California Free Press

Obama's Dilemma

Obama's Recovery and Reinvestment plan passed in the House without one Republican vote despite Obama's attempts at bipartisanship. So what does this portend? He needs 60 votes in the Senate to prevent a filibuster but there are only 58 Democrats. If Al Frankin of Minnesota were seated, it would be 59 but still too few unless one Republican voted with the Democrats. What do you think are the chances of that? By the way they're still counting and recounting the votes in Minnesota so they haven't declared Democrat Al Franken a winner there yet. So far barely 10 days into Obama's Presidency, the Republicans have done everything they can to turn debates in the House and Senate rancorous. Despite much Republican outrage the SCHIP (State Children's Health Insurance Plan) bill passed yesterday. Nine Republican Senators voted with the Democrats. Will Obama be able to count on some of these Senators to vote with the Democrats on other legislation or will they tow the line if the Republicans decide to filibuster thus allowing Republicans to block any significant legislation?

The big question is will they filibuster the Recovery and Reinvestment plan in the Senate? Despite majorities in both the House and Senate and the Presidency, Republicans could hold the President hostage by virtue of the filibuster. They could demand radical changes in the Recovery and Reinvestment plan before they would vote for it. They have already come up with their own plan - more of the same - tax cuts for the rich. This has been tried for 30 years with the result that we are in the current economic impasse. Even with the Democrats firmly in power, will the Republicans try to run the legislative process? You bet they will. My prediction is that Obama will not be able to pick off the one or two Republicans needed to vote for cloture after a Republican filibuster and in order to pass the Recovery and Reinvestment plan on anything approaching his own terms or the terms that the top experts think are needed to prevent an economic calamity of earth shaking proportions.

And this is what the Republicans will do to every piece of legislation the Democrats attempt to pass. This is what they did to every piece of legislation for the last two years of the Bush administration despite Democratic control of the House and Senate. Will the leopards change their spots? They simply filibustered everything the Democrats proposed in the Senate thereby rendering them impotent. Or as an alternative they let Bush veto it. They don't have that alternative now but the filibuster is just as effective as the veto. What makes anyone think they won't go this route now? Because of Obama's political capital? Forget it. If you want to call this obstructionism, so be it but it is just the Republican plan to make the Obama administration a flop and a failure. They will hold him hostage until he caves and accedes to a bill with a Republican stamp on it and then talk about bipartisanship. This is more or less what Clinton did. He allowed them to bully him into passing their agenda.

The Democrats and Obama in particular are too nice. The Republicans are already playing hardball right out of the gate. Using the filibuster rule, they will do everything they can to insure that Obama will fail under the able leadership of Rush Limbaugh, the unofficial head of the Republican party. Take the SCHIP bill passed yesterday in the Senate but not without a show of rancor and obstreperousness by the Senate Republicans.

This from the Washington Post:

But the political victory may come at a price. The rancorous debate -- on a program that once basked in bipartisan popularity -- raised doubts about whether the two parties can unite to pass broader health reform later this year, several moderate Republicans said. "This is a very unfortunate beginning," said  Sen. Charles E. Grassley (Iowa). The top Republican on the Senate Finance Committee, a stalwart supporter of the program, said he was "disgusted" by the way Democratic leaders handled the debate. "It does not bode well for cooperative work in the coming months," he said. But Grassley emphasized that he did not blame Baucus for the change in substance and style. As the vote came just one day after the House passed an $819 billion economic stimulus package without a single Republican vote, some longtime lawmakers questioned the president's ability to forge a new era of cooperation in the capital. "If they wanted a nice signing ceremony that showed bipartisanship and carried through on the president's language, this would have been a good vehicle to do it on," said  Sen. Judd Gregg (R-N.H.). ... "We carried a lot of water and took a lot of flak" for that stand, Hatch said. To push through a different version now is "not only unfair," he said, "but a slap in the face to those of us who worked so strongly with our friends on the other side." The bill approved last night closely resembles the versions many Republicans supported in the past, countered Democrats. GOP lawmakers objected to the new provision allowing states to enroll certain legal immigrants. Until now, many immigrants' families have been forced to wait five years for coverage. "The bottom line is: This is a debate about children's health coverage," said  Sen. Richard J. Durbin (D-Ill.). "This is not a debate about immigration." In more than two days of debate -- in unusually personal and emotional language -- Republicans expressed a sense of betrayal that Democrats had dropped the 2007 compromise. "We could have had 95 votes," Hatch said. "That would have sent a tremendous, tremendous message that hasn't been sent around here for a long time." Both sides had hoped, and even predicted, that early bipartisan action on children's coverage would demonstrate that Washington's elected officials can cooperate on critical issues such as health care. "This is on something for which there is so much agreement and something that almost no one argues about," said Helen Darling, president of the National Business Group on Health, which represents 300 large employers. "For the tough things like real national health-care reform, it unfortunately portends a really rocky road." Compared to the daunting task of overhauling the entire U.S. health system, the debate on the children's health program should have been easy, said  Sen. Olympia J. Snowe (R-Maine). "You would have thought this issue would have been clear sailing on both sides," she said. Karen Ignagni, president of America's Health Insurance Plans, agreed that "we're not seeing bipartisanship" but said she is optimistic that the public's overwhelming desire for improvement in the health system will force the two parties to the bargaining table. "People are talking about how to do it as opposed to whether to do it," she said.

So what does this portend? Republican debate in the House over the Recovery and Reinvestment plan was rancorous too with the Republicans coming up with their own plan that supported tax cuts and little else. This they claimed would create twice the number of jobs as the Obama plan at half the cost. If you believe that, I have a bridge in Brooklyn to sell, but the Republicans argued vociferously and with a straight face. The bottom line is that they don't care what Obama thinks; they don't care what the majority of the American people want. They are out only to please their constituency - southern whites - who take pride and pleasure in denying a black President anything he might want. And besides they are in the pockets of corporate America, who benefited from the policies of the Bush administration, whose interests it served. Corporate America probably would be against anything that Obama and the Democrats wanted to do despite their ostensible control of both the legislative and executive branches of government.

Republican members of the House voted among themselves to vote as a block in opposing Obama's Recovery and Reinvestment plan even before Obama, in an attempt at bipartisanship, went to the House to talk to them about it! Long story short: there is no reciprocal bipartisanship coming from Republicans. So how long will Obama play "nice guy" to the Republicans' "screw you" attitiude? He shouldn't be under any illusions that Republicans in the House and Senate want to do what's right or help him out or help out the American people even in the face of the worst financial crisis since the Great Depression. Therefore, he needs to come up with a Plan B - what to do if the Republicans try to block every piece of legislation he proposes. Otherwise, Obama will simply spin his wheels for two years and become an irrelevancy. Their only possible way out of this dilemma is to attack the filibuster rule itself using the nuclear option. This is a way around the filibuster rule that the Republicans themselves proposed using recently but in the final denouement didn't have to. Obama needs to get tough. The Republicans are going to give him nothing. They will pressure him - like they did Clinton - to "triangulate," to accept bills which are watered down and adhere more to Republican philosophy than to that of the Democrats.

The Republicans have controlled government for 30 years with the exception of Clinton who governed as Republican "light," and the Repubs are bound and determined to turn Obama into another Clinton. Obama seems like the typical nice guy Democrat who is eager to please the Repubs and they are eager to force him to please them, to show him who is top dog. In other words the Republicans will try to make Obama their bitch, to boss him around using all their stratagems and perfidy. Obama better get wise to the Repubs quickly or he doesn't have a chance. What is his Plan B? Just trying to please Republicans by watering down his bills so they are indistinguishable from the legislative tripe that has come out of Washington for the last 30 years? He needs to put the Repubs in their place. If not now, when? They don't represent the interests of the American people, not even of the southern American people who vote against their own interests because Rush Limbaugh tells them that's what they should do.

Obama better get it together. This is going to be a fight every step of the way. The Republicans will give him nothing. They will not compromise except after he has given them everything they want and has done what's acceptable to corporate America and their lobbyists. This is a fight for the heart and soul of the Democratic party and for the heart and soul of America. If Obama can't govern as he wants to, as a majority of Americans want him to, as the experts on economic policy want him to, with majorities in both the House and Senate, then America is lost, and we're at the mercy of the Republicans and corporate America, and the USA will become a full blown third world fascist country.

Get Ready to Rumble: The Fight for the Next Economy Begins

Robert Borosage writes the following on Huffington Post:

We are headed into the most ambitious era of progressive economic reform since the New Deal. The crisis leaves little alternative, as job losses mount across the country and the world. The Obama administration has hit the ground running, pushing to pass an $800 billion plus recovery plan, scrambling to put together a new plan for banks still on life support, and cobbling together an initiative to help millions of families on the verge of losing their homes.

But recovery, however daunting, is not enough. Even as the administration struggles to fend off a full-scale depression, it faces the task of constructing the foundations of the new economy out of the ashes of the old.

Republicans, still grousing about more tax cuts and less spending, are clueless. But even many Democrats seem to assume that if we just get the economy going, bail out the banks, add a dash of regulation, we can go back to business as usual.

But that is neither possible nor desirable. That old economy was founded on stagnant incomes and unsustainable debt. Families struggled to keep their heads above water by taking money out of their homes and assuming ever higher levels of student, car, credit card and consumer loans. The country served as the consumer of last resort for the world by borrowing staggering sums -- $2 billion a day over the last years - from creditors abroad, largely Japanese and Chinese central bankers. That economy was floated on asset bubbles like that in housing which has now exploded in our faces. We can't resuscitate the old economy - and should not want to.

The next economy must seek to provide a sustainable and a widely shared prosperity, one where the American dream remains in reach for working people. That will require new thinking and bold reforms. A group of progressive organizations have joined together to kick off this discussion. (For the first conference on "thinking big, thinking forward -- already oversubscribed -- go here.)

But many of the changes needed are clear -- and the initial struggles over signature reforms are already teed up.

What is needed to insure to every person a job with a decent wage, a world class public education, affordable health care, and retirement with dignity? This is the pledge Franklin Roosevelt made when he laid out his Economic Bill of Rights in the midst of World War II. It was echoed in Obama's inaugural address. Surely that new economy must include:

1. A new public social compact -- affordable health care, pensions above Social Security -- to replace the promises that the corporations have shredded. The signature fight over health care reform will begin this year..

2. Sustained public investment in areas vital to a maintaining a high wage path in a global economy -- world class schools, affordable college, 21st century infrastructure, cutting edge science, research and development. The first volleys of the signature battle -- over whether we will sustain expanded public investment after the economy regains its footing or short-change it --are already being exchanged.

3. A new global economic strategy -- featuring a new industrial policy -- that enables the US to balance its trade, while creating global rules that protect workers, consumers and the environment, rather than threaten them. The initial struggle over making the transition to renewable energy the centerpiece of economic reform is beginning.

4. Restructuring and regulation of the financial sector, making banking a boring occupation again, devoted to making loans to the real economy, not hawking exotic instruments in operatic speculative ventures. The signature reform -- taking over and breaking up the major banks that are on life support -- is likely to be fought out in the next months.

5. An aggressive wage policy that empowers workers to organize and bargain collectively, raises the minimum wage, and mandates basic benefits and safety standards. The donnybrook will begin this Spring over the Employee Free Choice Act.

These are fundamental choices threatening entrenched interests. Health care reform requires taking on the drug and insurance companies. Sustaining public investment requires defeating the military lobby and the wealthy whose taxes will rise. A new global strategy challenges the multinationals that profit from the old order. Getting Wall Street under control threatens the largest political donors. The business lobby promises Armageddon if the Employee Free Choice Act moves forward.

President Obama has already signaled his intention to go forward with the core reforms in this agenda. So forget about a new era of bipartisan consensus and get ready to rumble. We're headed into pitched battles that will succeed only with massive popular mobilization. We won't have this opportunity again, and we dare not blow it.

Robert Reich Blog Assaulted By Right Wing Spam Botters and Dittoheads

Robert Reich has been forced to shut down the comments section of his popular blog due to an infestation of personal and vicious attacks by dittohead spam bots. Reich's blog had an unusually liberal policy towards commenters. One need not register and could sign in as simply "anonymous." Evidently, large numbers of Michelle Malkin, Sean Hannity and Rush Limbaugh supporters did just that and unleashed a barrage of personal insults, vicious threats and anti-semitic attacks on Reich, former Labor Secretary in the Clinton administration. Reich drew right wing anger in a blog post entitled "The Stimulus: How to Create Jobs Without Them All Going to Skilled Professionals and White Male Construction Workers" on January 8, 2009. He also testified before Congress along the same lines and this has showed up on the web as a YouTube video, edited so as to suggest that Reich was excluding white male construction workers.

As Reich has pointed out, he was nor excluding white male construction workers, just advocating the inclusion of women and minorities, but this has been totally distorted by the right wing media. Media Matters points out the following:

Michelle Malkin, Rush Limbaugh, and Sean Hannity have falsely asserted or suggested that Robert Reich, speaking at a congressional forum, proposed that jobs created by the economic stimulus package should exclude white males. In fact, Reich has repeatedly stated that he favors a stimulus plan that "includ[es] women and minorities, and the long-term unemployed" in addition to skilled professionals and white male construction workers, not one that is solely limited to them. On January 22 and January 23, Michelle Malkin, Rush Limbaugh, and Sean Hannity falsely asserted or suggested that former Labor Secretary and Obama economic adviser Robert Reich, speaking at a congressional forum, proposed that jobs created by the economic stimulus package should exclude white males. In fact, while addressing concerns from women's advocacy groups and others about the composition of the proposed stimulus, Reich said then and has repeatedly stated that he favors a stimulus plan that "includ[es] women and minorities, and the long-term unemployed" in addition to skilled professionals and white male construction workers, not one that is limited to women and minorities. During the January 22 edition of Fox News' America's Newsroom, Fox News contributor and syndicated columnist Michelle Malkin claimed that Reich proposed that "the stimulus funds should not go to white male contractors." During the January 22 broadcast of his nationally syndicated radio show, Rush Limbaugh claimed that Reich "doesn't want it to go to white construction workers," while on his January 23 show, he stated: "And by the way, we're dedicating today's program to white construction workers -- the white construction workers that we learned yesterday Robert B. Reich said he doesn't want to receive any of the bailout money to hire infrastructure workers." And on the January 22 edition of Fox News' Hannity, host Sean Hannity claimed that Reich "expressed concern that the current [stimulus] package is, well, too inclusive." After airing a clip of Reich's testimony, Hannity stated: "Now here I thought the package was intended for everybody. So aren't pink slips color blind?" During his January 9 appearance (of which Limbaugh and Hannity aired portions) before the House Democratic Caucus Steering and Policy Committee Forum on the economic recovery plan, Reich did not suggest excluding white males from employment programs as part of the stimulus package. Rather, he emphasized including minorities, women, and the chronically unemployed. During the hearing, Reich stated that the jobs created should not "simply go to high-skilled people who are already professionals or to white male construction workers." Reich continued: "I have nothing against white male construction workers. I'm just saying that there are a lot of other people who have needs as well. And therefore, in my remarks I have suggested to you, and I'm certainly happy to talk about it more, ways in which the money can be -- criteria can be set so that the money does go to others: the long-term unemployed, minorities, women, people who are not necessarily construction workers or high-skilled professionals."

Now whether there were a number of anonymous dittoheads making these personal attacks on Reich or one dedicated dittohead sitting at his computer 24/7, it's impossible to tell. What is evident is that they have been successful in shutting down the commenters on Reich's blog of which I am one. There are a number of people who regularly comment there including Art a Layman, Linda, Lauren, Angry Citizen, Jordan, BMW, Silverfox, Frank Thomas, Michael, Under the Radar and many others who hang out there on a daily basis. These commenters and others have voiced a large number of constructive comments and opinions regarding Reich's topic of the day and extending well beyond. Typically, each Reich post is followed by 100 or more comments. A recent post was followed by over 300 comments, but a lot of them were the dittohead spam botters making personal attacks on Reich's ethnicity and distorting the words and meaning of what he had said. Some jaw dropping commenters also made attacks on his height and called him derogatory, disparaging and demeaning names. It seems that there were no limits to their hate filled vitriol. Respectful conservative comments were always acceptable on Reich's blog, but these attacks reached a new low for anything seen in public equivalent to graffiti seen on shopkeeper's walls after Chrystal Nacht in Nazi Germany. And it was all done anonymously, of course.

Robert Reich, at least for the time being, has closed comments on his blog. Whether he will reopen them again under different circumstances remains to be seen. I don't know whether the Blogger.com software he uses allows him to require that commenters log in non-anonymously, but this would cut down on the scurrilous, spurious, gratuitous, hateful, anti-semitic personal attacks. Of course, Reich can go through and delete these offensive comments one at a time, but that takes time and energy and could be almost a full time job. Reich has other obligations and by the time he goes through the comments some of them have stood openly for hours before being deleted. That's the dilemma.

On January 24, 2009 Reich posted "An Open Letter to Rush Limbaugh, Sean Hannity, and Michelle Malkin" in which he wrote the following:

In a time like this, when tempers are riding high and many Americans are close to panic about their jobs and finances, you have a special responsibility to consider the accuracy of what you say and the consequences of inflammatory and erroneous statements. In the last few days, manifestly distorting my words and pulling them out of context, you have accused me of wanting to exclude white males from jobs generated by the stimulus package. Anyone who takes a moment to examine what I actually said and wrote knows this to be an absurd misrepresentation of my position (see this). My goal is and has always been to create as many opportunities for as wide a group as possible, and not exclude anyone from access. There is and has never been any ambiguity about this. The hate mail I have received since your broadcast suggests that the mischievous consequences of your demagoguery are potentially dangerous, in addition to being destructive of rational and constructive political discourse. I urge you to take responsibility for your words. Words and ideas have real world consequences, and you have demonstrated a cavalier disregard for both.

I hope Robert Reich can find a way to continue his blog in the open way that he has done so far while finding a way to eliminate obnoxious comments in real time. For the many regular commenters who have posted there including this blogger, the closing of comments to the public is a real loss.

Three Possible Outcomes for the Economic Crisis

What will the economy and US society in general look like once the economic crisis is over? Will there be major demographic changes or will the US go back to business as usual before the crisis? In my view there are three possible outcomes at least. Maybe more. Here they are:

1) The Neocon preferred outcome. Trickle down economics similar to what obtained before the crisis set in. This is the unfettered capitalism and free trade model as espoused by Milton Friedman and Alan Goldspan. Also known as Reaganomics. Basically, it consists of a very small public sphere with everything privatized to the max. No or a very small safety net. Jobs available would include only those that can't be outsourced at very low wages as workers would have to compete with illegal immigrants and H1-b green card workers from abroad. There would be no such thing as a living wage and the minimum wage would be less than adequate. The homeless population would increase to 10% of the population as surplus workers are shed and those working at the bottom of the income scale can't afford an apartment or have such poor credit scores that no one will rent to them. Another 10-20% would be unemployed or underemployed. People with college educations would be driving cabs and working at Starbucks. They would be able to afford an apartment but not much else. The middle class would consist of most of the rest of the population who would best be described as debtor/consumers. They would be loaded down with student loan, auto loan, mortgage and credit card debt, paying high interest, having a decent lifestyle but never able to get out of debt. 10% of the population would be upper class with a comfortable lifestyle in which their assets exceeded their debts with the upper 1% owning 90% of the wealth and getting 90% of the income.

Essentially, 5-10% would be added to the homeless underclass and the middle class would work twice as hard at underperforming jobs relative to their educational level barely keeping their heads above water. The political system would be controlled by the upper class through their corporations and lobbyists. Taxes on the upper class would be low and the tax burden would fall mainly on the poor and middle class.

2) Socialism 101. In this scenario the distribution of wealth would be essentially the same as in the neocon preferred outcome. However, government would play a more activist role in providing for the homeless and the poor. Taxation would provide housing and food assistance to the poor and unemployed. About 10% would be homeless with another 20% unemployed. Government would provide trickle down benefits to keep people off the streets and prevent rioting. The safety net would be strengthened. In light of the fact that there weren't enough jobs available to keep everyone employed, 30% of the population would be permanently unemployed but living barely comfortably on the dole. Taxes would be high on the remaining workers to pay for their brethren without jobs.

Robotization, automation and computerization would make the manufacturing process highly productive and efficient without the need for much human labor. In addition outsourcing and insourcing would guarantee that those working would be paid the lowest possible wages. Small business people could find a niche here and there and do pretty well but the vast majority of workers would be wage slaves in debt their whole lives and whose largest purchase over the course of their lifetimes would be interest on their debt, not their homes. This would guarantee a large flowing income stream to the upper classes who are their creditors.

So Socialism 101 is basically what might be called fettered capitalism which is unfettered capitalism with a large safety net to support those permanently unemployed and homeless at the bottom of the pyramid. There would be a large contraction of good paying jobs, but those lucky enough to be employed would still enjoy a high consumption, high indebtedness lifestyle.

3) Socialism 201. In this scenario government takes a more activist role in job creation to make up for the fact that the private sector cannot produce enough jobs to sustain anything near full employment. In addition a large safety net with universal health care is provided. The work week is lowered to 30 hours so that the private sector is forced to spread the available work around to a larger percentage of the population. In addition there is a large public sector which provides even more jobs. Social structures are set up to create and fill additional positions so that there is essentially full employment with government taking on the role of creating and sustaining jobs that the private sector is incapable of creating. Those who can't work would be provided for with a generous safety net consisting of food and housing assistance so that no one would go hungry or be forced to live on the streets.

Progressive taxation would insure that money was continually recycled from rich to poor in order to keep the economy from getting stagnant with resources pooling at the top. Since major manufacturing production is performed by computers, automatons and robots, there would not be a great need for workers in manufacturing so available work is spread around and people would enjoy much more leisure time. Income is essentially decoupled from the ability to hold a job although every effort is made by society to find something productive to do for every citizen. So in contrast with Socialism 101 there are a minimum number of people "on the dole." Everyone has a stake in the world of work. The benefits of computerization, automation and robotization are extended to society as a whole instead of remaining in the hands of a few owners and large corporations. As the private sector shrinks, the public sector expands. Every one has a decent lifestyle with public education from pre-school through college, universal health care and food and housing assistance if needed. The private sector would be encouraged to provide as many good paying jobs as possible, but the government would be in a position to step in and take up the slack if the private sector falls short. Not all of these jobs need be created in the public sector. Government can contract with private sector contractors to create jobs in the private sector as well. So government can be used to ensure that everyone who wants one can have a job and fulfill those needs when the private sector falls short.

Government is the money recycler of last resort preventing stagnation and the formation of large capital pools that have little or negative economic purpose. Money should be in constant motion either providing income for workers or investment in productive enterprise. Money that stagnates in private capital pools has little productive value. In Socialism 201 those who create jobs and enterprises that are innovative and create consumer demand or add value to society will be well rewarded for their efforts. They just won't ever be in a position to dominate the society in such a way as to continually siphon off and pool wealth which then is neither invested productively or returned to society in the form of consumption. Pooled wealth contributes to the financialization of society with money chasing returns on money instead of being invested for productive purposes. Too much wealth in private hands leads to the few controlling government through campaign contributions and lobbying on the one hand and advertising on the other. Advertising leads to compliant consumers who go into debt to support a lifestyle they imagine other consumers to be enjoying. Instead education should focus on living a healthy lifestyle with intelligent consumption not dictated by TV advertising.

Democracy is impossible when the rich control the political process. Therefore, government should oversee the economy in such a way that all segments of the income spectrum receive similar gains. Recently most gains have gone to the upper 10% while incomes of the lower and middle portions of the spectrum have remained stagnant or even lost ground. This has led to a situation in which the upper classes have had far more income than they can possibly spend or invest in productive enterprises. Instead they use this income and accumulated wealth to control the political process itself and use it to accumulate even more wealth. If this goes on indefinitely, democracy will become impossible and plutocracy and eventually aristocracy will result. A large corporation that spawns billionaires and remains in the hands of one family virtually guarantees that that family will remain wealthy for many generations and, by definition, will form an emerging aristocracy. Accumulated wealth can be passively invested to generate more wealth while corporate sales represent an active component for even more wealth generation. As robotization and computerization proceed apace, a corporation can continue to function with fewer and fewer employees thereby driving profits higher and higher while contributing less and less to the general economy. One way a corporation contributes to the general economy is the creation and provision of jobs. But higher profits are obtained by operating with fewer employees. Therefore, a corporation's bottom line is enhanced the more it finds ways of destroying jobs. It does this by automating the manufacturing process, outsourcing and insourcing.

Take chip maker Qualcomm, for example. Founded by Irwin M. Jacobs, this corporation has a "patent wall" with hundreds of patents. So it makes money off of intellectual capital. In other words other companies pay Qualcomm just to utilize their patented technoligies. Irwin Jacobs is a billionaire and now retired as CEO. But his son Paul is now the CEO and another son is a division head. Thus Qualcomm remains firmly in the control of one family. In addition the chips that Qualcomm itself manufactures are made in a highly roboticized and automated process, hence there is little need for manufacturing workers at all. In addition Qualcomm workers, as is the present trend, are not unionized giving them little say in the goings on of the corporation. So Qualcomm is a model of the information age economy in which there is little need for manufacturing workers, there is essentially one family control and there is world wide market penetration. Therefore, money pools in one family and will probably accumulate for generations based on intellectual capital and roboticization of the manufacturing process.

The only way to make up for the capital pooling that corporations like Qualcomm represent is to unionize its employees so that they can demand a bigger piece of the pie or to tax their profits and accumulated wealth and distribute this money in one form or other to workers who have been effectively displaced by the automation of the manufacturing process. The chances of unionization are small; therefore, Qualcomm, like many other major corporations, needs to be taxed so that money doesn't pool and stagnate in the hands of a few rich people. Reducing the work week by government fiat would also tend to spread the available jobs to more parties. The Jacobs family is an example of one family that is likely to form part of a permanent aristocracy due to incredible wealth accumulation.

Of course, Microsoft is another example of a corporation that has resulted in vast accumulated wealth for Bill Gates and his family. The Gates Foundation, however, is engaged in colossal philanthropic projects to improve the health and education of many of the world's poorest people and this is laudable indeed. If all corporations recycled their wealth in this manner, maybe there would be no need for government to step in to perform this function. There is no reason that government cannot cooperate with private charity and philanthropic pursuits in a synergistic way to accomplish the goals of wealth redistribution and safety net provision. However, many corporations simply are not interested in doing so. Many CEOs are only interested in lining their own pockets. And a lot of wealthy people give money primarily only to arts organizations for which they are recognized by getting their names on plaques and their pictures on walls and not to organizations supporting the poor where such recognition is meaningless. While this may be laudable to some, it chiefly goes to enrich arts administrators and support enterprises that otherwise would fail if they had to make a profit in the commercial environment. Certainly supporting the arts is laudable to some extent. It is, however, not fundamental to curing the world's ills as the efforts of the Gates Foundation have been. And it's mainly an ego trip for the donors. After all getting your name on a plaque at the local homeless shelter just does not garner the same prestige.

Water is a Human Right!

Published on Thursday, January 22, 2009 by The San Francisco Chronicle

Water is a Human Right

by Maude Barlow

In a world running out of clean, accessible water, the question of who decides its allocation is crucial. Is access to water a human right or just a need? Is water a common good like air or a commodity like Coca-Cola? Who is being given the right or the power to turn on or off the tap - the people, governments or the invisible hand of the market? Who sets the price of water for a poor district in Manila or La Paz - the locally elected water board or the CEO of a big water corporation?

This is an important and controversial issue. A U.N. covenant would put nation-states on notice that it is their responsibility to provide clean water to their citizens. People have the right to demand safe, clean drinking water publicly delivered by their governments on a not-for-profit basis as a basic human right. The World Bank and the United Nations must make it a priority to build and support robust public institutions that guarantee water for all.

I have studied the history of for-profit water delivery in the Southern Hemisphere, which was imposed by the World Bank as a condition of funding, and the record is clear: Privatized water delivery results in high water rates, worker layoffs, decreased services, reduced water quality and water cutoffs to untold millions. Even the best private water companies must cut corners and use profits to pay dividends to their investors rather than investing in improved facilities.

Perhaps the greatest indictment of commercializing water delivery is the fact that, anticipating that the private sector would bring new investments for water services in poor countries, the lending banks and wealthy country donor agencies decreased their funding for water projects between 1998 and 2002 - a time when the need for services and aid in the global South exponentially grew.

This is not to say that there have not been public sector failures to provide clean water. There have. But governments are accountable to their citizens and can be changed.

Nor is this to suggest there is no place for the private sector in helping to find solutions to the global water crisis. Business has an important role in laying pipes, building infrastructure and cleaning and recycling dirty water. There is a huge role for the private sector in developing innovative technologies to save and clean water as well. I am particularly excited about innovations that apply biological science to technology - harnessing the power and processes of nature to transform toxic and industrial waste into clean water and even fuel - and the commitment of some businesses of reducing their water use.

However, the private sector must not be allowed to set water policy nor should the market determine who gets access to it. Corporate control of water would see water go to those who can buy it, not to those who need it. It would also encourage the plunder of water from nature, already a terrible problem. It would discourage conservation and source protection, arguably the first step in protecting the world's diminishing water supplies.

What we need now are guiding principles that set priorities for water. Water is a public trust that belongs to the Earth and all species. It is a basic human right. Yes, there is a commercial dimension to water. But the only possible path to a water secure future is based on the twin foundations of conservation and justice. All water use, public and private, must now serve these goals.

© 2009 The San Francisco Chronicle

Maude Barlow chairs the board of Food and Water Watch and is the senior adviser on water to the president of the U.N. General Assembly. Her new book is "Blue Covenant, The Global Water Crisis and the Coming Battle For the Right to Water" (McClelland & Stewart, 2007).

Bush to Fill His Coffers on Rubber Chicken Circuit

Even though he has been described as "the worst President in US history," ex-President Bush is looking forward to making $100,000 to $250,000 a pop on the speaking circuit, and guess what, he probably won't even be writing his own speeches. In a continuation of his Presidency some speechwriter will plop a speech in front of him and he will read it to eager businessmen who will devour every word and gladly repay him for all he did to make businesses more profitable at the expense of the environment and everything else. Instead of slinking away into well-deserved ignominy, Bush will handsomely profit from his years in the Presidency doing everything he could to profit the corporate class. He will receive his well-deserved reward - in their eyes - and be touted and feted at a rate far exceeding any mere revolving door lobbyists or former administration officials. Instead of being put on trial for war crimes and the destruction of the Constitution, Bush will make millions by cashing in - millions in ill-gotten gains. So, you see, crime really does pay. Ditto for incompetence. Surely, we live in a sick and twisted world when crass war criminals can profit from their perfidy and noxiousness.

The following is entitled War Crimes for Bush? Try Fat Fees on the Speaking Circuit by Jordan Smith:

He's the most loathed political figure since the advent of public opinion polling, but Bush is set to rake in big bucks on the rubber-chicken circuit. He started two disastrous wars that have left millions dead or displaced, sat by while a major American city was destroyed, oversaw the evaporation of trillions of dollars in wealth and will leave office as one of the most loathed figures in American history. One would expect a man like George W. Bush -- one who has single-handedly destroyed America's image in the world -- to slink off into well-deserved ignominy. But there's little chance of that. Instead, he's poised to line his pockets on the lecture circuit, a man who's led a famously unexamined life ready to pontificate about world events for fat fees. He crassly told journalist Robert Draper that his chief post-presidential intention is to "give some speeches, just to replenish the ol' coffers." Other members of his disastrous administration are already "replenishing" their coffers. Of course, Bush's coffers are not what most would consider depleted; he's leaving office with assets valued somewhere between $8 million and $20 million. But once he embarks on the lecture circuit, he'll be able to augment that fortune considerably. Bush will be able to command between $100,000 and $150,000 per speech, says Lourdes Swarts, president of 21st Century Speakers, a prominent speaking agency. For talks to overseas audiences, the figure rises to something closer to a quarter-million dollars. "The speaking market is wide and expands to overseas audiences," says Swarts. Mark Updegrove, author of the 2006 book Second Acts: Presidential Lives and Legacies After the White House, says Bush will be a huge draw. "There is no shortage of organizations willing to pay for the prestige of the presidency, regardless of how controversial a president is," he said. Swarts agrees: "President Bush will be very popular," she said. But President Bush is not very popular with the American people, raising the question of who will be willing to pay him the extravagant sums he'll demand. Fortunately for him, the groups he has enriched during his eight disastrous years in the White House remain committed to him. "Keep in mind that in the corporate world, the president has an 80 percent approval rate, and they are the ones that will hire or fire a speaker," says Swarts. Many of the groups that hire former presidents are business organizations, and they can be counted on to keep Bush in high demand on the lecture circuit. There are also a few countries in which he remains popular in -- popular destinations like Albania, the Philippines and Tanzania.  Lest anyone doubt Bush's prospective popularity as a speaker, former members of his administration provide correction. Ari Fleischer, the former White House spokesman who infamously warned Americans to "be careful what they said" following the 9/11 attacks, commands $15,000 to $25,000 per event. Interested parties can choose between two standard speeches. In the first, "America and Israel: The path to Stability in the Middle East," listeners can hear Fleischer "take sides" in the conflict; he "credits Israel as the only democracy in the Middle East and notes the sacrifices they have made for peace. He asks where the moderate Arabs are, and he's sharply critical of the Palestinian leadership's failure to confront terror." There is no mention, apparently, of Bush's promise of a Palestinian state. Alberto Gonzalez, the former attorney general who was forced to resign in disgrace for his role in the U.S. attorneys scandal, commands over $25,000 a pop to speak to like-minded audiences. His listing on the Greater Talent Network's Web site understatedly describes him as someone who "played a vital role in the administration's fight in the war on terror and addressing the changing role of the Department of Justice post 9/11."  Other administration officials also grab sizable speaking fees. John Ashcroft gets $25,000. Donald Rumsfeld gets $65,000 and is very popular. Karl Rove gets $50,000 and pimps himself out more aggressively than most. His Web site features dozens of testimonials from satisfied customers, mostly business groups. "I think I can honestly say I have never met a more dynamic and gracious person," says Ballard W. Cassady, Jr., of the Kentucky Bankers Association. "I don't think we could have had a better closing speaker than Karl. The attendees were almost unanimously enthralled throughout his entire presentation and pleasantly surprised at how funny and personable he was," reports the National Association of Convenience Stores. "Karl Rove has a one-of-a-kind political mind and a biting wit. Both were on full display when he spoke for our recent luncheon. An enthusiastic Dallas crowd laughed along as they learned from his insight, then they gave him a standing ovation," gushes the president of the National Center for Policy Analysis, the conservative think tank.  All of this is in keeping with a gradual shift in how presidents comport themselves following their departure from the highest office. When Harry Truman left the White House in 1953, he was still surviving off his Army pension of $112.26 per month, and he had to take out a loan at Washington's national bank in his last weeks as president to get him through. He turned down numerous offers from organizations for easy jobs paying over $100,000 per year, and he never accepted consulting fees. He even turned down a free Toyota offered by the company as a demonstration of good relations between Japan and America. According to David McCullough's book Truman, "His only intention, as he said, was to do nothing -- accept no position, lend his name to no organization or transaction -- that would exploit or 'commercialize' the prestige and dignity of the office of the president."  Well, goodbye to all that. Presidents following Truman have had much less compunction about profiting from their time leading the most powerful nation on earth. Eisenhower was a paid TV news commentator during political party conventions, says Updegrove. "But it was still not very common for presidents to make money off the office until Gerald Ford joined the boards of several corporations," he says. Ford was roundly criticized for his actions at the time, although they seem positively dignified by today's standards. He signed on with American Express, Texas Commerce Bank, 20th Century Fox Film Corp. and others. All told, he netted more than a million dollars in supplemental income from these corporations, but Ford dismissed his critics, saying, "it's nobody's business, because I'm a private citizen now." Subsequent presidents have agreed. Ronald Reagan was heavily criticized for making commercials for Japanese companies, although Jimmy Carter had done much the same thing, according to Updegrove. George H.W. Bush was really the innovator in realizing the great wealth that could be amassed simply by talking. He left office in 1992 as a mildly popular one-term president after losing an election with the lowest percentage of the vote for any major candidate since William Howard Taft in 1912. But as recently as 2004, Bush the elder was reportedly paid more than $100,000 for giving speeches in China. "I don't know what my dad gets -- it's more than 50-, 75- thousand dollars a speech," the current president told Draper.  Bush also noted to Draper that "[Bill] Clinton's making a lot of money." Indeed, he is. After leaving office at age 54 in 2001 with approximately $12 million in legal debts, the former president made at least $40 million in speaking fees. The minimum fee was $100,000, but he got up to $400,000 for some speeches.  Clinton left office as a highly popular president, however. His 65 percent approval rating at the time of departure was the best for any president since Franklin D. Roosevelt, and he was even more popular abroad than at home. Bush, on the other hand, will be leaving office more unpopular -- and for a longer period of time -- than any president in the history of American polling. Even without his family's massive wealth, Bush would never be destitute. Since the Truman era, Congress has given former presidents a pension adequate for a comfortable retirement. Bush will receive $186,000 a year, in addition to travel funds, mailing privileges, Secret Service protection, office space, staff and transition expenses.

Arrow's Impossibility Theorem Doesn't Apply to Economics Case

Social Choice is a field that studies how to make choices that apply to the whole society based on individual preferences. Here is an example which contradicts Arrow's Impossibility Theorem which claims that social choices are impossible.

 

Consider Arrow’s example on p. 27 of  Social Choice and Individual Values where he shows a deficiency of the Borda count:

“CONDITION 3: Let R₁, •• " R_n and R/, .. " R_n^' be two sets of individual orderings and let C(S) and C'(S) be the corresponding social choice func­tions. If, for all individuals i and all x and y in a given environment S, x R_i Y if and only if x R/ y, then C(S) and C'(S) are the same (independ­ence of irrelevant alternatives).

The reasonableness of this condition can be seen by consideration of the possible results in a method of choice which does not satisfy Condi­tion 3, the rank-order method of voting frequently used in clubs. With a finite number of candidates, let each individual rank all the candidates, i.e., designate his first-choice candidate, second-choice candidate, etc. Let preassigned weights be given to the first, second, etc., choices, the higher weight to the higher choice, and then let the candidate with the highest weighted sum of votes be elected. In particular, suppose that there are three voters and four candidates, x, y ,z, and w. Let the weights for the first, second, third, and fourth choices be 4, 3, 2, and 1, respectively. Suppose that individuals 1 and 2 rank the candidates in the order x, y, z and w, while individual 3 ranks them in the order z, w, x, and y. Under the given electoral system, x is chosen. Then, certainly, if y is deleted from the ranks of the candidates, the system applied to the remaining candidates should yield the same result, espe­cially since, in this case, y is inferior to x according to the tastes of every individual; but, if y is in fact deleted, the indicated. electoral system would yield a tie between x and z.”

 

However, if you use a corresponding economic example, there is no such problem.

Let x be 1 unit of work eg 1 hour at task X.

Let y be 1 unit of work eg 1 hour at task Y.

Let  z be 1 unit of work eg 1 hour at task Z.

Let w be 1 unit of work eg 1 hour at task W.

Let’s stipulate that each individual must work the same number of hours.

The general idea is to assign the tasks in such a way as to maximize social utility where utility is defined as sum over individual utilities and individual utility is defined as 4 x (time spent on most preferred task) + 3 x (time spent on second most preferred task) etc. ^ie a general Borda ranking. Let individuals 1 and 2 have the preference ranking xyzw and individual 3 have the ranking zwxy.

Since 1 and 2 have the same preferences, we let them spend half their time on their first preference x and half their time on their second preference y. Let 3 do z since it’s his first choice. That leaves w. Let each individual do one third of w. Then the individual utility for 1 and 2 is (½)x4 + (½)x3 + (1/3)x(1) = 3 and (5/6). The individual utility for 3 is 4x1 + 3(1/3) = 5. Social utility is 12 and (2/3). The maximum possible utility is 16.

Now, if task y is deleted as in Arrow’s example, we have the preferences for 1 and 2 as xzw and 3 as zwx. Now let 1 and 2 each do (½)x and (½)w and 3 do all of z. Each person does 1 hour of work. Total possible utility = 12. For 1 and 2, utility = (1/2)x3 + (1/2)x1 = 2.Utility for 3 = 3. Total utility = 7. Alternatively, let 1 and 2 do (½)x and (1/4)w and (1/4)z. Utility = 3x(1/2) + 2x(1/4) + 1x(1/4) = 9/4 = 2 and (1/4). Let 3 do (1/2)z and (1/2)w. Utility = 3x(1/2) + 2x(1/2) = 5/2 = 2 and ½. Total utility = 7.

The  point is that eliminating y does not upset  the work schedules in the same way that it upsets political  rankings because the work can be divided among the workers in many possible ways. Hence Arrow’s Impossibility Theorem doesn’t apply. See Social Choice and Beyond for more.

 

Protect People Not Financial Institutions!

This is in response to a post on Robert Reich's blog:

It still seems like a lot of hocus-pocus moving money around from one entity to another, moving assets around from A to B, injecting money here and there. Nothing has been said about all the trillions of dollars of derivatives and casino like bets that are affecting this whole triage. Are they still trying to cover all these bets? All the credit default swaps?

They should just nationalize the Fed and get it over with. If capitalism is dead as  Michael suggests, why not just build a new system from the ground up while using government money  to protect people instead of institutions. The whole system needs to be stripped of all the fancy schmanmcy stuff like short selling (oh, please don't take away my short selling), puts, calls, options, credit default swaps, collateralized debt obligations, asset backed securities and all the rest. Take away the damn casino. We need to get back to an economic system that people understand. We need to get back to an economic system that Congress understands.

We rely on financial wizards and gurus like Paulson and Bernanke who hide behind a veil of secrecy because not even they understand what's going on. Like the wizard of Oz, their non-transparancy protects their ignorance.

It's not a question of capitalism vs socialism. It's a question of an economic system that works. The Chinese are way ahead of us because they saw that pure communism didn't work and made adjustments that incorporated SOME capitalistic components. Now their system seems to be working quite well, thank you. We, on the other hand, have never admitted that pure capitalism doesn't work and made adjustments by incorporating socialistic elements to come up with a working system. THAT'S PRAGMATISM FOR YOU.

Note to Obama: forget about protecting financial institutions. Protect people instead. Foreclosure protection to keep people in their houses. Food assistance so people don't go hungry. Unemployment protection for those losing jobs. You might do better rebuilding the system from the ground up rather than trying to salvage the institutions that are collapsing around your ears. Simplify. Get back to an economic system that you don't need a PhD to comprehend. Jobs based. Income based. Savings based. Safety nets. Health care for all.

Eliminate the incentives for making money off of money. Streamline the system. Ban offshore tax havens. Do the obvious. Start enhancing revenues to the Treasury. Nancy Pelosi is right. Start right now eliminating tax breaks for the rich. Start right now on a course to eventually balance the budget even while spending more to get the economy moving again. That means eliminating offshore tax havens and making the rich pay their share as they did in the Eisenhauer era. That means progressive taxation.

China has a succesful economic system precisely because it is simple. Their goal is for China to make money. The US goal is for the US to go into debt. How phenominally stupid! The US better start understanding that its goal should be to make money too while protecting its citizens. It's had its head where the sun don't shine for far too long!

Also posted as a comment on Robert Reich's blog.

Should Citibank Get Yet Another Bailout?

Robert Reich posted "Why Citi Turned Around on Mortgage Cramdowns" here.

So Citibank was losing $100 million a day in the fourth quarter? Amazing! I could live on a fraction of their daily losses for the rest of my life! Talk about a Tale of Two Cities. This is a Tale of Two Economies. Two totally different worlds. Two totally different tiers. The Economy of the Wealthy and the "real economy" of the middle class.

But I digress. The point is why and how is Citibank losing $100 million a day. Does anybody know?

This comment from Michael is apropos:

Yes we know some but not enough and the right question would seem to be---Where is the Transparency or answers to everyone's questions about what in the Sam hell is going on---Have we all just gone nuts??? Or, are we so frustrated by just about everything due to the "lack of facts" that we are now speculating? That seems to be what is happening!

What is the dynamic behind these losses? Until we decipher that, how can their be any rational or coherent response? I have seen no rational explanation as to what's going on. Paulson doesn't seem to have a clue either. There's no sense in just giving money to banks without understanding what's going on. That is the problem with the first TARP. They just gave the money in the hopes that the banks would do the right thing and loan it out and then were chagrined when the banks did what was in their self interest (M&A, hoarding, payouts to CEOs). We have to understand the dynamics first before another cent is given to banks.

My suspicion is that the lack of understanding and transparency --maybe transparancy would just reveal a lack of understanding -- just hide that what's really going on is not really a bailout of banks at all. After all they are only intermediaries. What's really going on is a bailout of investors. If that's the case, these bailouts need to stop. I say let the investors take their losses. After all they are probably never going to miss a meal even if they take their losses.

Taxpayer money should go to reviving the "real" economy not the financialized sector of the economy. If investors are not made whole because banks are not made whole, what's the worst that could happen? The wealthy would just become middle class, that's all. Is that so bad, that taxpayers should bail out the wealthy just so they can remain wealthy?

Some would say that there are pension funds and 401ks that provide for average Joes and not just the wealthy that need to be bailed out. Granted the world's largest pension fund, CalPERS, was speculating in the financial markets, leveraging their investments and engaging in all sorts of go-go finance. This has got to stop. They should only be investing conservatively if they are a pension fund. 401ks the same thing. I thought they had rules for mutual funds!? I don't think they are bailing out banks to prevent the downfall of pension funds. They are bailing out banks to prevent the downfall of speculators. And some of these speculators are foreigners even foreign sovereign wealth funds. I doubt if Norway's SWF is among them because they invest conservatively. What needs to be identified is exactly who would lose if the large banks were allowed to fail. And then perhaps some exceptions could be made for good causes. But I doubt if there are very many good causes. I suspect it's mainly the rich and powerful protecting the rich and powerful.

So I say let them fail!! They put their money at risk. They weren't guaran- teed by govern- ment that their risky invest- ments would not fail. There are serious problems with the parallel economy, the "real" economy, that need fixing. That's where any future bailout money should be focused. That's why I say TARP II should be all about -- and only about -- foreclosure remediation. All this BS about "moral hazard" is ridiculous. If some poor person gets bailed out, there's a hue and cry about moral hazard. If some wealthy investor gets bailed out, there's no such hue and cry. How come?

I'll say it again. CITIBANK SHOULD BE ALLOWED TO FAIL. CITIBANK SHOULD NOT GET ANOTHER CENT OF TAXPAYER BAILOUT MONEY. ANY TAXPAYER MONEY SHOULD ONLY BE USED TO GET THE "REAL ECONOMY" RUNNING AGAIN.

Now I can understand foreclosure remediation. I don't care if people were only trying to make a buck by flipping houses. We're quibbling over the little stuff while billionaires are being bailed out with no hue and cry about moral hazard. It's like people are all concerned about welfare cheats making off with $10,000. while Bernie Madoff made off with $50 billion!? Let's bail out the little cheats if we have to while not bailing out the big cheats.

I can understand foreclosure remediation. It's tangible. I can understand how solving the foreclosure crisis - even if we have to help some undeserving people - will benefit the economy as a whole. What I don't understand is how giving billions to banks is going to help the economy. Could someone please explain this? They've given banks trillions so far (TARP I plus what the Fed has given) and it has done adsolutely no good insofar as anyone can measure or even give a rationale for. Saying "the economy would be a lot worse now if that money had not been given to banks" is NO rationale.

Paulson and Bernanke don't know what they're doing, can't explain what they're doing and hide behind a veil of secrecy to protect their ignorance. I suspect what's really going on is another heist of taxpayer money on behalf of the wealthy and powerful - another example of the Shock Doctrine. After all in chaos they can steal, and that's what they have been doing for years. Hopefully, Obama will not be so bank-centric.

Also posted as a comment on Robert Reich's blog.

Bill Cosby's Book, "Come On, People" Calls for Black People to "Shape Up"

Bill Cosby, co-author Alvin Poussaint and an all black panel held forth on Meet the Press last Sunday about the plight of black people and what to do about it. The cause for this media exposure was their new book, Come On, People. Bill Cosby has long spoken up about the need for the black community to step up to the plate and take responsibility for the predicament of high school drop-outs, fatherless familes, high incarceration rates and the general malaise of black poverty. He has incurred the wrath of other black writers for having what they say is a blame the victim mentality. While many African-Americans have achieved a lot and accomplished noble goals, there is still a large segment of the black community that is unemployed and enmeshed in a cycle of poverty from which there seems to be no escape. This begs the question of who is responsible - black people themselves, as Cosby suggests, or the government for not doing more to alleviate the problems black people face.

Now Meet the Press did not include any whites on its panel with Cosby; I wonder why? It seems that race is such a sensitice subject that it can only be discussed among blacks by themselves. To include a white person in the discussion is tantamount to accusations of racism. As a white person myself, some blacks might feel I have no business commenting on the black community, their plights or problems. I disagree. First, I do consider myself a tangential member of the black community because my son-in-law is black and I have three black grandchildren. Or rather my grandchildren have African blood as well as European Caucasian blood - probably more of the latter than the former. They are part of a growing number of biracial Americans including the President of the US, Barack Obama himself. So I have a vested interest in the black community and its problems. I'm well aware of the high incarceration rate of black males, and I don't want my grandson to be included in that group when he grows up. I realize he has a greater chance of being incarcerated just because of his racial profile. My son-in-law has been guilty of the crime of driving while black. Similarly, I don't want my granddaughters to become teenage single Moms without any viable means of financial support except perhaps me.

Now to get to the more serious problems and their solution, I completely agree with Bill Cosby up to a point. Black people need to take responsibility for their own lives and decisions as individuals. Many black people have done so and climbed out of poverty by sheer acts of will and determination. There are many success stories and a growing number of prominent black Americans. But many are also left behind. I also believe government needs to extend a hand to those in need and those in need of a hand up. Government programs need not be targeted strictly for blacks or other racial minorities. They only need to be targeted towards the poor many of whom disproportionately are black. In fact poor whites need to be included too. This will diminish white resentfullness about being left out as they felt they were in affirmative action.

  Cosby is right about black culture in the sense that it seems to elevate pimps, drug dealers, thugs and gangstas making some blacks very rich as purveyors of such in music and movies. But this is part and parcel of the American cultural penchant in general for sex and violence. Criminals both black and white seem to be glorified by the mass media including TV and movies. How many TV shows are there devoted to criminals and how few shows are there of the wholesome type that Cosby's TV show was a prime example of? How many TV shows are devoted to people who do good deeds? So while black culture seems to glorify gangstas and pimps, white culture makes a big deal out of white criminals also. It's just that the white criminals can't sing or dance as well. Oh well, maybe that excludes Frank Sinatra who, while not being a criminal himself let me hasten to say, was reputed to be an associate of some less than savory characters as, I am sure, everyone who has performed in Las Vegas has been.

So I think parents of African-American or biracial children do need to be diligent to pick and choose what influences they want their children exposed to, who they want to hold up as role models, whose examples they want them to avoid following. As far as government help is concerned, the public school system is a good place to start. After all public school is a government program. Private school is not. Inner city schools that serve mainly blacks need to have the equivalent resources devoted to them as are devoted to public school in predominantly white suburbia. In fact since African-Americans have a legacy and history of less than equal treatment with whites, more resources should be devoted to communities with predominantly black citizens than to predominantly white communities to make up for the historical lack of opportunities and substandard treatment that blacks have received in the US. Slavery and Jim Crow are the American legacy that are still to some degree responsible for blacks being unable in many instances to pull themselves up by their own bootstraps. So they need a helping hand and even in some situations a temporary handout. The historically disadvantaged need to be compensated but in a way that allows them to get to the point of increased individual responsibility and not in such a way as to prolong dependency.

The high school drop-out rate is very high among African-Americans because many of them don't see the relevance of education and inculcation into white society as being particularly relevant to their life needs or prospects. This incentive structure needs to be changed. Young black males need to perceive that their interests are better served by being constructive members of society rather than by being pimps and drug dealers. If young blacks perceive that there are potentially greater rewards to be gained by being pimps and drug dealers, that crime is more likely to pay for them than constructive citizenhood, then they will opt for a life of crime. So Cosby is right that the thug and gangsta mentality is part of black culture and it is a part that many of his critics don't want to admit. It's also true that many blacks have become rich by purveying sick and twisted moral values to the culture at large including white youth who tend to not act it out as much while still identifying with it, probably because they have an inherent understanding that their opportunities far exceed those of the black community.

So the black public school experience needs to be not one of trying to inculcate them with white values, but one which is more tailored to the black experience and how to cope with living in a predominantly white or increasingly multi-racial society. In a few years whites will actually be in a minority in many parts of the country, and there will be more and more multi-ethnic children being born. Many black youth as well as many white youth have a revulsion against the prevailing white adult society. That needs to be taken into account. So school should include aspects that cater to the present and future needs of black children and youth.

School lunch and nutrition programs are important because a hungry child can't learn much. Vocational programs are important because many persons black and white alike are more talented using their hands than doing sedentary desk work. A value system in which college is the most respected outcome is not conducive to a value system that respects the dignity of all kinds of work. A respect for the roles of good parenthood and a provision of child care so young women can develop skills outside the home are important. In short education for blacks and whites alike needs to deal with real life situations facing young people and not just a lot of worthless bullshit the purpose of which is to inculcate everyone with the values of the white community.

And then meaningful jobs must be available so that there is more of an incentive to become a productive part of society than an outlaw. And by meaningful I don't mean bottom of the totem pole, dead end, minimum wage jobs at Wal-Mart. If private enterprise cannot supply them, then government has to step in and become the employer of last resort. Especially for those who have been incarcerated, jobs need to be provided or they will see crime as the only prospect. Second chances have to be given and supported. Minor drug offenses should not resuilt in prison time as they don't for most affluent white people.

In short, the black community does need affirmative action to make up for their historical disadvantages, but it has to be done in such a way as to increase the opportunities available for blacks while not diminishing the prospects for whites, to enlarge the pie not subdivide it into smaller pieces. And Cosby is right too. Black children have to be taught to believe in themselves, take responsibility for themselves and to follow a path of constructive citizenship. This does not mean that they have to adopt "white" social values. They can learn to prosper in a historically predominantly white society while being true to their African heritage and to the best aspects of black culture while separating out the dysfunctional parts of that culture. They have many good role models to choose from including Bill Cosby and Alan Poussaint themselves. And they have a wonderful Good Samaritan, Leon McLaughlin, a Seattle shoe shine man who has been responsible for bringing clean water to Bolivian peasants, something that the vaunted World Bank and high powered American Chicago School economists failed to do. 

Seattle Shoeshine Man Brings Clean Water to Poor Bolivian Peasants

Leon McLaughlin shines shoes in Seattle. He is also responsible for bringing clean water to poor people in Bolivia. He has been responsible for the installation of water-filtration machines in 10 hospitals and 10 schools. One might ask how a guy that shines shoes for a living could be responsible for bringing clean water preventing death and disease to poor people in the Third World. At the very least it puts to shame all the fat-assed, selfish Americans who think about nothing more than how to lower their taxes and make more money for themselves. And complain if the government helps anyone out.

This is from an article by Nicole Brodeur in the Seattle Times:

"There is such a need," McLaughlin said the other day. "Two million children are dying a year, 1.2 billion people are hurting from waterborne illnesses. We have to bring that number down to zero." It's a tough thing to wrap your mind around: A man who hunches over people's feet all day, offering one of life's little luxuries, who then stands up and travels thousands of miles to get the neediest what everyone deserves: potable water. "You can give a person food, clothes and medicine," he said, "but without clean water, what good is that?" McLaughlin, in Seattle for 31 years, has always had a mind for business. He sold coffee machines in Vancouver, worked for the Seattle Repertory Theater, has a real-estate license and has owned his shoeshine stand since 1989.

There is so much potential to do so much good in the world. Seattle's other philanthropist, Bill Gates, sits atop the Gates Fondation with a $30 billion fund. They also do a lot of good in the world. But here is a guy who shines people's shoes making a big difference for hundreds if not thousands of poor people whose single greatest need is clean water. It is estimated that there are a billion people worldwide withourt clean water, and much of the world's sick and dying are because of lack of clean water. I'm reminded of the story in the Bible in which Jesus said that the poor woman who had given a couple of cents had given more than the rich man who had given hundreds of dollars because for the poor woman it was the last of her money whereas for the rich man he had plenty more. If Mr. McLaughlin can figure out how to help poor people, why can't the government of the US? It's because their philosophy for the last 30 years was to privatize everything even water delivery systems. Hopefully now, instead of trickle down economics we'll have an era of trickle up as Mr. McLaughlin exemplifies. I'm just blown away by this man's goodness and his example.

He founded his own company, LAM (his initials and an acronym for Land and Water Maintenance), to bring a water-filtration machine to developing countries. LAM buys the machines for $8,500, then donates them to World Vision. McLaughlin takes a small commission, which he says he puts back into the project. LAM's first success was the installation of a filtration machine in Bolivia in 2007. The machine generates 740 gallons of clean water per hour. Back home, McLaughlin takes advice from customers. Money people, business people and $600-per-hour lawyers who give him free counsel — along with $5 for the shine. "The only thing I ever did was get Leon to exercise his potential," said retired attorney Robert Radcliffe, 81, who met McLaughlin when he represented him in an automobile-injury case and stayed close. He's a regular customer. McLaughlin mainly sees the potential for other lives. "With this trip, we can let the world know that we have all these children dying," he said. "This situation is urgent."

After the World Bank and IMF insisted that Bolivia turn over water provision to privatized companies, most poor people could not afford the price for clean water. They went back to drinking dirty water and dying of water borne diseases. In addition women were forced to haul water which took a large chunk of their time each day which they could have been using more productively at home.

This is from another article:

At $5 a pair ($8 for boots), shining shoes doesn't pay the bills. McLaughlin also sells real estate and works nights as an usher at the Seattle Repertory Theatre. McLaughlin came to Seattle from his native Cleveland when he was 22 as staff adviser for the Paramount Theatre and worked there until the early 1990s before moving full time to the Seattle Rep and investing in real estate. In the mid-1990s, he started a business in Canada selling coffee-making equipment and began traveling back and forth from Vancouver. The business sparked his interest in water, which grew as he traveled and discovered water problems around the world. Finally, when he began to research different water companies, he saw the growing investment in water management. "This stuff is just like oil," McLaughlin said. "This stuff is going to be a commodity." The United Nations Development Programme estimated that almost 2 million children die every year due to contaminated water sources, and about 1.2 billion people do not have access to safe water. So, McLaughlin went back to school and studied water maintenance through online classes at Sacramento State. After forming LAM (his initials and an acronym for Land and Water Maintenance), he partnered with Federal-Way based World Vision to bring the first six machines to Bolivia. McLaughlin hopes to apply for grants to install the machines in communities, instead of just disaster areas — the next two will be at a school and a hospital — in each of the 59 countries World Vision works in. "It's like you have a coffee shop on every corner, but instead you have clean water in every village," he said. LAM buys the filtration machines for $8,500 from First Water, then donates them to World Vision through a nonprofit. For each unit sold, LAM gets $2,000 in commission, which McLaughlin said he puts back into technical support for the distribution and upkeep of the machines. McLaughlin said he doesn't take a salary. Dean Salisbury, associate director of World Vision's global supply-chain management unit, said they wanted a company that would donate the machines, provide free transportation, free tech support and free maintenance. McLaughlin was the only one willing to do that without being concerned about the costs. "His goal in life is not to make money, but to help people," Salisbury said. "It's very refreshing in the corporate world."

I can't get over what good one man has done without corporate support or gazillion dollar budgets. Just think what could be done if his efforts were replicated and beefed up. It puts to shame the efforts of most governments and private foundations. This man deserves a Nobel Prize for what he has accomplished singlehandedly!

Check out the comments on this link after folks had seen the piece on Leon on the NBC Nightly News.

Here are some of them:

McLaughlin is a hero.  Just saw the story on the Nightly News.  Its an inspiring example to see how one man can make a difference even if he is not wealthy.  Makes think to myself "what have I done today that has helped someone in need?"

What a great guy!  How is it that everyday someone who makes such a difference in the world is overlooked by the people that pass him by.  Makes you think about the cleaners, dishwashers, garbage men/women, and see that they too can make a difference that is more than anyone would expect.  Because of his actions it will inspire many to give, including me.  Leon McLaughlin is my Hero.

This was a truly inspirational story.  People dream of making a difference in the world and he has figured out how to give clean water- a basic need we take for granted- to people who desperately need it, without changing their culture.Can Leon McLaughlin share how much each water filtration system costs? How can donations be made to his foundation?

Is Social Security a Government Sponsored Ponzi Scheme?

Max Keiser is right! Social Security is a Ponzi scheme. Contrast it with a pension fund which takes in money, invests that money and then pays out from its earnings from the investment as well as principal. At least that's how it's supposed to work. By contrast, social security takes in FICA taxes which are separately taxed from income or anything else, spends the money as if it were general fund money and pays out to social security recipients essentially from the same general fund. So it's actually worse than a Ponzi scheme. At least in a Ponzi scheme the payouts are from the incoming monies that are kept separate from other accounts. They aren't used for something else and then the money for payouts found elsewhere as well.

Now even a lot of pension funds are Ponzi schemes and worse. Take CalPERS, for example, the world's largest pension fund. They take in money from public sources and then  leverage it, borrowing more money and then invest it. If they lose money on the investment, they still have to pay back all the money they borrowed and they can tax California cities, towns and schools to do it!. This is worse than a Ponzi scheme too unless Mr. Ponzi leveraged the money he took in from investors.

At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America. Partly because of these investments, California Public Employees' Retirement System is struggling to avoid one of its worst annual declines since its 1932 inception. Calpers has lost almost a quarter of its assets since July 1, the start of the current fiscal year. ... Calpers is now warning California's cities, towns and schools that they may have to cough up more money to cover the retirement and other benefits the fund provides for 1.6 million state workers. Some towns are already cutting municipal services, and at least one is partly blaming the Calpers fees. Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed.

Now concerning Mr. Madoff, I can't believe that he didn't invest at least some of the money investors parked with him in which case he was no diffrent from any other hedge fund manager that lost money and collapsed due to bad investments. In which case what's the difference between Mr. Madoff and any other bad hedge fund manager or even the managers of CalPERS?

I don't expect the Federal government to get into the business of investing the social security money it takes in in order to multiply the money necessary to pay recipients, but at least they could recreate an honest system. And, at least, they should accumulate interest on that money. An honest system would be one in which the money they take in as social security taxes would be kept in a separate account and be sufficient to pay social security recipients as projected over the next 50 years, for example. That would mean no commingling with the general fund. And it would mean eliminating the cap on social security taxes so that the rich paid FICA taxes on their entire income and not just the first $100,000. or so. In addition social security should be means tested. Warren Buffet and Bill Gates don't need to receive it. One step in the right direction is that they are already starting to means test Medicare taxes ^i.e. rich retirees now pay in more monthly in return for their Medicare benefits. It's no big secret what it would take to make social security both honest and solvent. Instead Republicans want to get rid of it altogether so they try to convince the populace that it's untenable and in danger of collapse. Unless it's changed by an act of political will, it will collapse. The Republicans will be happy to see that. The Democrats have to step up to the plate and make the necessary changes to prevent that. Hopefully, Obama will.

So let's not be too hard on Mr. Madoff. What's the difference between a failed, overleveraged hedge fund manager and a proprietor of a Ponzi scheme? At least Mr. Ponzi didn't leverage his intake.

Also posted as a comment on Robert Reich's blog.

Economic Stimulus or Economic Restructuring?

 

The American economy which is composed of 70% consumer spending resembles the process of force feeding geese to obtain foie gras. The force feeding is done by means of advertising. Dr. Reich is right in that the problem lies in the demand side, not the supply side. The problem isn't getting banks to loan more money when consumers are tapped out with debt. The problem lies in correcting the overcommercialized consumer economy in the first place.

First, financial support has to be given to those in dire need: the jobless, the homeless, those in danger of foreclosure. Foreclosure relief, extended unemployment benefits, extended food banks and other direct help and support to those in need. Second, jobs need to be created with a WPA style program. When the private sector fails as its done now, the government needs to be the engine of the economy of last resort.

Even with support for the needy and a WPA style jobs program, certain businesses will fail and others will have to downsize. This is only natural as consumers scale back from a 70% of GDP consumption level with no savings to a 60 or 65% consumption level with 5% savings, as Frank Thomas has recommended in his many comments on this blog. It is more desirable in the long run that consumers scale back their consumption rather than go into debt to support the current consumption level for the sake of business. What matter is it if the GDP contracts if everyone has a place to live, food to eat, good schools to send their children to and meaningful work?

If people start to save more and consume less, government needs to invest more in order to maintain the current GDP. But forget GDP. The problem is meaningful job creation in order to build a world class infrastructure not to mention a world class society, decrease our dependence on foreign oil and capital and get our house in order. Just creating the economic conditions for car manufacturers to sell more autos accomplishes none of the above. In fact fiscal prudence on the household level suggests that not buying a new car and repairing the old one makes more sense. We shouldn't be wringing our hands over the lack of auto sales or encouaging more consumer debt in order to buy them. The problem is for consumers to reduce their debt not to accumulate more. If this is bad for the overall economy, so be it. The overall economy needs to adjust to something more sane at the citizen level. It's bass ackwards to suggest that consumers need to spend more to support the overall economy. The economy needs to refashion itself to accomodate a saner, healthier life for its citizens.

If citizens have their basic needs met with government support of food, housing, schools, energy and transportation, then the overall economy can adjust to that. If retail stores in malls have to close, maybe that's for the best. If people buy less merchandise that they don't really need, maybe that's for the best. If the mall store employees lose their jobs but have support from unemployment insurance, housing assistance and generous food banks, maybe that's for the best. What they need is a ladder of opportunity to a better job that's not being supplied by the current supply side economy. So government will have to step in to make up for the failures of unfettered laissez-faire capitalism. It has already stepped in, without much success, to bail out the wealthy. Now it's time for it to step in to bail out the poor and middle class.

The goal should be not to save meaningless jobs but to create meaningful ones. Most retail employees would probably rather have a more meaningful job creating a world class infrastructure and society in the US. The paradigm has to shift from Milton Friedman-Alan Greenspan Chicago School, Ayn Randish, supply side, trickle down economics which has dominated not only the US but the whole world (via the IMF and World Bank) for the last 30 years to an economic model more in tune with the other successful models already used in other parts of the developed world which support a healthy middle class. If wealthy people have to become middle class in this process, they will probably be better off in the long run. If they have to eat granola rather than foie gras, they will probably be healthier. The important thing is to alleviate the pain of those who are ill-housed, ill-clothed and ill-fed. I would add to that list: undereducated and underemployed.

Also posted as a comment on Robert Reich's blog.

Bush the Worst President in US History or the Best?

Senator Bernie Sanders says that Bush will go down as the worst President in American history, but it all really depends on your point of view, doesn't it. I would contend that from the neocon point of view that has ruled the Republican party for the last 30 years, Bush will go down as one of the best and greatest Presidents in US history.

Reagan set out to destroy the middle class. I remember when Eldridge Cleaver spoke to the UCSD student body in the late 60s and led a cheer that seemed to go on forever: "F*** Ronald Reagan, F*** Ronald Reagan ..." And this was before Ronald Reagan became President of the US. All the blue-haired old ladies headed for the exits. When word got back to him which it inevitably did, Reagan probably felt like he had to get rid of all these guys and by extension the entire middle class who had gotten all too uppity. Just think of that free tuition that these kids were not even grateful for. He started by getting rid of the air traffic controllers union. Deunionizing is always a good thing from the neocon point of view.

Well, Bush has almost completed the job that Reagan set out to do and hence will go down as one of the greatest Presidents in US history from the neocon point of view and, since history is written by the victors and not the vanquished, I suspect the middle class will have little to say about it. And that point of view has plenty of ballyhooers, namely Rush Limbaugh, Sean Hannity, Bill O'Reilly, Michael Reagan and a whole host of others. And a lot of money to hire "intellectuals" at the Heritage Foundation, American Enterprise Institute and Cato Institute. There is a whole infrastructure of well funded right wing intellectuals, historians and talk show hosts.

Bush is even finishing off the environmentalists as he goes out the door, changing regulations right and left. In fact no one has been more successful at destroying the middle class and the environment than Bush/Cheney.

So rather than portraying Bush as a bumbling incompetent, a more accurate portrayal would be Mission Accomplished. His list of accom- plishments would include permanent ongoing wars which greatly benefit the military-industrial complex and the Carlyle Group where neocon ex-Presidents park their money, ignoring the plight of poor people caught up in the disaster of Katrina, militarizing the mind-set of the American people, demeaning the role of government in American life, successfully hiding the fact that Bush policies have created the greatest inequality and transfer of wealth to the upper classes in American history, policies that have favored business while destroying the environment and on and on. This is not to mention how Bush policies have destroyed the Constitution with warrantless wiretapping, torture as an instrument of war and signing statements thus creating the imperial Presidency that Nixon set in motion but the success of which he couldn't have dreamed of compared to its actual implementation by Bush. "When the President does it, it's not illegal."

The only problem that Bush and his apologists and right wing historians have is how to portray all this in the most positive light, but that's where the spin-meisters come in. NO PROBLEM. They will be working overtime at the Bush Presidential library to portray stealing as "creating the conditions for liberty," the immiseration of Iraq as the "liberation of Iraq," the destruction of the middle class as a "times are tough" bump in the road that just "happened" that Bush couldn't have foreseen and had no responsibility for. Bush's legacy burnishers will descend like a plague of locusts. Think of the book signings. Think of the million dollar speeches Bush will be called upon to give in gratitude for all he's done for the wealthy interests that will dote on his every word and pronouncement. While Carter swings a hammer for Habitat for Humanity and Clinton does his charitable work through the Clinton Global Initiative, these do-gooders will have to take a back seat while Bush cashes in thanks to grateful benefators who appreciate all he did for them while he was in office. Of course, Cheney has already cashed in because he didn't divest himself of Halliburton stock while he was in office as vice-President and we all know how successful Halliburton has been in the last eight years with all those no bid, cost plus contracts that Cheney has thrown their way.

Yes, freedom is on the march - the freedom to not pay taxes and the freedom to eat out of garbage cans. It all depends on your perspective.

Also posted as a comment on Robert Reich's blog.

Government Needs To Be the Engine of the Economy

As the recession deepens with no end in sight, one thing is clear. Private corporations are not creating jobs. Things were already bad with all the outsourcing of jobs into China and India, with corporations searching the world to find the cheapest sources of labor, with the importation of foreign workers with HB-1 visas, with illegals flooding across the border to take construction and other low paying jobs. But now with the world wide slowdown in consumption, what few jobs had been left to Americans are now going away. This could be a neverending downward spiral with more people unemployed, more home foreclosures, more layoffs, less consumption. What to do?

With the private economy in shambles, the government needs to be the financial engine of last resort. All indications are that Obama plans to initiate a large scale jobs and infrastructure rebuilding program. It's sort of obvious that this will put money into the hands of worker/consumers, save homes that would otherwise go into foreclosure and prevent increased misery and social unrest. If private enterprise can't solve these problems - and it has been contributing mightily to them by locating cheap labor abroad - who else but government can step into the breech? The jobs created need not be "government jobs." That is the workers need not be government employees. Contracting out work to the private sector will have the same effect and is probably preferable to putting more people on the government payroll. And private corporations love government contracts. They've been sucking off the government teat for years. So what else is new? There will have to be a change in philosophy as to what type of contracts the government is letting. Obviously, the military-industrial complex for all its other deleterious effects has not been able to be the jobs engine to keep the economy purring. A change in philosophy from providing contracts to defense contractors to providing contracts to infrastructure contractors should take place. Building up infrastructure will create the conditions for private enterprise to provide secondary job creation by taking advantage of the profit opportunities the new infrastructure will provide.

The government does not need to micro-manage the new jobs that are created because they will after all be created in the private sector in the first place, but it does need to set the conditions and monitor the contractors to prevent fraud, waste and abuse. We the taxpayers want the most for our money - something that has not been forthcoming in the defense sector where there is massive waste and abuse. Make-work jobs abound that contribute nothing to the health of the overall economy. Government spending in the commercial sphere will save whole industries like the steel producers who are now in danger.

WASHINGTON (AFP) — The US steel industry is in collapse and looking for a massive government investment program of up to one trillion dollars to stimulate demand for the key commodity, a report said Friday. Output of steel has plunged 50 percent since September after posting record profits as construction and auto production have fallen sharply amid a US recession and the global credit crunch, The New York Times reported. Industry executives are pleading for a huge public infrastructure investment program -- of up to one trillion dollars over two years -- under president-elect Barack Obama's proposed stimulus plan, the newspaper said. "What we are asking," said Daniel DiMicco, chairman and chief executive of the Nucor Corporation, a giant steel maker, "is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a buy America' clause," the newspaper quoted him as saying. Economists in the Obama camp have said that the president-elect will propose to lawmakers a stimulus plan that will include significant infrastructure spending that draws on heavy industry. The steel industry can spring back to life through construction of highways, bridges, electric power grids, schools, hospitals, water treatment plants and rapid transit, industry executives told the New York Times. "We are sharing with the president-elect's transition team our thoughts in terms of the industry's policy priorities," Nancy Gravatt, a spokeswoman for the American Iron and Steel Institute, was quoted saying.

This pump priming by the Federal government will hopefully not be corrupted by the political process into being a massive pork barrel project. Only targeted projects will be helpful to the restoration of economic health. The US needs to bring itself into par with the rest of the developed world and that means high speed rail, huge increases in the public transportation system, green energy. Europe and Japan put the US to shame in this department. Even former Soviet bloc countries like the Czech Republic have better rail systems than the US. When I was in the Czech Republic in 2000, I could travel almost everywhere by rail. Practically every small town has a rail connection. In France there is every thing from high speed rail (the TGV) to Toonerville trollies that will get you to the tiniest ville wherever that might be.

Universal health care is another area where much can be done to create a whole new economy and protect the American people from devastation and bankruptcy. Even the much touted Medicare system really is not cost effective for seniors. First, you have to pay a premium of about $100. a month. Secondly, you have a yearly deductible of $135. Thirdly you have a 20% copay. Fourth, you have "supplementary insurance," which is more out of pocket expense going to private insurance companies. Fifth, you have the whole issue of whether or not the doctor "accepts assigment," which is whether he will take what Medicare pays or will charge you even more. Contrast all this hassle with a country like Canada where all you do is show up at a clinic and present your health card. There is no charge whatsoever. The Medicare system in the US is bastardized with numerous Trojan horses all of whom represent ways for private corporations to take advantage of American citizens by getting their fingers in the pie. A lot of streamlining is in order.

The Milton Friedman Chicago school of economics has held sway for the last 30 years. In that time they've wreaked havoc on the economies of Bolivia, Argentina, Chile, Russia, Iraq and now, finally, the US itself with their penchant for privatization and deregulation. The net effect of their efforts has been to create an oligarchy of very rich individuals while casting social safety nets, which protect the poor and lower middle class, to the wind. Wealth for some, misery for 50% of the population. Workers, peasants, marginalized people, subsistence farmers and now major portions of the American middle class have been impoverished. This is what happens when trickle down economics holds sway. The environment has been trashed in the name of economic progress. Bush recently passed a "regulation" that let coal mining companies dump their waste in Appalachian rivers. Practically the next day a dam of waste burst which devastated a whole Tennessee valley and threatened to contaminate the Tennessee River, a source of drinking water for many. This whole approach to economics should be deader than a doornail, but the right wing propaganda machine with ample corporate money is gearing up to give us more of the same. Bubbles work just fine for them.

The whole nature of discourse in this country needs to change. If the American government can't modernize itself and move into the 21st century and at least keep up with the quality of life in western Europe, then I'm afraid its days are numbered. China is eating our lunch, and has become the US' de facto banker. While the US goes further and further into debt, China and many other countries in the world are only adding great quantites of money to their sovereign wealth funds. While US corporations exploit China's workers and markets, China's government has found a way to accumulate enormous riches. How does it do it? I would imagine through taxation since the government doesn't manufacture or sell anything itself. Production has been completely privatized. Is there a lesson here? How does the US get out of debt and become wealthy again and not just the world's biggest consumer market? The first condition is to get rid of neocon philosophy and replace it with a more humane national philosophy in which social safety nets and national wealth building replace indebtedness and privatization. Let private enterprise thrive, but when it fails let the government be there to help. Let government be the financial engine of last resort and a protector of the welfare of its people.

Also posted as a comment on Robert Reich's blog.