-FL) immediately highlighted a series of moves to "avoid the terrible consequences of the decision."
"If we do nothing then I think you can kiss your country goodbye," Grayson told Raw Story in an interview just hours after the decision was announced.
"You won't have any more senators from Kansas or Oregon, you'll have senators from Cheekies and Exxon. Maybe we'll have to wear corporate logos like Nascar drivers."
Grayson said the Citizens United v. Federal Election Commission ruling -- which removes decades of campaign spending limits on corporations -- "opens the floodgates for the purchases and sale of the law."
"It allows corporations to spend all the money they want to buy and sell elected officials through the campaign process," he said. "It allows them to reward political sellouts, and it allows them to punish elected officials who actually try to do what's right for the people."
Fearing this decision before it became official, Grayson last week filed five campaign finance bills and a sixth one on Thursday. Grayson said the bills are important to securing the people's "right to clean government."
The bills have names like the Business Should Mind Its Own Business Act and the Corporate Propaganda Sunshine Act. The first slaps a 500 percent excise tax on corporate spending on elections, and the second mandates businesses to disclose their attempts to influence elections. More details are available on the congressman's Web site.
"These bills will save us from drowning in corporate money and special interest money," Grayson said. "They should have been passed a long time ago but after the Supreme Court opened those floodgates, I think it's imperative we get these things done."
Reforming campaign finance laws has been a daunting task, as senators Russ Feingold (D-WI) and John McCain (R-AZ) have made concerted attempts and failed.
"I'm very optimistic," Grayson said. "I discussed the bills with the leadership when I filed them, which was a week ago in the case of the first five."
"The bills are short and readable, which frankly is pretty unusual these days," he said. "The longest one is four pages long and there are six of them."
Grayson has created the Web site SaveDemocracy.net to gather petitions in support of his bills. On Friday at 8:30 AM EST there were nearly 40,000 signatories.
'Worst Supreme Court decision since the Dred Scott case'
 The first-term congressman from Florida had an ominous view of the consequences of embracing the decision.
"Anytime Exxon feels like it, Exxon can go and claim one of the 435 Congressional districts in this country, and drop $100 million in cash to pay for ads to knock off anybody they don't like. To them, that's an insignificant amount of money."
Grayson even likened the ruling to the 1857 pro-slavery Dred Scott case, arguing the two are "bad for pretty much the same reasons."
"We now today have a Supreme Court decision that essentially says only corporations have Constitutional rights," he said. "The rights of the rest of us to clean government is somehow overlooked by the Founders, according to this Supreme Court."
The decision supports "this bizarre conception that the Constitution is for the benefit of the powerful, and nobody else," he added.
Grayson's critique echoes the viewpoints of many others who believed campaign finance laws were already too permissive to special interests before Thursday's ruling.
"I think few people would say that what we really need in America is more corporate interference in the political process," he said.
Reforming campaign finance laws will be a tricky process for Congress because both Republicans and Democrats receive weighty campaign contributions from wealthy corporations.
While few Democrats have acted in recent years to change campaign finance laws, Grayson predicted his party will now be more interested in the issue.
"This just happened, that's why you're not hearing enough," he said. "You're going to hear a lot. I'm pretty confident that these bills will draw a tremendous amount of Democratic support."
Inviting his opponents to support his effort, Grayson said: "I'm hopeful that in the end there are principled Republicans who will actually join the effort, because nobody really wants to become the congressman from Wal-Mart."
GOP 'smiling' at the decision
 Never one to pull a punch from Republicans, Grayson questioned the intentions of the ruling's backers.
"In the same way that Republicans always do their best to suppress voter turnout in elections, the Republicans are doing their best here to increase the amount of corporate cash," Grayson said. "They are, in essence, a wholly-owned subsidiary of corporate America."
GOP elders -- including party chair Michael Steele, Rep. John Boehner (R-OH) and Sen. Mitch McConnell (R-KY) -- praised the verdict, hailing it as a defense of free speech.
"For too long, some in this country have been deprived of full participation in the political process," McConnell said. "With today’s monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups."
"Freedom won today in the Supreme Court," said Rep. Mike Pence (R-IN).
But Republicans were not unanimous in their support -- McCain and Sen. Olympia Snowe (R-ME) criticized the outcome.
"McConnell is the head of the Senate Republicans, and he knows that a decision like this means a huge amounts of cash from special interests, which Republicans are more than happy to support," Grayson said.
"Everyone in the political process will have to knuckle under their corporate masters or face the consequences, and maybe Mitch McConnell is happy about that but I have to think that ordinary Americans are going to be pretty unhappy."
The decision was criticized by President Obama and Democratic senators Chuck Schumer (D-NY) and Feingold.
"I think most elected conservatives are already bought and paid for by special interests so this just makes it official."
His view of independent conservative voters who back the ruling?
"What conservatism seems to mean to them, when you get down to it, is simply offering comfort to the comfortable and afflicting the afflicted," Grayson said.
The Supreme Court Just Handed Anyone, Including bin Laden or the Chinese Govt., Control of Our Democracy
By Greg Palast, AlterNet
Posted on January 22, 2010, Printed on January 24, 2010
http://www.alternet.org/story/145354/
In Citizens United v. Federal Election Commission, the Supreme Court ruled that corporations should be treated the same as "natural persons", i.e. humans. Well, in that case, expect the Supreme Court to next rule that Wal-Mart can run for President.
The ruling, which junks federal laws that now bar corporations from stuffing campaign coffers, will not, as progressives fear, cause an avalanche of corporate cash into politics. Sadly, that's already happened: we have been snowed under by tens of millions of dollars given through corporate PACs and "bundling" of individual contributions from corporate pay-rollers.
The Court's decision is far, far more dangerous to U.S. democracy. Think: Manchurian candidates.
I'm losing sleep over the millions — or billions — of dollars that could flood into our elections from ARAMCO, the Saudi Oil corporation's U.S. unit; or from the maker of "New Order" fashions, the Chinese People's Liberation Army. Or from Bin Laden Construction corporation. Or Bin Laden Destruction Corporation.
Right now, corporations can give loads of loot through PACs. While this money stinks (Barack Obama took none of it), anyone can go through a PAC's federal disclosure filing and see the name of every individual who put money into it. And every contributor must be a citizen of the USA.
But under today's Supreme Court ruling that corporations can support candidates without limit, there is nothing that stops, say, a Delaware-incorporated handmaiden of the Burmese junta from picking a Congressman or two with a cache of loot masked by a corporate alias.
Candidate Barack Obama was one sharp speaker, but he would not have been heard, and certainly would not have won, without the astonishing outpouring of donations from two million Americans. It was an unprecedented uprising-by-PayPal, overwhelming the old fat-cat sources of funding.
Well, kiss that small-donor revolution goodbye. Under the Court's new rules, progressive list serves won't stand a chance against the resources of new "citizens" such as CNOOC, the China National Offshore Oil Corporation. Maybe UBS (United Bank of Switzerland), which faces U.S. criminal prosecution and a billion-dollar fine for fraud, might be tempted to invest in a few Senate seats. As would XYZ Corporation, whose owners remain hidden by "street names."
George Bush's former Solicitor General Ted Olson argued the case to the court on behalf of Citizens United, a corporate front that funded an attack on Hillary Clinton during the 2008 primary. Olson's wife died on September 11, 2001 on the hijacked airliner that hit the Pentagon. Maybe it was a bit crude of me, but I contacted Olson's office to ask how much "Al Qaeda, Inc." should be allowed to donate to support the election of his local congressman.
Olson has not responded.
The danger of foreign loot loading into U.S. campaigns, not much noted in the media chat about the Citizens case, was the first concern raised by Justice Ruth Bader Ginsburg, who asked about opening the door to "mega-corporations" owned by foreign governments. Olson offered Ginsburg a fudge, that Congress might be able to prohibit foreign corporations from making donations, though Olson made clear he thought any such restriction a bad idea.
Tara Malloy, attorney with the Campaign Legal Center of Washington D.C. says corporations will now have more rights than people. Only United States citizens may donate or influence campaigns, but a foreign government can, veiled behind a corporate treasury, dump money into ballot battles.
Malloy also noted that under the law today, human-people, as opposed to corporate-people, may only give $2,300 to a presidential campaign. But hedge fund billionaires, for example, who typically operate through dozens of corporate vessels, may now give unlimited sums through each of these "unnatural" creatures.
And once the Taliban incorporates in Delaware, they could ante up for the best democracy money can buy.
In July, the Chinese government, in preparation for President Obama's visit, held diplomatic discussions in which they skirted issues of human rights and Tibet. Notably, the Chinese, who hold a $2 trillion mortgage on our Treasury, raised concerns about the cost of Obama's health care reform bill. Would our nervous Chinese landlords have an interest in buying the White House for an opponent of government spending such as Gov. Palin? Ya betcha!
The potential for foreign infiltration of what remains of our democracy is an adjunct of the fact that the source and control money from corporate treasuries (unlike registered PACs), is necessarily hidden. Who the heck are the real stockholders? Or as Butch asked Sundance, "Who are these guys?"
We'll never know.
Hidden money funding, whether foreign or domestic, is the new venom that the Court has injected into the system by its expansive decision in Citizens United.
We've been there. The 1994 election brought Newt Gingrich to power in a GOP takeover of the Congress funded by a very strange source.
Congressional investigators found that in crucial swing races, Democrats had fallen victim to a flood of last-minute attack ads funded by a group called, "Coalition for Our Children's Future." The $25 million that paid for those ads came, not from concerned parents, but from a corporation called "Triad Inc."
Evidence suggests Triad Inc. was the front for the ultra-right-wing billionaire Koch Brothers and their private petroleum company, Koch Industries. Had the corporate connection been proven, the Kochs and their corporation could have faced indictment under federal election law. As of today, such money-poisoned politicking has become legit.
So it's not just un-Americans we need to fear but the Polluter-Americans, Pharma-mericans, Bank-Americans and Hedge-Americans that could manipulate campaigns while hidden behind corporate veils. And if so, our future elections, while nominally a contest between Republicans and Democrats, may in fact come down to a three-way battle between China, Saudi Arabia and Goldman Sachs.
Greg Palast is the author of the New York Times bestseller The Best Democracy Money Can Buy." Palast investigated Triad Inc. for The Guardian (UK). View Palast's reports for BBC TV and Democracy Now! at www.gregpalast.com.
Published on Monday, January 25, 2010 by Huffington Post
Wall Street Bonuses Can Create One Million Green Jobs
by Les Leopold
President Obama may be joining the populist crusade against Wall Street. In the span of one week he opened up a three front war: a tax on big banks, full support for a new Consumer Financial Protection Agency, and the embrace of Paul Volcker's plan to break up the big banks.
It's about time. Or has the time already passed?
Yes, there is enormous popular anger against Wall Street and the bailouts. However, the deepest anger is rooted in the enormous fears and hardships caused by the lack of jobs.
Obama is responding with a call for another stimulus in the form tax breaks for small businesses and for the weatherization of homes. Not good enough. The scale and scope of his proposals are unlikely to alleviate enough of the pain and suffering experienced by jobless Americans. Unfortunately, the Administration does not realize how deeply the crisis of employment is built into our billionaire bailout society.
So what should Obama do?
Declare a national jobs emergency. Then tie taxes on Wall Street's bonuses directly to job creation on Main Street. Make it simple. Make it fair. Make it fast.
Instead of taxing the banks through his proposed complex asset liability tax which most Americans really don't understand (and which will be lobbied into Swiss cheese), he should slap a windfall profits tax on the $150 billion record bonus pool, which every American can grasp. (Rep. Dennis Kucinich's bill for a 75 percent bonus tax is waiting for Obama's support.)
It's not hard to connect the dots: That bonus money comes directly and indirectly from taxpayer bailouts to Wall Street. That's our money. Take it back and create jobs with it.
At the same time, President Obama should announce the creation of a million-person weatherization corps to insulate every American home, business and public building. The energy efficiency benefits would be wonderful to reduce carbon emissions, global warming, and oil imports. (Do the math: 75 percent windfall profits tax on $150 billion bonus pool equals $112.5 billion. At $100,000 per job including benefits, administration and supplies, you could create more than one million green weatherization jobs.)
But the key is putting one million people to work on this vital national security task before November - that is before corporate donations unleashed by the Supreme Court make a mockery of elections.
Let's keep in mind how we got here. For thirty years the financial lobbyists and their willing partners in Congress and the White House engaged in an orgy of deregulation and tax reform, resulting in wealth accumulation in the hands of a few. So much money accumulated with the wealthy, that they literally ran out of investments in tangible assets in the real economy. Wall Street solved that problem by creating a menagerie of deregulated fantasy finance instruments that sucked up the surplus wealth and earned Wall Street more profits that ever before. (Summers and Geithner were avid cheerleaders for this process.)
The process of securitization and derivatives was creating an upside down pyramid of synthetic instruments leveraged on top of risky assets like subprime loans, which in turn created an enormous housing bubble. (And before that the dot.com bubble, the savings and loan crisis, and so on--it should be clear by now that we're dealing with a distended financial sector that inherently builds bubbles.)
The one clear plus was that the artificial housing bubble also created jobs in the housing supplies, construction, and financial industries, even as our manufacturing sector was dismantled piece by piece and moved to low-wage areas around the world. Average wages stagnated and declined, but Americans, overall, were working.
It's now clear that that these jobs and faux prosperity were built on financial rot. As soon as housing prices stopped rising, the entire upside down pyramid of leveraged assets came crashing down. The financial sector froze and threw the world economy to the brink of another Great Depression. The real economy, starved for credit, went into an immediate tailspin and unemployment shot through the roof. There are now nearly 30 million Americans without jobs or forced into part-time work.
The theory of recovery adopted both by the Bush and the Obama administrations was this: stabilize the financial sector with enormous bailouts to stop the financial implosion and provide stimulus bills to kick-start the real economy. This combination was supposed to lead to a rapid recovery both for financial assets (including our 401ks and pensions) and for the creation of real jobs.
It didn't quite work out that way. The financial sector, which is still living off an array of hidden government guarantees, asset purchases, and cheap money, is making enormous profits again. (If you want to see clearly how TARP is just a small part of the Wall Street bailout package, take your blood pressure pills and go look at Nomi Prins's excellent accounting ). Meanwhile the real jobless rate is well over 17 percent.
And just to rub it so it really stings, Wall Street has the chutzpah to award itself a record bonus pool of $150 billion during the worst economic year since the Great Depression. This pool would be a negative number were it not for trillions of dollars of taxpayer welfare for Wall Street.
In our new billionaire bailout society, Wall Street's elites have the ability to restart its speculative money-making games without loaning money to Main Street's businesses. They have a slew of ways to game the system so that the federal money and support flows into their bonus pools. Loan making is still declining even as their profits rise, making a mockery of their role as distributors of capital to the real economy. It is highly questionable if these non-lending financial firms are producing any economic worth at all for our economy.
So Obama is stuck with a bailout and stimulus package that only half worked. At an enormous long-term cost, it may have succeeded to stabilize the financial system and to avoid another Great Depression, at least for now. But it failed to create sufficient jobs to make up for the crater in our economy created by Wall Street's speculative crash.
So he needs to directly put Americans to work unless he and the Democrats want to lose their jobs as well. Although the most efficient means to create one million weatherization jobs would be through direct public employment (like a new WPA), the anti-government mood requires that we use as many private contractors as possible. That kind of government funded/private contractor partnership should be able to cut through the ideological barriers because Americans will understand that employing people in useful jobs is fundamentally worthwhile. We need to save energy. We need work. And, we need to make the bankers, who so recently wrecked our economy, pay for it.
This will never happen unless the President stays on message every day. He also needs to act as if we were in a dire national jobs emergency, which we are.
It was telling to watch the President at his recent town hall meeting in Elyria, Ohio. Although the session was billed as a jobs event, he revealed his real concerns when he concluded with a call for health care reform and energy legislation. As important as those issues are to all of us, he'll never get there unless he focuses on jobs, jobs and more jobs until we are working again.
At the same time, the President should challenge the "do nothing" Republicans and their blue-dog Democratic cousins to put up or shut up on jobs. If they refuse to pass the needed legislation, the President should redirect unspent funds from other programs to combat the jobs emergency. No one will blame him for playing hard ball on jobs creation.
Is it realistic to create a million jobs in a short period of time? We'll never know unless someone tries. But if we limit ourselves to advocating only what seems realistic, here's the sickening reality that awaits us: bankers walking off with record bonuses during a year in which they nearly destroyed our economy, and during a year in which we bailed them out with trillions of dollars of taxpayer welfare.
It would be an important morale booster for the country to create green jobs - one million of them -by November.
Isn't that change we can believe in?
Published on Monday, January 25, 2010 by CommonDreams.org
Where's the Movement?
by George Lakoff
In forming his administration, President Obama abandoned the movement that had begun during his campaign for deal-making and a pragmatism that hasn't worked. That movement is still possible and needed now. Here is look at what is required, and how a version of it is forming in California.
We begin with this week's triple whammy.
Freedom vs. The Public Option
Which would you prefer, consumer choice or freedom? Extended coverage or freedom? Bending the cost curve or freedom?
John Boehner, House Minority Leader, speaking of health care, said recently, "This bill is the greatest threat to freedom that I have seen in the 19 years I have been here in Washington. . . It's going to lead to a government takeover of our health care system, with tens of thousands of new bureaucrats right down the street, making these decisions [choose your doctor, buy your own health insurance] for you."
This is exactly what Frank Luntz advised conservatives to say. They have repeated it and repeated it. Why has it worked to rally conservative populists against their interests? The most effective framing is more than mere language, more than spin or salesmanship. It has worked because conservatives really believe that the issue is freedom. It fits the conservative moral system. It fits how conservatives see the world.
The Democrats have helped the conservatives. Their pathetic attempt to make any deal to get 60 votes convinced even Massachusetts voters that government under the Democrats was corrupt and oppressive, not just inept, but immoral.
All politics is moral
All political leaders argue that they are doing the right thing, not the wrong thing, that their policies are moral, not evil.
Conservatives understand this, liberals tend not to. Conservatives know a morality tale when they see it: Greedy Wall Street bankers, who have cost people their homes, their jobs, and their savings get billion-dollar bailouts from the government, while those honest hard-working people get nothing. Corruption. Oppression. A threat to freedom.
The conservatives are winning the framing wars again - by sticking to moral principles as conservatives see them, and communicating their view of morality effectively. In the 2008 election, Barack Obama ran a campaign based on his moral principles and communicated those principles as effectively as any candidate ever has.
But the Obama administration made a 180-degree turn, trading Obama's 2008 moral principles for the deal-making of Rahm Emanuel and Tim Geithner, assuming it would be 'pragmatic' to court corporations and move to the right, in the false hope of bipartisan support. A clear unified moral vision was replaced by long laundry lists of policy options that the public could not understand, and that made ordinary folks feel they were being bamboozled. And in many cases, they were.
Even the language was a disaster. Liberals thought that conservatives would like consumer choice. That's why they used "public option." As Harry Reid said, "It's public and it's an option - a public option." But what did a conservative hear in the words "public option?" Say "public" and he hears "government." "Option" is a policy-wonk term, from the language of bureaucracy. Say "public option" and the conservative hears "government bureaucracy."
The results of deal-making in the name of pragmatism have been considerably immoral, as documented thoroughly by progressives like Drew Westen ,Matt Taibbi, Robert Kuttner , and many others. Advice on what to do instead has not been lacking from other progressives. Advice is all over the blogs.Guy Saperstein is an excellent example.
We progressives are long on factual analysis, critique, suggestion - and ridicule. Rachel Maddow is one of the best, and her popularity is well-deserved. What's more fun than ridiculing Tea Party-ers, Sarah Palin, Glenn Beck, and the like, by showing the factual errors, the flaws in their logic, and the cruelty of their positions.
But we have been dealt a triple blow. A year of failed deal-making by our side, the Tea Party win in Massachusetts, and worst of all, the 5-4 Supreme Court decision to turn our democracy into a corporate plutocracy. This is serious.
Democrats still have the presidency and a majority in the House and Senate, but the momentum is on the conservative side. Their victories in the framing wars have inevitably led to a crucial electoral victory and to a Supreme Court death threat to democracy itself, framed as free speech.
Democrats have electoral power, but progressives have not created an effective movement to take advantage of that power.
"Where's the movement?"
In the emerging Obama mythology, this is the question attributed to President Obama whenever he is asked to take the lead on a progressive issue. It is not an idle question. Leaders can only lead if there is a pre-existing movement for them to get in front of.
Moreover, there are other conditions. The idea behind a movement, and the language expressing its goals, must also pre-exist in public discourse. In other words, the movement must already have:
- a popular base;
- organizing tools;
- a generally accepted morally-based conceptual framing;
- an overall narrative, with heroes, victims, and villains;
- a readily recognizable, well-understood language;
- funding sources;
- and a national communication system set up for both leaders and ordinary citizens to use.
The base is there, waiting for something worth getting behind. The organizing tools are there. The rest is not there.
That is the present reality. Expecting Obama to be FDR was politically unrealistic. And complaining that he isn't doesn't move anything forward.
Howard Dean was right when he said, "YOU have the power." What is needed is an organized activist public with a positive understanding of what our values are and how to links them to every issue. Barney Frank was only half-right when he said that the public gets active only when it is angry. That may be true for isolated issues - he was talking about regulating Wall Street. But anger is directed at isolated negatives. An effective movement must be positive, organized, and long-term, where an overall positive understanding defines the isolated negatives. And it must have all of the above.
The California Democracy Movement
We have the beginning of such a movement in California.
The central issue in California is basic democracy. California is the only state in America where the legislature is controlled by a relatively small conservative minority. Because it takes a 2/3 vote in both the Senate and Assembly to pass a budget or any tax, 1/3 plus one - 34% - in either house can control the vote by saying no to measures that would finance public needs.
Conservatives exercise that control for the simple reason that they don't believe that government should serve public needs, that instead government should be privatized and shrunk to fit in a bathtub, as if governing would disappear with government.
But governing doesn't disappear when government shrinks; instead corporations come to govern your life - like HMO's, oil companies, drug companies, agribusiness, and so on, with accountability only to maximizing profit, not to public needs.
An overwhelming majority of Californians - over 60% - disagree. They believe that government should serve public needs, and they have elected sensible legislators. But they don't quite make up 2/3. And so an extreme right-wing minority - about 37% - controls the state, its present and its future.
Luckily, there is a way out for the majority in California. The initiative process that created this situation can get us out. I have proposed The California Democracy Act as an initiative in the November 2010 election. It changes two words in the California Constitution - "two-thirds" becomes "a majority" in two places. It can be described in one simple sentence: All legislative actions on revenue and budget must be determined by a majority vote.That ballot initiative needs only a majority to pass. It would return majority rule to the legislature on everyday economic issues, bringing democracy back to California. Those interested can join the campaign by clicking on www.CaliforniansForDemocracy.com
Democracy is the central issue, and that is what our movement is about. We are setting up an infrastructure in California, with a statewide organization and a speakers' bureau, for those who want to continue democratizing the state after the election.
Democracy is The Issue
The majority vote campaign gives us a chance to talk not only about this particular issue, but about democracy as it affects all issues. The clearest articulator of what democracy is about has been Barack Obama - the campaigner we cheered for, campaigned hard for, and voted for.
Democracy, he has observed, is based on empathy - on citizens caring about one another. That's why we have principles like freedom and fairness, for everybody, not just for the rich and powerful. True empathy requires responsibility, not just for oneself, but also for others. And since we, as individuals and as a nation, are far from perfect, empathy demands an ethic of excellence, of making oneself better, one's family and community better, and one's nation better.
That view of citizenship in a democracy comes with a view of government. Government has two sacred moral missions: protection and empowerment.
Protection goes well beyond police and the military and the fire department to consumer protection, environmental protection, worker protection, health care, investor protection, social security, and other safety nets.
Empowerment is what the stimulus package was about: building and maintaining roads, bridges, public transportation, and public buildings; systems for communication, electricity, water; education, from pre-school through graduate and professional schools; scientific research and technological development; a banking system that works; a stock market that works; and a judicial system that works.
No one earns a living or lives well without protection and empowerment by the government. That is what taxes pay for. And the more you make from what the government gives you, the more you should contribute to keeping it going
Tax Shifts
When you cut taxes that pay for public needs, you are actually shifting taxes. You are taxing others. In California tax cuts for corporations last year led to cuts in the support for public universities, which led to 32% higher tuition and a drastic cut in the number of students educated. That 32% constituted a tax on those students and their parents, and when they had to borrow the money for college, interest payments on the loan effectively double the cost of the loan. That's a very high tax shift. But an even higher tax is shifted onto students who cannot afford the higher tuition: the tax of a lost education lasts all one's life and its cost is not only monetary, but a cost in human potential. It is also a cost to employers, who get less educated workers, and to society, which gets less educated citizens.
The Movement
We will be talking about all of this and more. Take economic democracy. California is the world's seventh richest economy. It is ludicrous to say that there is no money in California. If the money for public needs is there, where is it? In California, the richest one percent owns more assets than the bottom 95 per cent. The money is concentrated at the top.
Just about every issue comes down to the issue of democracy. That is why we are starting with the California Democracy Act, which would finally end the rule of the state by a small minority of ultra-conservative legislators. It would finally give the voters of the state a voice in their own future and the future of their children and grandchildren.
If you live in California (one out of eight Americans does), then join the California Democracy Movement. If you live elsewhere, form your own democracy movement and unite with us. The principles are simple, and they are Obama's:
Democracy is about empathy - caring about your fellow citizens, which leads to the principles of freedom and fairness for all. Empathy requires both personal and social responsibility. The ethic of excellence means making the world better by making yourself better, your family better, your community better, and your nation better. Government has two moral missions: protection and empowerment for all. To carry them out, government must be by, for, and of the people.
It's only a paragraph. The principles apply to all issues. That's the basis of a democracy movement. That's what separates a movement from a coalition. Coalitions are based on interests. Movements are based on principles. We need a movement that transcends interests and goes beyond coalitions.
Movements also transcend particular policies. The framing of moral principles comes first and the policies elaborate on the principles. The way to unite a movement is to form policies that carry out the principles in ways that everyone can understand.
The time is now
We have a triple disaster on our hands: the administration's failure at deal-making in the name of pragmatism and bipartisanship; the Tea Party victory in Massachusetts fueling and propelling ultra-conservatism; and the anti-democratic 5-4 ruling of the Roberts Court. We can no longer sit on our hands and just criticize the President, or give him advice and hope he can do it alone. We have to provide the answer to his question: Where's the movement?
George Lakoff is the author of Moral Politics , Don't Think of an Elephant! , Whose Freedom? , and Thinking Points (with the Rockridge Institute staff). He is Richard and Rhoda Goldman Distinguished Professor of Cognitive Science and Linguistics at the University of California at Berkeley, and a founding senior fellow at the Rockridge Institute .
American Academics Disappointed with Obama
By Sherwood Ross |
Global Research, January 24, 2010 |
Based on his first year in office, American academics are expressing disappointment in President Obama’s performance and believe he is headed toward a “mediocre” presidency.
That’s the term liberal historian Howard Zinn of Boston University uses in an article that solicited many viewpoints in the February 1st issue of The Nation magazine. Zinn adds that Obama’s foreign policy is “Hardly any different from a Republican…nationalist, expansionist, imperial and warlike.” And he adds that “mediocre” means “dangerous.”
Conservative Andrew Bacevich, professor of international relations at Boston University, writes, “Obama’s decision to escalate the war in Afghanistan indicates that he will not break with the existing national security consensus. The candidate who promised to ‘change the way Washington works’ has become Washington’s captive.”
Disappointment also characterizes the view of Glenn Loury, professor of the social sciences at Brown University. He says the high point of Obama’s administration was its inauguration “but it has been downhill since.” He complains “Obama has said little of substance about racial inequality” and “what he has said leaves much to be desired.”
On the subject American militarism, Loury says, “His conduct of the ‘war on terror’ and, most distressing, his escalation of our involvement in Afghanistan’s civil war is eerily reminiscent of the approach of his immediate predecessor. This is not change of any kind, let alone of the kind that we can believe in.”
Sociologist Katherine Newman, of Princeton, says, “The symbolic victory of our first African-American presidency gave way to disappointment over his centrism, which comes as no great surprise since Obama never advertised himself as a man of the left. And indeed, he isn’t.”
Marcia Angell, M.D., a Senior Lecturer at Harvard Medical School, writes, “count me among those who are disappointed in his (Obama’s) first year.” The reason: “He seems to lack the courage to push for the fundamental reforms necessary to deal with the enormous problems we face, and instead appeases the very forces that have gotten us into this mess.”
On health care, “the reform bill Obama is cobbling together wrongly retains the central role of the private insurance companies and requires millions of people to buy their products at whatever price they charge.”
Angell says her sharpest disappointment is when the administration backed the prohibition against buying lower-priced drugs from Canada and Europe. “During his campaign, Obama promised to end this absurd restriction, but now he’s siding with the pharmaceutical industry.”
In a related article in the magazine’s same issue, historian Eric Foner of Columbia University writes Obama has not learned to question the assurances of the Pentagon, “the lesson (President) Kennedy learned from the Bay of Pigs debacle at the outset of his presidency.”
Foner writes, “it is difficult to view Obama’s initial year without a feeling of deep disappointment.” On the domestic front, for example, Foner says it is “unlikely that an avowedly postracial president will directly address” the plight of blacks, whose economic condition continues to worsen.
Like President Jimmy Carter, “he does not have an industrial policy or a robust jobs-creation program and seems uninterested in addressing the hardships and structural imbalances caused by the decline of manufacturing,” Foner observed.
Adolph Reed, political scientist at the University of Pennsylvania, writes that as far back as the summer of 2007 Obama indicated that, if elected, he would “extend the war in Afghanistan into Pakistan.” Concludes Reed: “The only surprise about his presidency is how many ersatz leftists cling to the fiction that he’s anything other than a superficially articulate neoliberal Democrat in the Clinton mold and that his administration would act in any other way.”
How representative the above viewpoints may be of academic thinking generally is anybody’s guess but they fairly ooze disappointment. In sum, they describe Obama as plunging USA deeper into war while neglecting a home front that is falling apart. This week’s upset Republican victory for the late Senator Kennedy’s seat in liberal Massachusetts may be only a foretaste of the political disaster in store for Obama’s party. The biggest losers, of course, will be the people of the Middle East, whose suffering from American invasions and occupations continues without letup. #
Sherwood Ross is a Miami-based public relations consultant and columnist. He has reported for the Chicago Daily News and worked as a columnist for wire services. Reach him at sherwoodross10@gmail.com
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Americans Need Debt Relief -- Is Obama Brave Enough to Make It Happen?
By Danny Schechter, AlterNet
Posted on January 25, 2010, Printed on January 25, 2010
http://www.alternet.org/story/145377/
Stung by the election of Scott Brown in Massachusetts, the abandonment of his health care initiative by members of Congress and fearful of a political backlash, President Obama may have realized that he himself is not "too big to fail." He has now "pivoted," to use a favorite phrase from the pundits, and shifted his focus to trying to fix a still deteriorating economy.
He has gone from coddling the banks to turning on them with strong rhetoric that has financial stocks reeling, and progressives cheering. Analysts who have looked at the content of his new rules though, say they are vague enough to dive a supertanker through. Another reform in name and gesture but not in reality!
The administration is also floating new proposals to reenergize a foreclosure relief program that has brought little relief to beleaguered homeowners. More liberal terms for loan repayments are being introduced especially for those who have trouble paying their mortgages because they have lost jobs.
Today, default/delinquency/foreclosure rates continue to skyrocket and soon there will be more prime mortgages in arrears than subprime ones. More than 25% of all homes are now "under water." Millions more families are at risk. Foreclosures continue to rise. The housing crisis at the center of the financial crisis has not been "fixed."
What to do? Doing nothing is no longer an option.
This crisis will spill over into the political arena unless the Administration does a lot more than it is doing.
For nearly two years, I have been calling to modify loans, not foreclose on homes. The government said they would do it but their programs don’t appear to be working because banks and real estate companies make more money foreclosing than making deals that keep homeowners under their roofs.
The consequence: 14 million families—and we are talking millions of children too—forced into the streets or worse conditions.
The New York Times blamed the President's Making Home Affordable program for increasing the agony of homeowners:
Since President Obama announced the program in February, it has lowered mortgage payments on a trial basis for hundreds of thousands of people but has largely failed to provide permanent relief. Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes.
Wrote a critic on the Atlantic website:
Obama's Making Home Affordable program is actually increasing the agony of homeowners, who pour money down the rat hole of their mortgage rather than recognizing the loss and starting over. In the meantime, the modification programs disguise the true condition of bank balance sheets (because modified mortgages are not yet non-performing mortgages), and slow down the process of recovery.
The Washington Post found, "The government's foreclosure relief program is sputtering, according to government data showing that the pace of help being offered to struggling homeowners slowed last month and many borrowers are at risk of losing the aid they have already received."
The LA Times went further:
Only 31,382 of more than 700,000 mortgage modifications under the federal program had been made permanent by the end of November…The numbers reinforced the bleak picture that Treasury Department officials painted last week when they said the number of permanent reductions was low. They unveiled new measures, including the threat of fines, to push mortgage servicers to improve their performance.
When airport security doesn’t work, they junk it. It is time to do the same with programs that are not helping homeowners. These half-measures that are being so half-heartedly implemented are a cruel disgrace.
But if we are to solve this problem, we are going to need to press the administration and the banks to recognize they must go farther. To achieve that, we need to get back in the streets to push for what we really need: debt relief, and a moratorium on foreclosures.
Sound radical? It isn’t -- there are precedents. The US government and even Republicans have backed debt forgiveness … in Africa.
There, our government and others agreed to debt forgiveness programs because it was clear that colonial powers had illegally shackled the newly independent states with an unsustainable debt burden. Those debts were imposed, suffocating, unfair and illegal.
Recently, just before the earthquake, Haiti won a billion dollars in debt forgiveness and then promptly began to borrow money again. Haiti’s problems may mirror our own in another way, with Presidential proclamations of "help on the way" undermined by poor or non-existent delivery.
There is a moral and legal case for going beyond existing programs.
In our country, millions of people were talked into taking bogus subprime loans that lenders knew were deceptive. According to the FBI there was "an epidemic of mortgage fraud." These loans were then securitized by Wall Street and sold worldwide with misrepresented values. Another fraud.
They were also insured by companies like AIG with shady insurance deals to guard against the defaults they knew would follow. This was not just business as usual but, in part, a criminal enterprise. There are many foreclosure relief scams too. A lawyer in Orange County California was just charged with engineering 400 foreclosure modification frauds.
Compensating victims of predatory rip-offs is only fair. Human rights should come before property rights.
An Online Legal Dictionary reminds us that the government has powers to act that it is not using.
"As a function of its Police Power, a state may suspend contractual rights when public welfare, health, or safety are threatened. During the World War I housing shortage, some New York landlords raised rents to exorbitant levels and evicted tenants who failed to pay…"
Some states went farther, imposing a debt moratorium. In happened in Minnesota during the depression when there was a sharp rise in foreclosures on farm property, "Fifty years later the Minnesota legislature responded again to public pressure to relieve farm debts by passing another Mortgage Moratorium Act (Minn. Stat. § 583.03 [Supp. 1983])."
"In its view, the state had a right under its police power to declare an economic emergency," says the writer Alex Abella, who contributes to the LA Times, "to safeguard the public and promote the general welfare of the people" which necessitated the drafting and implementing of the moratorium.
"Needless to say, financial interests -- banks, loan holders -- sued, losing both at the state and the federal level. When the case finally arrived at the U.S. Supreme Court, Chief Justice Charles Evans, in the case of Blaisdell versus Home Building & Loan Association upheld the constitutionality of the moratorium as a "reasonable means to safeguard the economic structures upon which the good of all depend."
If you believe as I do that there is an economic emergency underway affecting the most vulnerable among us, as foreclosures grow and poverty deepens, isn’t it time to start demanding debt relief, not just temporary adjustments such as questionable mortgage modifications? If we can sanction other countries for violating laws, why not the crooked banks and lenders?
Some may consider this demand unrealistic, but sometimes demanding the impossible is precisely what makes the possible more possible. Remember the lesson Dr. Martin Luther King taught us: "We never get change without demanding it. We never have and we never will."
Danny Schechter writes the News Dissector blog for MediaChannel.org. His latest book is PLUNDER: Investigating Our Economic Calamity (Cosimo Books).
Shrimp's Dirty Secrets: Why America's Favorite Seafood Is a Health and Environmental Nightmare
By Jill Richardson, AlterNet
Posted on January 25, 2010, Printed on January 25, 2010
http://www.alternet.org/story/145369/
Americans love their shrimp. It's the most popular seafood in the country, but unfortunately much of the shrimp we eat are a cocktail of chemicals, harvested at the expense of one of the world's productive ecosystems. Worse, guidelines for finding some kind of "sustainable shrimp" are so far nonexistent.
In his book, Bottomfeeder: How to Eat Ethically in a World of Vanishing Seafood, Taras Grescoe paints a repulsive picture of how shrimp are farmed in one region of India. The shrimp pond preparation begins with urea, superphosphate, and diesel, then progresses to the use of piscicides (fish-killing chemicals like chlorine and rotenone), pesticides and antibiotics (including some that are banned in the U.S.), and ends by treating the shrimp with sodium tripolyphosphate (a suspected neurotoxicant), Borax, and occasionally caustic soda.
Upon arrival in the U.S., few if any, are inspected by the FDA, and when researchers have examined imported ready-to-eat shrimp, they found 162 separate species of bacteria with resistance to 10 different antibiotics. And yet, as of 2008, Americans are eating 4.1 pounds of shrimp apiece each year -- significantly more than the 2.8 pounds per year we each ate of the second most popular seafood, canned tuna. But what are we actually eating without knowing it? And is it worth the price -- both to our health and the environment?
Understanding the shrimp that supplies our nation's voracious appetite is quite complex. Overall, the shrimp industry represents a dismantling of the marine ecosystem, piece by piece. Farming methods range from those described above to some that are more benign. Problems with irresponsible methods of farming don't end at the "yuck," factor as shrimp farming is credited with destroying 38 percent of the world's mangroves, some of the most diverse and productive ecosystems on earth. Mangroves sequester vast amounts of carbon and serve as valuable buffers against hurricanes and tsunamis. Some compare shrimp farming methods that demolish mangroves to slash-and-burn agriculture. A shrimp farmer will clear a section of mangroves and close it off to ensure that the shrimp cannot escape. Then the farmer relies on the tides to refresh the water, carrying shrimp excrement and disease out to sea. In this scenario, the entire mangrove ecosystem is destroyed and turned into a small dead zone for short-term gain. Even after the shrimp farm leaves, the mangroves do not come back.
A more responsible farming system involves closed, inland ponds that use their wastewater for agricultural irrigation instead of allowing it to pollute oceans or other waterways. According to the Monterey Bay Aquarium's Seafood Watch program, when a farm has good disease management protocols, it does not need to use so many antibiotics or other chemicals.
One more consideration, even in these cleaner systems, is the wild fish used to feed farmed shrimp. An estimated average of 1.4 pounds of wild fish are used to produce every pound of farmed shrimp. Sometimes the wild fish used is bycatch -- fish that would be dumped into the ocean to rot if they weren't fed to shrimp -- but other times farmed shrimp dine on species like anchovies, herring, sardines and menhaden. These fish are important foods for seabirds, big commercial fish and whales, so removing them from the ecosystem to feed farmed shrimp is problematic.
Additionally, some shrimp are wild-caught, and while they aren't raised in a chemical cocktail, the vast majority is caught using trawling, a highly destructive fishing method. Football field-sized nets are dragged along the ocean floor, scooping up and killing several pounds of marine life for every pound of shrimp they catch and demolishing the ocean floor ecosystem as they go. Where they don't clear-cut coral reefs or other rich ocean floor habitats, they drag their nets through the mud, leaving plumes of sediment so large they are visible from outer space.
After trawling destroys an ocean floor, the ecosystem often cannot recover for decades, if not centuries or millennia. This is particularly significant because 98 percent of ocean life lives on or around the seabed. Depending on the fishery, the amount of bycatch (the term used for unwanted species scooped up and killed by trawlers) ranges from five to 20 pounds per pound of shrimp. These include sharks, rays, starfish, juvenile red snapper, sea turtles and more. While shrimp trawl fisheries only represent 2 percent of the global fish catch, they are responsible for over one-third of the world's bycatch. Trawling is comparable to bulldozing an entire section of rainforest in order to catch one species of bird.
Given this disturbing picture, how can an American know how to find responsibly farmed or fished shrimp? Currently, it's near impossible. Only 15 percent of our total shrimp consumption comes from the U.S. (both farmed and wild sources). The U.S. has good regulations on shrimp farming, so purchasing shrimp farmed in the U.S. is not a bad way to go. Wild shrimp, with a few exceptions, is typically obtained via trawling and should be avoided. The notable exceptions are spot prawns from British Columbia, caught in traps similar to those used for catching lobster, and the small salad shrimp like the Northern shrimp from the East Coast or pink shrimp from Oregon, both of which are certified as sustainable by the Marine Stewardship Council. However, neither are true substitutes for the large white and tiger shrimp American consumers are used to.
The remaining 85 percent came from other countries and about two-thirds of our imports are farmed with the balance caught in the wild, mostly via trawling. China is the world's top shrimp producer -- both farmed and wild -- but only 2 percent of China's shrimp are imported to the U.S. The world's number two producer, Thailand, is our top foreign source of shrimp. Fully one third of the shrimp the U.S. imports comes from Thailand, and over 80 percent of those shrimp are farmed.
The next biggest sources of U.S. shrimp are Ecuador, Indonesia, China, Mexico, Vietnam, Malaysia and India. Together, those countries provide nearly 90 percent of America's imported shrimp. Interestingly, Ecuador's shrimp industry exists almost entirely to supply U.S. demand, with over 93 percent of its shrimp coming up north to the U.S. The vast majority of those shrimp (almost 90 percent) are farmed. Sadly, shrimp production is responsible for the destruction of 70 percent of Ecuador's mangroves. Farming practices in other countries range from decent to awful, but there's currently no real way for a consumer to tell whether shrimp from any particular country was farmed sustainably or not.
Geoff Shester, senior science manager of Monterey Bay's Seafood Watch, says that ethical shrimp consumption is a chicken and egg problem. On one hand, the solution is for consumers to show demand for responsibly farmed and wild shrimp by eating it but on the other hand, ethical shrimp choices are not yet widely available. Seafood Watch is working with some of the largest seafood buyers in the U.S. to help them buy better shrimp, but it's currently a major challenge.
The first challenge is that labeling and certification programs do not yet exist to identify which farmed shrimp meet sustainable production standards. The second challenge is that even when such programs are in place, the U.S. demand will likely greatly exceed their supply.
Shester's advice to consumers right now is "only buy shrimp that you know comes from a sustainable source. If you can't tell for sure, try something else from the Seafood Watch yellow or green lists." Knowing that many will be unwilling to give up America's favorite seafood, he advocates simply eating less of it and keeping an eye on future updates to the Seafood Watch guide to eating sustainable seafood.
Jill Richardson is the founder of the blog La Vida Locavore and a member of the Organic Consumers Association policy advisory board. She is the author of Recipe for America: Why Our Food System Is Broken and What We Can Do to Fix It..
Democracy in America Is a Useful Fiction
Posted on Jan 24, 2010
By Chris Hedges
Corporate forces, long before the Supreme Court’s decision in Citizens United v. Federal Election Commission, carried out a coup d’état in slow motion. The coup is over. We lost. The ruling is one more judicial effort to streamline mechanisms for corporate control. It exposes the myth of a functioning democracy and the triumph of corporate power. But it does not significantly alter the political landscape. The corporate state is firmly cemented in place.
The fiction of democracy remains useful, not only for corporations, but for our bankrupt liberal class. If the fiction is seriously challenged, liberals will be forced to consider actual resistance, which will be neither pleasant nor easy. As long as a democratic facade exists, liberals can engage in an empty moral posturing that requires little sacrifice or commitment. They can be the self-appointed scolds of the Democratic Party, acting as if they are part of the debate and feel vindicated by their cries of protest.
Much of the outrage expressed about the court’s ruling is the outrage of those who prefer this choreographed charade. As long as the charade is played, they do not have to consider how to combat what the political philosopher Sheldon Wolincalls our system of “inverted totalitarianism.”
Inverted totalitarianism represents “the political coming of age of corporate power and the political demobilization of the citizenry,” Wolin writes in “Democracy Incorporated.” Inverted totalitarianism differs from classical forms of totalitarianism, which revolve around a demagogue or charismatic leader, and finds its expression in the anonymity of the corporate state. The corporate forces behind inverted totalitarianism do not, as classical totalitarian movements do, boast of replacing decaying structures with a new, revolutionary structure. They purport to honor electoral politics, freedom and the Constitution. But they so corrupt and manipulate the levers of power as to make democracy impossible.
Inverted totalitarianism is not conceptualized as an ideology or objectified in public policy. It is furthered by “power-holders and citizens who often seem unaware of the deeper consequences of their actions or inactions,” Wolin writes. But it is as dangerous as classical forms of totalitarianism. In a system of inverted totalitarianism, as this court ruling illustrates, it is not necessary to rewrite the Constitution, as fascist and communist regimes do. It is enough to exploit legitimate power by means of judicial and legislative interpretation. This exploitation ensures that huge corporate campaign contributions are protected speech under the First Amendment. It ensures that heavily financed and organized lobbying by large corporations is interpreted as an application of the people’s right to petition the government. The court again ratified the concept that corporations are persons, except in those cases where the “persons” agree to a “settlement.” Those within corporations who commit crimes can avoid going to prison by paying large sums of money to the government while, according to this twisted judicial reasoning, not “admitting any wrongdoing.” There is a word for this. It is called corruption.
Corporations have 35,000 lobbyistsin Washington and thousands more in state capitals that dole out corporate money to shape and write legislation. They use their political action committees to solicit employees and shareholders for donations to fund pliable candidates. The financial sector, for example, spent more than $5 billion on political campaigns, influence peddling and lobbying during the past decade, which resulted in sweeping deregulation, the gouging of consumers, our global financial meltdown and the subsequent looting of the U.S. Treasury. The Pharmaceutical Research and Manufacturers of America spent $26 million last year and drug companies such as Pfizer, Amgen and Eli Lilly kicked in tens of millions more to buy off the two parties. These corporations have made sure our so-called health reform bill will force us to buy their predatory and defective products. The oil and gas industry, the coal industry, defense contractors and telecommunications companies have thwarted the drive for sustainable energy and orchestrated the steady erosion of civil liberties. Politicians do corporate bidding and stage hollow acts of political theater to keep the fiction of the democratic state alive.
There is no national institution left that can accurately be described as democratic. Citizens, rather than participate in power, are allowed to have virtual opinions to preordained questions, a kind of participatory fascism as meaningless as voting on “American Idol.” Mass emotions are directed toward the raging culture wars. This allows us to take emotional stands on issues that are inconsequential to the power elite.
Our transformation into an empire, as happened in ancient Athens and Rome, has seen the tyranny we practice abroad become the tyranny we practice at home. We, like all empires, have been eviscerated by our own expansionism. We utilize weapons of horrific destructive power, subsidize their development with billions in taxpayer dollars, and are the world’s largest arms dealer. And the Constitution, as Wolin notes, is “conscripted to serve as power’s apprentice rather than its conscience.”
“Inverted totalitarianism reverses things,” Wolin writes. “It is politics all of the time but a politics largely untempered by the political. Party squabbles are occasionally on public display, and there is a frantic and continuous politics among factions of the party, interest groups, competing corporate powers, and rival media concerns. And there is, of course, the culminating moment of national elections when the attention of the nation is required to make a choice of personalities rather than a choice between alternatives. What is absent is the political, the commitment to finding where the common good lies amidst the welter of well-financed, highly organized, single-minded interests rabidly seeking governmental favors and overwhelming the practices of representative government and public administration by a sea of cash.”
Hollywood, the news industry and television, all corporate controlled, have become instruments of inverted totalitarianism. They censor or ridicule those who critique or challenge corporate structures and assumptions. They saturate the airwaves with manufactured controversy, whether it is Tiger Woods or the dispute between Jay Leno and Conan O’Brien. They manipulate images to make us confuse how we are made to feel with knowledge, which is how Barack Obama became president. And the draconian internal control employed by the Department of Homeland Security, the military and the police over any form of popular dissent, coupled with the corporate media’s censorship, does for inverted totalitarianism what thugs and bonfires of books do in classical totalitarian regimes.
“It seems a replay of historical experience that the bias displayed by today’s media should be aimed consistently at the shredded remains of liberalism,” Wolin writes. “Recall that an element common to most 20th century totalitarianism, whether Fascist or Stalinist, was hostility towards the left. In the United States, the left is assumed to consist solely of liberals, occasionally of ‘the left wing of the Democratic Party,’ never of democrats.”
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