California Free Press

A Two Pronged Approach to Job Creation

by John Lawrence

It's no secret that the only jobs creation program in the US is the military and the military-industrial complex. If you're poor and uneducated, you can always get a job by joining the Army, the Navy, the Marines, the Coast Guard or the Border Patrol. If you have a college degree you can join the FBI, the CIA, Boeing, Lockheed, Northrop Grumman, General Dynamics or any one of numerous other defense contractors. These are America's jobs programs. So when President Obama talks about putting Americans to work building and repairing infrastructure, this is a radical departure from traditional American job creation. But it's what FDR did in the 30s with the Works Progress Administration and the Civil Works Administration.

Harry Hopkins was FDR's point man.

Faced by what he knew would be a bitter winter, in 1933-34, Hopkins on Nov. 1 presented the President with a plan for a Civil Works Administration (CWA), to be run by his staff, which would initiate federally sponsored work projects throughout the nation, mainly projects of city, county, and state infrastructure, to be designed, planned, and proposed to CWA by those government units. These included repair and construction of streets, roads, schools, public buildings, playgrounds, and parks, as well as flood control, sewage, and water management, and much else of that sort. Roosevelt created the agency nine days after their meeting. Its budget eventually rose to $900 million. Hopkins managed to employ 800,000 people on such worthwhile projects within ten days. Nearly 2 million had been employed by two weeks later. Nine weeks after the CWA had been started—in the week ending Jan. 18, 1934—the CWA had its peak employment of 4,263,644 men and women. Despite orchestrated charges of corruption and waste in the controlled press, the exhaustive investigations found very little of either. A study commissioned by the Army praised Hopkins and his staff for what had been the largest peacetime project in U.S. history, noting that he had mobilized “in two months nearly as many persons as were enlisted and called to the colors during our year and a half of World War mobilization....” Beyond preserving the lives and labor power of over 16 million Americans during a cruel winter, CWA built and repaired over 40,000 schools and 255,000 miles of roads and streets; built 469 airports and improved 529 others; laid 12 million miles of sewer pipe; employed 50,000 teachers so that many rural schools could remain open; and built 3,500 playgrounds and athletic fields.

FDR and Hopkins employed 2 million people in two weeks! And Obama, alpost a year later, has not spent the first jobs stimulus program's money. What's going on here? In short order Roosevelt and Hopkins initiated a two pronged jobs programs one prong of which put people to work immediately and the second prong of which involved subcontracting to private companies (Obama's approach) which took a lot longer. The important point is that these jobs programs were NON-MILITARY RELATED. Later WW II would create another huge jobs program and then pent-up consumer demand would provide plenty of jobs in its aftermath. FDR seemed to provide all these jobs without Congressional approval which by today's standards would have dragged on for months so why can't Obama do the same today? 

Any non-military related programs already created are paltry in comparison with either the FDR era programs or the vast military budget projected to be $1 trillion in 2010. While US infrastructure continues to deteriorate, while bridges, the electrical grid, water supply and sanitation systems continue to break down and rust away for lack of maintenance, the only way money seems to get spent in the US is on the war machine. The message is clear: if you don't want to lose your house, join the military. If you don't want to be foreclosed on, join the military. If you want a good job, join the military. Or else sit on your duff and collect unemployment. The US political system would rather have you sit on your duff and collect unemployment than for you to go to work and collect a paycheck directly from the government because that would be SOCIALISM. And it's important that socialism should be avoided at all costs, unless it's military related socialism, and that includes putting people to work doing socially useful tasks. I hate to think that today's conservatives are to the right of Adolf Hitler, but Hitler built the Autobahn, a huge non-military social program. Today's conservatives would raise Holy Hell if Obama proposed a social program on the order of the Autobahn or even on the order of the interstate highway system that Eisenhauer oversaw. And Obama's health care reform proposals were to the right of Richard Nixon's, and yet they accuse him of being a socialist.

Obama has promised 4 million jobs in two years. Hell, FDR accomplished that in four months. And he did it by employing workers directly by the Federal government. There was also a project that involved a public-private partnership otherwise known as government subcontracting. This program, the Public Works Administration or PWA, was headed up by Harold Ickes Sr. It got off the ground slowly compared to the CWA because it tackled unemployment indirectly by spending money largely through private contractors. The following explains why:

The PWA's poor performance relative to the CWA was more than just a matter of being ruled by the wrong Harry. Structurally, the CWA was much better able than the PWA to mobilize quickly because it could avoid the cumbersome process of putting contracts out to bid and all the other obstacles to swift action that arise with public-private partnerships. (Government by contract was popular then, and remains so today, because it allows a politician to create the semblance of government action without expanding the government work force. It also caters to the public's belief that the private sector is more capable, an illusion punctured by recent scandals surrounding Blackwater and other U.S. contractors in Iraq.) Hopkins enjoyed immediate carte blanche to apply directly the apparatus of the federal government. He shifted staff from the federal relief program he'd headed up, seized tools and equipment from Army warehouses, and cut checks through the Veterans Administration's vast disbursement system. The CWA laid 12 million feet of sewer pipe and built or made substantial improvements to 255,000 miles of roads, 40,000 schools, 3,700 playgrounds, and nearly 1,000 airports (not to mention 250,000 outhouses still badly needed in rural America). Most of the jobs involved manual labor, to which most of the population, having been raised on the farm, was far more accustomed than it would be today. But the CWA also provided considerable white-collar work, employing, among others, statisticians, bookbinders, architects, 50,000 teachers, and 3,000 writers and artists. ("Hell, they've got to eat like other people," Hopkins noted matter-of-factly.) This was achieved with a remarkable minimum of overhead. Of the nearly $1 billion—the equivalent today of nearly $16 billion—that Hopkins spent during the CWA's five-month existence, 80 percent went directly into workers' pockets and thence stimulated the economy by going into the cash registers of grocers and shop owners. Most of the rest went to equipment costs. Less than 2 percent paid for administration.

Obama's jobs program proposals should take a page out of FDR's book. There are basically two types. 1) Direct government employment such as the WPA and CWA; 2) Government subcontracting for specific peaceful purposes. While it should be easy for the government to set up a WPA style program to put young men, who have a 25% unemployment rate, to work, more expertise is required to build and repair infrastructure. That's where the subcontracting part comes in. This is the same basic approach that is currently used for most military procurement - subcontracting. Most of the money goes out the door to defense contractors rather than being spent directly by the government. Bush Jr tried to privatize the military even more by hiring subcontractors to replace regular troops. Republican philosophy is to privatize the whole damn military-industrial complex so that no one is directly employed by the Federal government and private contractors, who are only in it for the money, will be able to maximize profits. In their philosophy the government would just become one giant contractor subcontracting out all government functions to private subcontractors. But if money went out the door to subcontractors to rebuild infrastructure, that would be socialism. So what do we call it when all government monies go to military related subcontractors? Corporatism? Fascism? National Security Socialism? Or Naseism for short?

It is only failed ideology that prevents Obama from the kind of jobs creation programs that FDR undertook and that I'm advocating here. Instead the Republicans will just say no to any Congressional legislation that would create civilian jobs programs, whether that approach is direct or indirect jobs creation. Their only approach is to give tax cuts to the rich and to expand the military. But didn't FDR and Harry Hopkins create their jobs programs totally within the executive branch without Congressional approval? Yes they did! Why can't Obama do the same?

The answer is he could if he wanted to and he better get with it if he really wants to do something to benefit the legions of unemployed young men, both black and white. Something needs to be done except to exhort everyone to get a college education. Someone needs to realize that the jobs aren't coming back in sufficient numbers to get the unemployment rate down to an acceptable level. It's been government policy for 30 years under Republican administrations - and I include Clinton's in that - to assist corporations to outsource jobs. There is a direct correlation between unemployment today and outsourcing. That's why the government has to be the employer of last resort. Otherwise, it's consigning a vast number of young men and women, but especially men, to lives of crime or homelessness or prison inmatehood. The lower classes of society are never going to go to college so, if the only answer is that everyone has to go to college to escape a life of crime or poverty, if there is no provision of jobs for them, then inmate populations, criminal gangs and homeless populations will swell. And the private sector is phiosophically opposed to the creation of high wage jobs when it can improve profits by creating low wage jobs abroad.

It's disheartening to think that a Democratic President cannot raise the example of FDR and exhort Americans to support him in creating jobs directly through the executive branch as FDR did. As much as Americans are concerned about jobs, I don't think they'll complain if they see them created overnight as FDR and Harry Hopkins did. Will Americans that have newly created jobs accuse Obama of socialism? I don't think so. Let the Republicans complain as they undoubtedly will, but at least Obama will have something to show for it besides a 10% unemployment rate which everyone predicts will last through 2010. And this will doom Democratic election prospects this year.

So Obama should take a bold step and overcome his centrism, timidity and fear of Republican disapproval. He doesn't have to worry about garnering 60 votes in the Senate if he would just use his executive powers to create jobs directly for the American people.

Supreme Court Paves Way for Corporate Takeover

Jonathan Alter | High-Court Hypocrisy

Monday 25 January 2010

by: Jonathan Alter, Op-Ed

The year 2010 is already a nightmare for progressives, and it's only January. In one week alone, the health-care bill de -- railed, the liberal radio network Air America went silent, and the Supreme Court ruled that the First Amendment allows corporations to pump as much money as they want into political campaigns. I've got no answers on the first two, but a few suggestions for avoiding despair on the third, the most serious threat to American democracy in a generation.

In a devastating decision, the high court cleared the way for one of those corporate takeovers you read about, only much bigger. If Exxon wants to spend $1Emillion (a bar tab for Big Oil) defeating an environmentalist running for city council, it can now do so. If Goldman Sachs wants to pay the entire cost of every congressional campaign in the U.S., the law of the land now allows it. The decision frees unions, too, but they already spend about as much as they can on politics. Fortune 100 firms currently spend only a fraction of 1 percent of their $605 billion in annual profits on buying politicians.

This didn't have to happen. The court was asked to rule on whether the Federal Election Commission had the right to regulate a corporate-backed outfit called Citizens United that made the conservative film Hillary: The Movie. But instead of ruling narrowly, the Roberts Court -- in a new standard for judicial hypocrisy -- struck down the laws of 22 states and the federal government.

So it's on. The Citizens United case is the Roe v. Wade of the 21st century, only the roles are reversed. Conservatives who bashed liberal judges for "legislating from the bench" and disrespecting precedent are now exposed as unprincipled poseurs. Liberals who grew up depending on courts to protect the public interest must now build a mass movement to confront the greatest accumulation of corporate power since the age of the robber barons.

At his confirmation hearings, John Roberts said, "Judges are like umpires. Umpires don't make the rules; they apply them." He repeated his belief in judicial restraint and the importance of precedent. So what did his court do? It gutted more than a century of law that barred direct corporate expenditures on behalf of politicians. And it slam-dunked GOP stalwarts like Teddy Roosevelt, Robert Taft (his 1947 Taft-Hartley Act limited outside campaign expenditures), and, yes, John McCain. The key to the 5–4 majority finding that corporations have all the rights of people: Samuel Alito, the hardliner who replaced Sandra Day O'Connor.

In his dissent, John Paul Stevens wrote that corporations "are not members of our society. They cannot vote or run for office." If corporations can't vote, he argued, why should they crowd out those who do? In oral arguments, Ruth Bader Ginsburg, another dissenter, asked if foreign companies should have the same free-speech rights as domestic ones, since foreign individuals are allowed to make a speech here. The majority had no answer, and opened the door to a Chinese bank or Russian oligarch buying Congress.

What's the remedy? A constitutional amendment is tempting, but tampering with the First Amendment is a bad idea. The best option is Sen. Dick Durbin's ingenious campaign-reform bill. The idea, which already works well in New York City and other localities, is to set up a public-financing system that rewards candidates who attract small donors. House candidates, for example, who raise at least $50,000 in donations of $100 or less would be eligible for $900,000 in public money. The president must move the bill to the center of his agenda and mobilize his 13 million 2008 contributors to pressure Congress to enact it.

New laws regulating corporate governance are also essential. Britain requires shareholders to vote on corporate political expenditures. We should do the same, and adopt Arlen Specter's bill banning political contributions from corporations that contract with the government.

As of last week, the latter is probably unconstitutional. Until one of these hypocrites retires, we can't expect the judiciary to protect average citizens from the power of big money. "I hope we shall crush in its birth the aristocracy of our moneyed corporations," Thomas Jefferson wrote, in a line that Antonin Scalia and others who claim to be guided by the Founders ignore. Jefferson was too hard on corporations, which create wealth and employ people (though the vast majority work for small businesses). But for 100 years, the Supreme Court ruled that our Constitution permitted restraints on concentrated power. Today's Roberts Court Radicals don't believe in restraint, especially when it comes to themselves.

(c) 2010, Newsweek Inc.

Obama's Criticism of Supreme Court Right On!

Published on Sunday, January 31, 2010 by the New York Times

The State of the Union Is Comatose

by Frank Rich

HANDS down, the State of the Union's big moment was Barack Obama's direct hit on the delicate sensibilities of the Supreme Court Justice Samuel Alito. The president was right to blast the 5-to-4 decision giving corporate interests an even greater stranglehold over a government they already regard as a partially owned onshore subsidiary. How satisfying it was to watch him provoke Alito into a "You lie!" snit. Here was a fight we could believe in.

There was more to admire in Obama's performance as well. He did not retreat into the bite-size initiatives - V-chips, school uniforms - embraced by an emasculated Bill Clinton after his midterm pummeling of 1994. The president's big original goals - health care, economic recovery, financial reform - remained nominally intact, as did his sense of humor. In a rhetorical touch William Safire would have relished, Obama had the wit to rush the ritualistic "our union is strong" so it would not prompt the usual jingoistic ovation.

Good thing, too, since our union is not strong. It is paralyzed. Many Americans were more eagerly anticipating Steve Jobs's address in San Francisco on Wednesday morning than the president's that night because they have far more confidence in Apple than Washington to produce concrete change. One year into Obama's term we still don't know whether he has what it takes to get American governance functioning again. But we do know that no speech can do the job. The president must act. Only body blows to the legislative branch can move the country forward.

The historian Alan Brinkley has observed that we will soon enter the fourth decade in which Congress - and therefore government as a whole - has failed to deal with any major national problem, from infrastructure to education. The gridlock isn't only a function of polarized politics and special interests. There's also been a gaping leadership deficit.

In Obama's speech, he kept circling back to a Senate where both parties are dysfunctional. The obstructionist Republicans, he observed, will say no to every single bill "just because they can." But no less culpable are the Democrats, who maintain "the largest majority in decades" even after losing Teddy Kennedy's seat - and yet would rather "run for the hills" than accomplish anything.

What does strong Senate leadership look like? That would be L.B.J. in the pre-Kennedy era. Operating with the narrowest of majorities and under an opposition president, he was able to transform a sleepy, seniority-hobbled, regionally polarized debating society into an often-progressive legislative factory. As Robert Caro tells the story in his book "Master of the Senate," this Senate leader had determination, "a gift for grand strategy," and a sixth sense for grabbing opportunities for action before they vanished for good. He could recognize "the key that might suddenly unlock votes that had seemed locked forever away" and turn it quickly. The horse trading with recalcitrant senators was often crude and cynical, but the job got done. L.B.J. knew how to reward - and how to punish.

We keep hearing that they just don't make legislative giants like that anymore. In truth, the long drought has led us to forget what they look like and to define senatorial leadership down. L.B.J.'s current successor, Harry Reid, could be found yawning on camera Wednesday night. He might as well have just taken the whole nap. Here was this leader's pronouncement last week on the future of the president and his party's No. 1 priority: "We're not on health care now. We've talked a lot about it in the past." Yes, a lot of talk - a year's worth, in fact - with nothing to show for it.

If Reid can serve as the face of Democratic fecklessness in the Senate, then John McCain epitomizes the unpatriotic opposition. On Wednesday night he could be seen sneering when Obama pointed out that most of the debt vilified by Republicans happened on the watch of a Republican president and Congress that never paid for "two wars, two tax cuts, and an expensive prescription drug program." The president's indictment could have been more lacerating. Crunching Congressional Budget Office numbers, David Leonhardt of The Times calculated that of the projected $2 trillion swing into the red between the Clinton surplus and 2012, some 33 percent could be attributed to Bush legislation and another 20 percent to Bush-initiated spending (Iraq, TARP) continued by Obama. Only 7 percent of the deficit could be credited to the Obama stimulus bill and 3 percent to his other initiatives. (The business cycle accounts for the other 37 percent.)

Perhaps McCain was sneering at Obama because of the Beltway's newest unquestioned cliché: one year after a new president takes office he is required to stop blaming his predecessor for the calamities left behind. Who dreamed up that canard - Alito? F.D.R. never followed it. In an October 1936 speech, nearly four years after Hoover, Roosevelt was still railing against the "hear-nothing, see-nothing, do-nothing government" he had inherited. He reminded unemployed and destitute radio listeners that there had been "nine crazy years at the ticker" and "nine mad years of mirage" followed by three long years of bread lines and despair. F.D.R. soon won re-election in the greatest landslide the country had seen.

Obama should turn up the heat on both the G.O.P's record of fiscal recklessness and its mad-dog obstructionism. He should stop paying lip service to the fantasy that his Congressional opposition has serious ideas to contribute to the cleanup. Better still, he should publicize exactly what those "ideas" are.

Yes, the Republicans were correct to laugh at one of the president's own gimmicks on Wednesday night: a symbolic and pointless spending "freeze." But their own alternatives are downright hilarious. When the G.O.P. House leadership last year announced its plan to cut federal spending by $75 billion annually, it enumerated specific new cuts of only $5 billion per year. A tax-cut-laden "stimulus plan" endorsed by Jim DeMint, the South Carolina senator and Tea Party hero, "would cost more than $3 trillion - more than triple the cost of Obama's stimulus - over the next decade," in the estimate of Jonathan Chait of The New Republic.

On State of the Union day, the Republican National Committee gathered at its winter meeting at Waikiki Beach to battle over a measure that would deny campaign funds to candidates who didn't pass a Tea Party ideological purity test. Back in Washington, other party thinkers trotted out some more brilliant ideas. Paul Ryan, a Wisconsin congressman hailed as the Republicans' new intellectual hope, laid out a lengthy "G.O.P. Road Map for America's Future" on The Wall Street Journal op-ed page that proposed cutting taxes (disproportionately for the wealthy) and privatizing Medicare and Social Security but devoted no bullet point to creating jobs for Americans in urgent need. On the Hill that morning, Michele Bachmann of Minnesota led House colleagues in signing a "Declaration of Health Care Independence" to complement a bill that would let Americans "purchase insurance with their own tax-free money." Gee, why did no else think of that ingenious fix for a health care system that leaves 46.3 million uninsured and whose runaway costs are on track to eat up one-fifth of the American economy?

It was a heartening breakthrough when Obama dismissed such idiocies repeatedly in his televised meeting with House Republicans on Friday. He mocked G.O.P. legislative snake oil that promises to lower all medical costs and "won't cost anybody anything." He must keep this up - and be equally tough on the slackers in his own party who stall his agenda. And he must be less foggy on the specifics of what that agenda is. Though on Wednesday night he asked Congress to "take another look" at the health care bill, even now it's unclear what he believes that bill's bedrock provisions should be. He also said he wouldn't sign any financial regulatory bill that "does not meet the test of real reform," yet tentatively praised a House bill compromised by a banking lobby that is in bed with Democrats and Republicans alike. The Senate, of course, has yet to produce any financial reform bill.

Americans like Obama far more than they like any Congressional leader. They might even like more of his policies if he spelled them out. But none of that matters if no Democrat fears him enough to do any of his bidding and no Republican believes there's any price to be paid for always saying no.

A year in, we have learned that all the conciliatory rhetoric won't cut it. But a president with a big megaphone and large legislative majorities has more powerful strings to pull, no matter what happened in one special election in Massachusetts. If he can't get a working government, at least he can shake things up in November.

Just look at how a sharp public slap provoked Justice Alito, threw a spotlight on the court's dubious jurisprudence and sparked an embarrassing over-the-top hissy fit on the right. A do-nothing Congress, at a time when ever more Americans are losing their jobs and homes, is an even riper target than the Supreme Court - and far more politically vulnerable. Without strong medicine from Obama, we can be certain of the same result: a heedless Congress will keep doing nothing. If he steps it up, there's at least a shot that his presidency, and maybe even the country, will be pulled back from the brink.

© 2010 New York Times

Frank Rich is a regular columnist for The New York Times.  He is the author of many books, including The Great Story Ever Sold: The Decline and Fall of Truth from 9/11 to Katrina.

An Nguyen Discusses Racism in Singapore

There are 3 major ethnic groups in this country. Chinese (70%), Malay (20%), Indian and others (10%). While the Malays and Indians are easy going groups, who seldom make any complaints about foreigners, the Chinese are the most vocal on this issue.
 
The Chinese-Singaporeans complain that their jobs and their livelihood are at stake because of foreigners (mainland Chinese, Vietnamese, Indians, Westerners, etc...). They urge that the government should have strict control over working visas and immigration to protect the locals.
 
Their main targets are the Chinese from mainland China. The Chinese-Singaporeans often regard these people as Mainland-Chinese in order to distinguish themselves as more refined Chinese. They say that these people are unrefined, lazy, and have a lot of bad habits that they carried with them from the old country.
 
The truth is that most of these people are very decent and hard working. They often take on low wage and unwanted jobs that are rejected by the locals (chef, waiter/waitress, cleaning, odd jobs, etc.). They can be found in almost any profession that one cound think of.
 
Racism can also be found in schools here. Most Singaporean students don't want to be friends with foreign students. A friend of mine, who has been here for 10 years on a government scholarship, told me that no one in her school wants to be associated with her or other foreign students. They especially look down on students that come from third world countries like India, Burma, Thailand, Vietnam, Philippines, etc. Last year she won a scholarship to do exchange study at Carnegie University (Pittburg, PA) for 6 months. She told us that she made more friends in the US during those 6 months than the 10 years that she spent in Singapore.
 
Other foreign students told us that their Singaporean teachers would not hesitate to make racist remarks toward them (e.g. "Philippino workers are very loyal like dogs.")
 
Everyday, I see the local employers transporting their foreign workers to different work locations in appalling conditions. Their lorries don't have any cover and these poor workers have to put up with 30 - 35C heat and rain. Very often, the employers scold them like they are some kind of animal.
 
What does the Singaporean government do? Well, nothing. If you are being ill treated by your employers and stage a protest, that would be the end of your working days in this country.
 
Have you ever heard of 100% - 150% rent increase before? Well, it happens here in Singapore. Most apartments and houses are owned by Singaporeans and they are the best profiteers on earth. The rent contract is usually from 1 - 2 years max. When it expires, the landlords can raise the rent as much as they want.  Practically all foreigners are tenants, and there is no such thing as a Tenant Advocate to help protect them. As a result, a lot of them have to squeeze themselves into tiny apartments to save money. A lot of foreign students have to leave because they can't afford the high rent.
 
In my opinion, Singapore is a good country with many good things like clean government, safe, clean, excellent infra-structure, good health care, low taxes, excellent educational system, etc. The government is doing a lot of good things to look after the welfare of their citizens. However, racism, discrimination and the ungracious manners of the locals have begun to their toll on the image of this country. Most foreigners view the Chinese-Singaporeans as ungracious blood suckers, opportunists, and racists. This will definitely have a negative effect on Singapore in the future.
 
You can read more about the Singaporeans on Asiaone News.

Dude, You've Got That Democrat in the Headlights Look

California Senate Passes Medicare for All Legislation

Published on Thursday, January 28, 2010 by CommonDreams.org

New Energy for Healthcare Reform After National Bills Stall

by California Nurses Association/National Nurses Organizing Committee

SACRAMENTO - To ecstatic applause from healthcare advocates, the California Senate today breathed new life into national prospects for fundamental health reform by passing on a 22 to 14 vote a major bill to guarantee healthcare in the state through creating a Medicare for all system that would cover every Californian. 

SB 810, The California Universal Healthcare Act, authored by Sen. Mark Leno and sponsored by the California Nurses Association/National Nurses United (CNA/NNU), with broad support among many healthcare, community, and labor groups, will now proceed to a vote by the Assembly, which has passed similar legislation in the past.  The bill would establish a single-payer system in California, modeled on the healthcare systems flourishing in virtually all other industrialized nations, where better patient outcomes are achieved at a fraction of the cost of the U.S. system.

“It is unclear what the prospects are for health reform at the national level,” said CNA co-president Geri Jenkins, RN, “but this vote offers California the chance to chart a new course for the nation.  SB 810 will guarantee healthcare for every family through a humane system that controls costs and allows patients and their doctors--not insurance agents--to make decisions about healthcare,” said Jenkins.  “People will pay less, and no longer be denied care based on their income, age, location, or pre-existing health conditions.”

Noting during the floor debate that, “consistently 59 per cent of California voters say yes” they want a Medicare for all system in the state, Sen. Leno added that single-payer is not just a bill for a humane health system, but also a jobs program for a state that desperately needs one: “We can’t compete in a global marketplace where all our competitors have had the government take the burden of healthcare off the shoulders of their employers….as we move towards single-payer in this state, and have better universal coverage, this will attract employers to California.  We are already underwater in our healthcare system.  We can’t keep up.”

Referring to opposition arguments about supposed ballooning costs under the bill, Sen. Leno pointed out that a single payer system would simply redirect current spending on healthcare, away from insurance overhead and towards a more direct and efficient way of providing care.  Additionally the bill would not go into effect immediately; the current SB 810 creates a system to propose revenue streams that would then go back to the legislature for final review.

Medicare for all or “single-payer” healthcare reforms, such as SB 810, would help create the kind of quality jobs so urgently needed today, and do so while providing a huge economic stimulus. A CNA/NNU study last year documented that national single-payer reform would generate 2.6 million jobs and $317 billion in additional business and public revenues.  Further, CNA/NNU research last year found that six of California’s largest insurance companies reject more than one-fifth of all claims, an experience many California patients know all too well.

California is one of more than half a dozen states with similar state legislation this year, indicative of the desire for healthcare solutions by states no matter what happens at the federal level. Among major supporters of SB 810 are the California School Employees Association, California Physician Alliance, OneCare, and the Los Angeles Unified School District.

To Curb Climate Change, We Need to Protect Water

Published on Friday, January 29, 2010 by On The Commons

An International Rescue Plan for Fresh Water

by Maude Barlow

It is widely acknowledged that greenhouse gas emission-fueled climate change is having a profound and negative impact on fresh water systems around the world. Warmer weather causes more rapid evaporation of lakes and rivers, reduced snow and ice cover on open water systems, and melting glaciers.

What is less understood is that our collective abuse and displacement of fresh water is also a serious cause of climate change and global warming. If we are to successfully address climate change, it is time to include an analysis of how our abuse of water is an additional factor in the creation of global warming as well as solutions that protect water and watersheds.

There are two major factors. The first is the actual displacement of water from where it is sustaining a healthy ecosystem as well as healthy hydrologic cycles. Because humanity has polluted so much surface water on the planet, we are now mining the groundwater far faster than it can be replaced by nature. New Scientist reports of a "little-heralded crisis" all over Asia as a result of the exponential drilling of groundwater. Water is moved from where nature has put it in watershed and aquifers (where we can access it) to other place where it is used for flood irrigation and food production - where much of it lost to evaporation - or to supply the voracious thirst of mega cities, where it is usually dumped as waste into the ocean.

Water is also lost to ecosystems through global trade - water used in the in the production of crops or manufactured goods that are then exported (known as virtual trade in water). Over 20% of daily water used for human purpose is exported out of watersheds in this way. Water is also piped across long distances for industry leaving behind parched landscapes.

The second factor is the removal of the vegetation needed for a healthy hydrologic cycle. Urbanization, deforestation and wetland destruction greatly destroy water-retentive landscapes and lead to the loss of precipitation over the affected area.

Slovakian scientist Michal Kravcik and his colleagues explain that the living world influences the climate mainly by regulating the water cycle and the huge energy flows linked to it. Transpiring plants, especially forests, work as a kind of biotic pump, causing humid air to be sucked out of the ocean and transferred to dry land. If the vegetation is removed from the land, this natural system of biosphere regulation is interrupted. Soil erodes, reducing the content of organic material in the ground, thus reducing its ability to hold water. Dry soil from lost vegetation traps solar heat, sharply increasing the local temperature and causing a reduction in precipitation over the affected area. This process also destroys the natural sequestration of carbon in the soil, leading to carbon loss.

Of course, these two factors are deeply related. Just as removing vegetation from an ecosystem will dry up the soil, so too will removing water from an ecosystem mean reduced or non-existent vegetation.

Taken together, these two factors are hastening the desertification of the planet, and intensifying global warming. Even if we successfully address and reverse greenhouse gas emissions and our dependence on fossil fuels, Kravcik says, we will not be able to stop climate change if we do not deal with the impact of our abuse of water on the planet.

Unless we collectively address the crisis of fresh water and our cavalier treatment of the world's water systems, we will not restore the climate to health.

Restoration of Watersheds

The solution to the water half of this crisis is the massive restoration of watersheds. Bring water back into parched landscapes. Return water that has disappeared by retaining as much rainwater as possible within the ecosystem so that water can permeate the soil, replenish groundwater systems, and return to the atmosphere to regulate temperatures and renew the hydrologic cycle. All human, industrial and agricultural activity must become part of this project, which could employ millions and alleviate poverty in the global South. Our cities must be ringed with green conservation zones and we must restore forests and wetlands - the lungs and kidneys of fresh water. For this to be successful, three basic laws of nature must be addressed.

1) It is necessary to create the conditions that allow rainwater to remain in local watersheds. This means restoring the natural spaces where rainwater can fall and where water can flow. Water retention can be carried out at all levels: roof gardens in family homes and office buildings; urban planning that allows rain and storm water to be captured and returned to the earth; water harvesting in food production; capturing daily water discharge and returning it clean to the land, not to the rising oceans.

2) We cannot continue to mine groundwater supplies at a rate greater than natural recharge. If we do, there will not be enough water for the next generation. Governments everywhere must undertake intensive research into their groundwater supplies and regulate groundwater takings before these underground reservoirs are gone. This may mean a shift in policy from export to domestic and local production.

3) We must stop polluting our surface and groundwater sources - and we must back up this intention with strict legislation. Water abuse in oil and methane gas production and in mining must stop. We must wean ourselves of industrial and chemical-based agricultural practices and listen to the many voices sounding the alarm about the rush toward water-guzzling bio fuel farming. We need to promote "subsidiarity," whereby national policies and international trade rules support local food production in order to protect the environment and promote local sustainable agriculture. Such policies also discourage the virtual trade in water. Countries should also limit or ban the mass movement of water by pipeline. Government investment in water and wastewater infrastructure would save huge volumes of water lost every day. Local laws could enforce water-harvesting practices at every level.

Toward a Water Secure World

Clearly, for this rescue plan to be successful, governments around the world must acknowledge the water crisis and the part the role water abuse plays in the warming (and drying) of the planet. This in turn means that a nation's water resources must be considered in every government policy at all levels. Nations must undertake intensive studies to ascertain the health of watersheds and groundwater reserves. All activities that will impact water must conform to a new ethic - backed by law - that protects water sources from pollution and over-pumping. This will likely mean a strong challenge to government policies that favour unlimited global economic growth.

Nearly two billion people live in water-stressed regions of the earth. Until now, the UN has addressed this terrible reality with a program to give them access to groundwater sources. But current levels of groundwater takings are unsustainable. To truly realize the universal right to water, and to protect water for nature's own uses, means a revolution in the way we treat the world's finite water resources. There is no time to lose.

This work is licensed under a Creative Commons License

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).

This Corruption in Washington is Smothering America's Future

Published on Friday, January 29, 2010 by The Independent/UK

How do you regulate banks effectively, if the Senate is owned by Wall Street?

by Johann Hari

This week, a disaster hit the United States, and the after-shocks will be shaking and breaking global politics for years. It did not grab the same press attention as the fall of liberal Kennedy-licking Massachusetts to a pick-up truck Republican, or President Obama's first State of the Union address, or the possible break-up of Brangelina and their United Nations of adopted infants. But it took the single biggest problem dragging American politics towards brutality and dysfunction - and made it much, much worse. Yet it also showed the only path that Obama can now take to salvage his Presidency.

For more than a century, the US has slowly put some limits - too few, too feeble - on how much corporations can bribe, bully or intimidate politicians. On Tuesday, they were burned away in one whoosh. The Supreme Court ruled that corporations can suddenly run political adverts during an election campaign - and there is absolutely no limit on how many, or how much they can spend. So if you anger the investment bankers by supporting legislation to break up the too-big-to-fail banks, you will smack into a wall of 24/7 ads exposing your every flaw. If you displease oil companies by supporting legislation to deal with global warming, you will now be hit by a tsunami of advertising saying you are opposed to jobs and the American Way. If you rile the defence contractors by opposing the gargantuan war budget, you will face a smear-campaign calling you Soft on Terror.

Representative Alan Grayson says: "It basically institutionalises and legalises bribery on the largest scale imaginable. Corporations will now be able to reward the politicians that play ball with them - and beat to death the politicians that don't... You won't even hear any more about the Senator from Kansas. It'll be the Senator from General Electric or the Senator from Microsoft."

To understand the impact this will have, you need to grasp how smaller sums of corporate money have already hijacked American democracy. Let's look at a case that is simple and immediate and every American can see in front of them: healthcare. The United States is the only major industrialised democracy that doesn't guarantee healthcare for all its citizens. The result is that, according to a detailed study by Harvard University, some 45,000 Americans die needlessly every year. That's equivalent to 15 9/11s every year, or two Haitian earthquakes every decade.

This isn't because the American people like it this way. Gallup has found in polls for a decade now that two-thirds believe the government should guarantee care for every American: they are as good and decent and concerned for each other as any European. No: it is because private insurance companies make a fortune today out of a system that doesn't cover the profit-less poor, and can turn away the sickest people as "uninsurable". So they pay for politicians to keep the system broken. They fund the election campaigns of politicians on both sides of the aisle and employ an army of lobbyists, and for their part those politicians veto any system that doesn't serve their paymasters.

Look for example at Joe Lieberman, the former Democratic candidate for Vice-President. He has taken $448,066 in campaign contributions
from private healthcare companies while his wife raked in $2m as one of their chief lobbyists, and he has blocked any attempt in the Senate to break the stranglehold of the health insurance companies and broaden coverage.

The US political system now operates within a corporate cage. If you want to run for office, you have to take corporate cash - and so you have to serve corporate interests. Corporations are often blatant in their corruption: it's not unusual for them to give to both competing candidates in a Senate race, to ensure all sides are indebted to them. It has reached the point that lobbyists now often write the country's laws. Not metaphorically; literally. The former Republican congressman Walter Jones spoke out in disgust in 2006 when he found that drug company lobbyists were actually authoring the words of the Medicare prescription bill, and puppet-politicians were simply nodding it through.

But what happens if politicians are serving the short-term profit-hunger of corporations, and not the public interest? You only have to look at the shuttered shops outside your window for the answer. The banks were rapidly deregulated from the Eighties through the Noughties because their lobbyists paid politicians on all sides, and demanded their payback in rolled-back rules and tossed-away laws. As Senator Dick Durbin says simply: "The banks own the Senate," so they had to obey.

It is this corruption that has prevented Barack Obama from achieving anything substantial in his first year in office. How do you re-regulate the banks, if the Senate is owned by Wall Street? How do you launch a rapid transition away from oil and coal to wind and solar, if the fossil fuel industry owns Congress? How do you break with a grab-the-oil foreign policy if Big Oil provides the invitation that gets you into the party of American politics?

His attempt at healthcare reform is dying because he thought he could only get through the Senate a system that the giant healthcare corporations and drug companies pre-approved. So he promised to keep the ban on bringing cheap drugs down from Canada, he pledged not to bargain over prices, and he dumped the idea of having a public option that would make sure ordinary Americans could actually afford it. The result was a Quasimodo healthcare proposal so feeble and misshapen that even the people of Massachusetts turned away in disgust.

Yet the corporations that caused this crisis are now being given yet more power. Bizarrely, the Supreme Court has decided that corporations are "persons", so they have the "right" to speak during elections. But corporations are not people. Should they have the right to bear arms, or to vote? It would make as much sense. They are a legal fiction, invented by the state - and they can be fairly regulated to stop them devouring their creator. This is the same Supreme Court that ruled that the detainees at Guantanomo Bay are not "persons" under the constitution deserving basic protections. A court that says a living breathing human is less of a "persons" than Lockheed Martin has gone badly awry.

Obama now faces two paths - the Clinton road, or the FDR highway. After he lost his healthcare battle, Clinton decided to serve the corporate interests totally. He is the one who carried out the biggest roll-back of banking laws, and saw the largest explosion of inequality since the 1920s. Some of Obama's advisers are now nudging him down that path: the appalling anti-Keynesian pledge for a spending freeze on social programmes for the next three years to pay down the deficit is one of their triumphs.

But there is another way. Franklin Roosevelt began his Presidency trying to appease corporate interests - but he faced huge uproar and disgust at home when it became clear this left ordinary Americans stranded. He switched course. He turned his anger on "the malefactors of great wealth" and bragged: "I welcome the hatred... of the economic royalists." He put in place tough regulations that prevented economic disaster and spiralling inequality for three generations.

There were rare flashes of what Franklin Delano Obama would look like in his reaction to the Supreme Court decision. He said: "It is a major victory for big oil, Wall Street banks, health insurance companies, and other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americas." But he has spent far more time coddling those interests than taking them on. The great pressure of strikes and protests put on FDR hasn't yet arisen from a public dissipated into hopelessness by an appalling media that convinces them they are powerless and should wait passively for a Messiah.

Very little positive change can happen in the US until they clear out the temple of American democracy. In the State of the Union, Obama spent one minute on this problem, and proposed restrictions on lobbyists - but that's only the tiniest of baby steps. He evaded the bigger issue. If Americans want a democratic system, they have to pay for it - and that means fair state funding for political candidates. Candidates are essential for the system to work: you may as well begrudge paying for the polling booths, or the lever you pull. At the same time, the Supreme Court needs to be confronted: when the court tried to stymie the new deal, FDR tried to pack it with justices on the side of the people. Obama needs to be pressured by Americans to be as radical in democratising the Land of the Fee (CRCT).

None of the crises facing us all - from the global banking system to global warming - can be dealt with if a tiny number of super-rich corporations have a veto over every inch of progress. If Obama funks this challenge, he may as well put the US government
on e-Bay - and sell it to the highest bidder. How would we spot the difference?

© 2010 The Independent

Johann Hari is a columnist for the London Independent. He has reported from Iraq, Israel/Palestine, the Congo, the Central African Republic, Venezuela, Peru and the US, and his journalism has appeared in publications all over the world. 

Obama Gets Bolder, Thank God!

by John Lawrence

President Obama has gotten bolder lately, and it's about time. He gave a "fighting" speech in Ohio recently. Then in a very audacious move he criticized the Supreme Court to their face at the State of the Union speech! He lambasted their recent decision allowing unlimited corporate money to flow into political campaigns including foreign money. Let's face it: the esteemed and erudite Supreme Court has turned into just a bunch of Republican political hacks, thanks to George W Bush appointments. Then yesterday Obama went to a Republican convention for a Q & A period in which he faced down the whole Republican party. Good on you Obama!

It's about time Obama and the Democrats faced down the Republicans who have been undeservedly casting aspersions on Obama for a year now. The Democrats need to get tough, and Obama is doing his part. Sure most of it is rhetorical, but the President cannot pass legislation. What else can he do except to wax rhetorical? He can also do executive orders, and I'd like to see more of that. Congress needs to take a cue from Obama and get tough too. The Democrats need to come up with a plan to pass health care reform without it being in the spotlight. The spotlight needs to be on jobs, but health care reform can't be abandoned after all the time and energy that has been committed to it. Probably the best course is for the House to pass the Senate version and then "fix it" through a reconciliation bill that would only require 51 votes in the Senate. The Democratic Congress needs to wield the political power it already has with large majorities in both Houses, despite the fact that it doesn't have a filibuster-proof Senate.

It's good to see Obama finally giving the Republicans a taste of their own medicine, declaring that he's a centrist while the Republicans are painting him as a Bolshevik. The reality is that Obama is a centrist. The perception, as cultivated by Republicans, is that Obama is an extreme radical. As Obama goes about changing the perception, he needs, nevertheless, to wield all the power of which he is capable to get his agenda passed in Congress. Otherwise the Democrats are toast in this year's elections. He needs to create jobs immediately and directly instead of waiting around for tax cuts and other Republican measures to take effect. Tax cuts just aren't going to do it. He needs both a WPA style program to hire young men, especially minorities who have more like a 25% unemployment rate, immediately, and he needs a fast track subcontracting program to rebuild American infrastructure and put in place a 21st century electrical grid. The Republicans want to back him into a corner over the deficit. When it comes to directly creating jobs though, going deeper into debt is completely justified and will not only get the economy going again but will create the infrastructure necessary for future sustained development.

Why does what FDR did now qualify as a Bolshevist plot? Obama needs to bring back the spirit of FDR and take some of the bold steps he took. But then he had a Congress that backed him up. Obama's dilemma is how to get Congress to use its political power to back up his plans. So far the Republicans have been successful in whittling down, delaying or stalling any Democratic initiatives. The Democrats need to stop this nonsense or they're lost. They can kiss the 2010 poltical elections good-bye. It doesn't matter if the 4th quarter GDP looked good if there's a 10% unemployment rate. Just because the other 90% upped their purchases does not mean that the economy has rebounded. Obama has to do something about the other 10%, and he needs to do it directly and now and not wait for "lagging indicators" to catch up. This amounts to frittering away precious time, time the Republicans are only too happy to watch being frittered away as they do their part to delay any political action that they can delay. The time for Obama and the Congressional Democrats to act is now. Let's see some bold Congressional action on the jobs front to match Obama's bolder rhetoric.

Obama Needs To Teach The Public How to Get Out Of The Mess We're In, But He's Not

by Robert Reich

Thursday, January 28, 2010

The President wants businesses that hire new employees this year to get $5,000 per hire, in the form of a tax credit. That will come to about $33 billion. It’s good step. He’s also supporting a cut in the capital gains tax for small businesses. That makes sense; after all, small businesses generate most jobs.

But here’s the problem. Both of these measures, and many of the other tax cuts he’s proposing, give ammunition to supply-siders who think the way out of this awful economy is simply to cut taxes on businesses. If a new jobs tax credit is a good idea, why not a cut corporate in income taxes? If it’s useful to reduce capital gains taxes for small businesses, why isn’t it useful to reduce them for all businesses?

The answer, of course, is that across-the-board supply-side tax cuts for businesses don’t increase the demand for the things businesses produce. They’re useful only to the extent businesses are confident consumers are out there, able and willing to buy. Carefully targeted — as are the cuts the President is proposing — they can give businesses an extra nudge to hire. But without adequate demand, they’re useless.

So what’s the President’s new proposal for boosting overall demand? Hmmm. Turns out, he’s not really proposing anything new on that score. (Some who watched his State of the Union the other night thought they heard him call for a second stimulus. Actually, he didn’t, and as far as I can tell he doesn’t plan to.) His political advisors are telling him to emphasize deficit reduction instead. And that’s what he did Wednesday night when he talked about a “freeze” on discretionary spending, and a “commission” to look for ways to cut the deficit. 

I can understand why Obama’s political advisors are pushing him in this direction. Many Americans borrowed too much during the boom years before the Great Depression, and now they’re paying the price. So they naturally analogize their own plight to that of the federal government and the economy as a whole. The government is too deep in debt, they reason. Logically, that means the only way out of the nation’s economic doldrums is for the government to mend its ways. The government has to reduce its budget deficit just like American families have to reduce theirs.  

This analogy is faulty, of course. If John Maynard Keyenes taught us anything, it’s that a federal budget is not at all like a family budget. In fact, it’s precisely because families have to pull in their belts that the federal government has to let its belt out. When consumers and businesses aren’t buying much of anything, the government has to fill the gap. That’s the only way to get jobs and get the economy moving again. Once the economy is percolating, the government can pull back. By then, tax revenues will soar, and the long-term deficit will shrink. (And yes, entitlement reform is probably necessary in the long term. But here again, it’s vitally important to separate the long term from the now.) 

But if the public learns the wrong set of lessons — that tax cuts for businesses are good, and deficit reduction starting now is good — there’s no hope for getting wise policies out of Congress. The debate is framed all wrong.

The President — any president — is the nation’s educator in chief. Everything he proposes contains an implicit lesson. The economic lesson President Obama ought to be teaching is that targeted tax cuts, mostly for small business, are good to the extent they give businesses a nudge toward creating more jobs. But businesses won’t begin to create lots of jobs until they have lots of customers. And that won’t happen until lots more Americans have work. The only way to get them work when businesses aren’t hiring is for government to prime the pump.

One final lesson I wish he’d teach: The best and fastest way for government to prime the pump is to help states and locales, which are now doing the opposite. They’re laying off teachers, police officers, social workers, health-care workers, and many more who provide vital public services. And they’re increasing taxes and fees. They have no choice. State constititions require them to balance their budgets. But the result is to negate much of what the federal government has tried to do with its stimulus to date.

We need a second stimulus directed at states and locales. I wish our educator-in-chief would say that loud and clear, explain why, and then do it.

Frank Thomas on Republican Propaganda

John,

As you know, in 2008-09 I charted the historical federal
Tax/Revenue/Household Income results and national Debt buildup of
former Presidents beginning with Johnson. This time I want to go into
the historical Federal Budget figures (and Harvard -Economist Kenneth
Rogoff's vast data base) again to show other problems of. e.g.,  Tax
Revenues lagging Spending;  effect of decline in Savings on Deficits,
government and household Debt buildup;  relative growth in
expenditures by type to highlight problems of costs out-of-control
(i.e., Medicare, Defense) vs. too little expenditures on societal
improvements (i.e., education, infrastructure, etc.).

The Republicans keep saying over and over, "The Democrats think
government can do everything or the federal government is trying to do
too much .... which translates into standard party critique of
Democrats as the party of High Taxes and Big Government." More
analysis may indicate that the primary place where our government is
"Big" is in Defense and that government for a long time has actually
done relatively very little for other basic societal needs such as
infrastructure, education, health care, energy independence,
environment. This incessant hogwash of government being the problem,
not the solution -- rather than focusing intelligently and
bipartisanly on "What are we doing in a sustainable way with resources
that we are borrowing from the rest of the world"-- has been going on
ad infinitum by Republicans with no effectiive countering by
Democrats. The result is a sabotage of good governance on behalf of
ALL Americans.

Obama inherited a systemically dysfunctional governmental situation
bordering on bankruptcy. His driving mission was to end the old,
repeated "cultural wars" going on for over 3 decades now. He soon
found himself body and soul caught in the reality trenches of a
blistering polarization between neo-conservative populism and
classical progressive liberalism -- the latter so wimpy without a
consistent philosophy and conveniently caving into a chameleon
do-nothing  conservative liberalism. Obama has been blind to the fact
that Republicans from the start have had no intention of giving him
the chance to play his ideal bridge-building role to achieve the real
reforms drastically needed.

From a distance, I've watched the Republicans and conservative media
effectively spout out the same propagandistic one-liners for ages now.
The brainwashing undermines any constructive common sense to exploit
the best of conservative and liberal principles to advance the common
interests of all Americans. The same old sly, deceptive dogma and
political paralysis that got us in our social-economic Mess was
evident in the Republicans media conference after Obama's speech ....
where the time-worn central themes were repeated:  "small government,
less spending, lower taxes, lighter regulation."

The Republican elitists were also in evidence during Obama's address.
There was complete silence by Republicans when Obama reminded everyone
of the tax cuts contained in the stimulus plan for 95% of working
families. In contrast, Republicans gave a united standing applause and
high fives to each other when Obama mentioned cutting capital gains
taxes for small businesses. There was also a Republican silence in
response to Obama's mentioning of "freezing discretionary
expenditures" for three years .... a stringent financial policy
favorite of Republicans that can also restrain job growth. But no
matter, better to spend less and be ideologically pure than to do the
right thing, i.e., control spending for sustainable short and
long-term job development. Better also to cut taxes and be
ideologically conservative pure even though that could well add to
current $1.3 trillion federal budget shortfall .... like it did for
many states whose deficits combined with unwilligness to raise taxes
-- EXCEPT for recent magnificent common sense of Oregon's citizens to
raise taxes -- are forcing them to cut police, firemen, teachers,
civil servants, etc. Ideological purity stumps common sense when we
fail to recognize that losing a job is not only a devastating blow to
the person concerned,  but also a harmful blow to the community. With
fewer people producing goods and services, there is less to go around.

That's called human and constructive common sense!
Best,
Frank
2010/1/29

Elizabeth Warren Goes to Bat for the Consumer Financial Protection Agency

AlterNet / By Zach Carter January 28, 2010 

 

Elizabeth Warren on the Great Economic Battlefield: Protecting the Middle Class from Financial Predators

 

A new Consumer Financial Protection Agency can save the middle class. Elizabeth Warren explains how. 
  

 

For years, federal banking regulators at the Office of Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Reserve helped the nation's largest banks wage war on the U.S. middle class. But President Barack Obama wants to change all that with a new regulator that answers exclusively to consumers, not bank balance sheets. AlterNet economics editor Zach Carter discussed the proposal to establish a Consumer Financial Protection Agency (CFPA) with the woman who came up with the idea, Harvard University Law School Professor Elizabeth Warren. After defending the American middle class for decades, Warrant currently chairs the Congressional Oversight Panel for the Troubled Asset Relief Program.

 

Zach Carter: How did the existing federal bank regulators facilitate today's economic crisis, and how can a CFPA help?

 

Elizabeth Warren: The big arc of the story is that 30 years ago we had laws that put some basic fairness into the consumer credit market.  Over time, the large financial institutions captured the regulators who were supposed to be the cops on the beat to enforce those laws. They also pumped hundreds of millions of dollars into Washington to make sure that no new cops were put on the beat. Without good laws, the industry started selling ever-more-deceptive products, and their friendly regulators looked the other way.

For example, when a dispute arose between a consumer and a bank, the regulator consistently chose the side of the banks.  This was particularly true with the OCC.

 

ZC: The federal regulators even joined the bank lobby to file lawsuits, didn't they?

 

EW: They filed lawsuits to protect the banks because the banks needed the help of the government against those big, tough customers. Right? So, they kept pushing more and more deceptive products, and they ultimately destabilized not just the American family, but the entire American economy. Once the economy crashed, the industry demanded bailouts from the taxpayer. So now we're writing the final chapter of this story. And the final chapter is about who is in control moving forward. Will the banks continue to select their own regulators and write their own rules? Or will there be someone in Washington who wants to look out for consumers and who will be accountable to them?

 

ZC: So the regulators go from being cops, or enforcement agencies, to being something very close to lobbyists and advocates for the banking industry, particularly the large banks.

 

EW: They went from being cops to being the lookout driver. They stand out in front while the banks fleece their customers. And time and again, the regulators believed it was their job to defend and support the banks against customers.

 

ZC: The bank lobby has made the CFPA their top target since President Obama rolled out the proposal for it back in June. What are the banks so afraid of?

 

EW: That's right. In fact, I think their language was that they intended to "kill" it. The new agency would put an honest cop back on the beat. That's all. And that's what's so amazing. Think about this. The agency wouldn't have much more power than the Fed or the OCC currently has over credit cards, home mortgages and other consumer loans. The difference is that the consumer agency would be an honest cop. It would be an agency headed by someone who cares about consumers and who would be accountable to the people if consumers were being taken advantage of.

 

ZC: So what are the crucial provisions that need to be passed? 

 

EW: Independence is at the heart of the proposal. It's not that we need some specific new rule, it's that we need an independent agency to write and enforce the rules that cares about consumers, not just bank profits.

 

ZC: The CFPA portion of the financial reform bill took some pretty significant blows as it moved through the House Financial Services Committee. They cut a provision that would have required any bank offering complex loans to offer a 'plain-vanilla' loan alongside it, and exempted the 8,000 out of 8,200 banks from CFPA enforcement. How damaging are those revisions?

 

EW: The small banks were exempted from primary enforcement, but the agency would continue to have secondary enforcement power over them. And they would still be subject to all the same rules. The rule writing authority applies to everyone. The CFPA would also still be the primary enforcer against big banks and the non-bank lenders—the mortgage brokers and the other folks who operate at the state level and not at the national level. But for community banks, the consumer agency would sit shotgun with the safety and soundness regulator, they wouldn't be totally excluded from the process.

 

ZC: But isn't enforcement the key here? We've had some decent rules on the books for a while that could have prevented a lot of damage if the existing regulators had enforced them.

 

EW: Enforcement is central, there's no doubt about it. But there are two points I want to make about enforcement. The first one has to do with concentration of resources. The worst actors in the consumer financial space have been the big banks on one end and the unlicensed, unregulated, non-banks like mortgage brokers and installment loan brokers on the other end. That's where the major abuses have been and that's where the enforcement effort should be concentrated. Community banks need to follow the same set of rules, as there’s no reason that the rules themselves should vary depending on whether a mortgage is issued by a big bank, a small bank or a mortgage broker. But for enforcement purposes, the community banks don't pose as much risk. And the CFPA would still have back-up authority under the House bill.

The amendment that bothers me a lot more is the exception for car dealers when they act as loan brokers. The House bill would let them cheat their customers without any supervision from the new agency. And the notion that car dealers are more trustworthy than anyone else in business is a little surprising to me. But this was just naked interest group politics.

 

ZC: I want to ask you some broad economic questions about the American consumer. About a third of all mortgages are underwater right now. The conventional wisdom is that the banks are healthy again, which is why they can pay out these giant bonuses. But we still have a major problem in residential real estate that is putting pressure on consumer pocketbooks. Is there any way to avoid a catastrophe without easing the pain for American households? 

 

EW: No, we cannot repair this economy without repairing the finances of American families. American families have taken on extraordinary debt levels, they have suffered through slack wages at best, and for one in six now, there's no paycheck at all.

But the American working class and middle class have been under assault since the 1970s. When this latest crisis hit, they were already staggering. The recession just knocked down millions more of them. Families usually push ahead during boom times and fall behind in recessions. For example, income tends to go up in booms and then flattens out or maybe even declines a small amount in recession. But when you add up booms and you add up busts, the American family is usually still getting ahead over time. But the boom of 2000 yielded nothing to the American family except more debt. There was no jump in income for the middle class that we saw in earlier booms. Instead, all of the wealth creation was funneled to a tiny little group at the top of the spectrum.  

 

ZC: A lot of those people at the top work in the financial sector, which is supposed to help everyone prosper by greasing the wheels of business and commerce. But has the financial sector been scoring its profits by cutting away from the middle class instead of helping it grow?

 

EW: That's exactly the point. The American middle class became the turkey at the Thanksgiving dinner. It's not only that they didn't get a seat at the table, they were served on a platter. They fed those who got rich during the boom. And so that means it's a much more fragile middle class even before the economy implodes.

Under the old social contract, the rich got richer, but so did the middle class. We always had the problem of the poor being left behind, but the middle at least participated in the prosperity and expanded. Look at those graphs from the '40s, the '50s, the '60s and into the '70s and you'll see that as worker productivity goes up, so does inflation adjusted wages. The pie is expanding, but the workers are getting a bigger piece of pie to eat every day, right? But they begin to diverge in the '80s.  And the wages of a fully employed male in the 2000s are slightly less than a fully employed male was making at the end of the '70s.

 

ZC: Does the president get it? 

 

EW: I think he understands this. And I was so heartened this week when he said, "I'm not giving up on a consumer agency, that's non-negotiable. I will stand and fight, right here." That means a lot.

 

Zach Carter is an economics editor for AlterNet. He writes a weekly blog on the economy for The Media Consortium, and his work has been featured in The Nation, Mother Jones, The American Prospect and Salon.

State of the Union: Why Is Obama Still Clinging to Bipartisanship?

By John Nichols  January 27, 2010

Obama restated 2008 campaign promises that were not kept during his first year as president. It's unclear how he can make good on them in 2010 working with Republicans. 

But don't accuse the president of veering from the course he charted at a point when his term was new, his popularity ratings were high and Americans took seriously all that talk of "hope" and "change."

Despite the battering he has taken during his first year in the White House, despite suffering a serious drop in his personal approval ratings, despite the frustration and disenchantment that gave the Senate seat from the deep blue state of Massachusetts to the opposition Republicans, Obama used his initial State of the Union address to renew the call for the health care reform initiative that was the primary focus of his difficult first year in office.

"Don't walk away from reform -- not now, not when we are so close," the president pleaded with the Congress.

"By the time I'm finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Co-pays will go up. Patients will be denied the care they need. Small business owners will continue to drop coverage altogether," he declared, in the signature line of his speech. "I will not walk away from these Americans. And neither should the people in this chamber."

The president admitted that he bumbled the push for health reform, even drawing warm laughter when he said: "I did not choose to tackle this issue to get some legislative victory under my belt. And by now it should be fairly obvious that I didn't take on health care because it was good politics. But remember this-- I never suggested that change would be easy, or that I can do it alone."

He also acknowledged that his first year in office was a tough one: "I campaigned on the promise of change -- change we can believe in, the slogan went. And right now, I know there are many Americans who aren't sure if they still believe we can change -- or at least, that I can deliver it."

Yet, Obama still did not seem to "get" the politics of the moment.

Speaking at a point when the year-long effort to enact fundamental health-care reforms has stumbled badly -- in the face of united Republican opposition, wrangling between House and Senate Democrats and unfocused messaging from the president -- Obama made a renewed effort to find the common ground that has eluded almost everyone in Washington.

Remarkably, the president clung to the hope for bipartisanship that was dashed at every turn in 2009 -- either with outright rejection by the "party of 'no'" or, worse yet, via compromises that handed ultimate authority over policy-making to Republican senators who diverted stimulus funding from job creation to tax cuts for the rich and Democrat-In-Name-Only Ben Nelson and Republican-In-Everything-But-Name Joe Lieberman, who forced the Senate to scrap the public option that was needed to challenge the grip of health insurance companies.

"We face big and difficult challenges. And what the American people hope what they deserve -- is for all of us, Democrats and Republicans, to work through our differences; to overcome the numbing weight of our politics," said the president, whose repeated references to bipartisanship made clear that he is not ready to adopt the fighting stance that might rally the Democratic base for a serious fight to use the party's majorities in the House and Senate to initiate meaningful reforms.

This was not a rally-the-base speech.

It was a speech that, at many turns, sounded as if it was written a year ago -- before Obama saw his domestic agenda blocked at so many turns.

It was this tone-deaf quality that made Obama's speech a less-than-inspired statement.

Even when Obama outlined what sounded like an activist agenda, he generally restated 2008 campaign promises that were not kept during his first year as president.

In particular:

* To suggest a commitment to job creation, he dusted off one of his presidential campaign's less-impressive position papers on using tax cuts to get small businesses hiring. In particular, the president called for eliminating capital-gains taxes on investments in small businesses and for giving small employers a tax credit for new hires.

* He repeated old promises to create clean-energy jobs and to end aid to businesses that are off-shoring jobs and facilities.

* Even as said "we all hated the bank bailout" ("it's about as popular as a root canal"), Obama defended the giveaway to big banks as a necessary, even courageous, move. And he only offered up a little of the populism that should have defined the speech, with a proposal to recover bailout bucks by placing a fee on the biggest banks. "I know Wall Street isn't keen on this idea," he declared, "but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need."

* He announced, "It's time to get serious about financial reform." But the details were missing.

* He called for the repeal of the military's "don't ask, don't tell" policy, which discriminates against openly gay and lesbian people who want to serve in the military by requiring their discharge if they tell fellow service members about their sexuality. But he still left the issue to Congress, eschewing calls for him to act as commander-in-chief and simply issue an executive order.

Obama seemed throughout the speech to be struggling to balance an understanding of the need for activist government -- especially in the struggle to reduce a brutal double-digit unemployment rate -- with a political calculation that he must mouth empty rhetoric about cutting taxes, capping spending and fretting about deficits. (Obama made his call for a freeze on domestic spending but drew giggles from all sides when he said it would not be implemented until next year.)

The result was an address that, at too many turns, seemed either tepid or numbingly predictable -- and that at other turns was just plain wrong ("we need a new generation of safe, clean nuclear power plants.") The president still hasn't figured out that bragging about the success of last year's stimulus bill cannot trump the fact that unemployment is two percentage points higher than was promised at the time the measure was enacted. He doesn't seem to recognize that his own party has abandoned the cap-and-trade initiatives he mentioned ever so briefly Wednesday night. And his "I'm for free trade, er, no, I'm for fair trade, er, no, free trade, er, no fair trade" line was so deliberately vapid as to be insulting.

So it was that the highlight of the speech was not the renewed call for health-care reform or the new talk of economic renewal.

It was his cry for real reform of our politics, even in the face of the Supreme Court's decision, in the case of Citizens United v. FEC, to let corporations buy elections.

"(It's) time to put strict limits on the contributions that lobbyists give to candidates for federal office. Last week, the Supreme Court reversed a century of law to open the floodgates for special interests –- including foreign companies –- to spend without limit in our elections," Obama told the Congress. "Well I don't think American elections should be bankrolled by America's most powerful interests, and worse, by foreign entities. They should be decided by the American people, and that's why I'm urging Democrats and Republicans to pass a bill that helps to right this wrong."

The president's message on campaign reform was right.

But it should have been more muscular, more central to the overall statement.

The president should have made the Supreme Court's lawless decision the focus of his speech -- as part of a broader riff on what's wrong with Washington. But he didn't go for it.

And that's the bottom line. In his first State of the Union address, the president should have gone for it. But he pulled a few too many punches, sounded a little too many old themes and fell a little too short of the mark.

This was not a bad speech. Obama can't really give a bad speech.

But nor was it a game-changing address. Rather, it was the statement of a man who is not quite ready to abandon the goals or the preconceived notions with which he began his presidency. If consistency is a virtue, then this was a virtuous speech. But if consistency has its risks, especially in the face of changing circumstances, then this was a very risky speech.

Instead of rallying the base, President Obama chose to preach the gospel of bipartisanship. Instead of offering America a bold new agenda, or at least an edgier style, the president chose to recall old themes. Instead of accepting that the approaches of 2009 did not work, the president signaled that they will be repeated in 2010.

John Nichols is The Nation's Washington correspondent.

Democrats Should Get Tough on Their Own Members

by John Lawrence

Obama's State of the Union Speech last night was good, but it will take more than speeches to actually get done the good things he talked about. It's all well and good to make believe that we all want to work together, Republicans and Democrats alike, for the betterment of the American people and to make the US a strong, vibrant nation except it's not true, that's all. The Republicans will not vote for one iota of the Democrats' agenda. They will filibuster every bill, every vote. The political and philosophiocal divide between the two parties is such that there is no overlap between them, no common ground, at all. They are in two separate worlds. It's time the Democrats realize that and not pretend otherwise.

More than that, the Republicans, a minority in both Houses and lacking the Presidency, are in the position of running the government. How? They stick together, have absolute party discipline and unity and filibuster every Democratic bill. This magnifies their political power and diminishes that of the Democrats. The Democrats should take a page out of their book. What do you think woulld happen if one Republican decided to vote one time with the Democrats? Why they'd hound him out of the party. They'd withdraw all support, financial and otherwise. They'd run another more "conservative" Republican against him in the next primary. In other words they'd get rid of him. Because of this discipline they have magnified their political power to the point that, thanks to the filibuster rule, they effectively run the government as a minority.

But now let's consider the Democrats. You've got a minority of Democratic members of Congress, the so-called Blue Dogs, who are just as likely to vote with the Republicans as with the Democrats. Part of what has ticked off the American people is the unseemly horse trading that went on over the health reform bill when the Democrats had to buy the votes of members of their own party. They agreed to financially support Ben Nelson's state with Medicaid in perpetuity. They also bought off Mary Landrieu. Having to buy off members of their own party weakens the Democrats considerably. Horse trading used to be used to buy the votes of the other party. While the Republicans stick together, the Democrats cannot even count on members of their own party! Well, they say they're a "Big Tent" party, they welcome diverse views and getting Democrats together is like "herding cats." Nonsense! They are totally weakening themselves and shooting themselves in the foot unless they do use their political power effectively, and that means having party discipline and unity. Otherwise, the Republicans will run the government even as a minority.

The Democrats need to get hip to the fact that, unless they get tough with their own members, they are never going to get their agenda through, and this makes them look ineffectual and ridiculous. They need to threaten recalcitrant Democrats the way the Republicans threaten recalcitrant members of their party. They need to make it unthinkable that a Democrat would ever not vote the party line just like the Republicans do. Otherwise, they are frittering away their political power, accomplishing nothing, enervating themselves and setting themselves up for defeat. And in particular, since they don't have a filibuster-proof Senate any more, they need to use reconciliation or the nuclear option to get anything passed. But they won't do it. Why? Because the Blue Dogs won't go along! The only way the majority party will be able to get anything done is if the majority party uses those techniques and maneuvers necessary to pass their legislation. But the majority party won't get anything done because of the members of their own party who won't vote with the majority of members of their own party. You know, this is really sickening. It's sickening enough that Republicans will not go along with the President when it comes to measures taken to ameliorate the plight of the American People. It's even more sickening that Democratic recalcitrants will vitiate and undermine the agenda of their own party and their own President.

Ben Nelson, Mary Landrieu and others should be kicked out of the Democratic party. The Democrats should run other Democrats against them in the next primary. They should enforce party discipline the way the Republicans do. It's all well and good to pass wonderful legislation in the House and for the President to talk about all the wonderful things he wants to for for the American people, but it's all spinning their wheels and whistling Dixie unless they can get it through the Senate and they're deluding themselves if they don't think that the Republicans will filibuster everything they propose, every bill. Or they will tie it up with delays the way they did with health reform making the Democrats look even more ridiculous. If they appeal to Republicans' better instincts, it will get them nowhere. That should be obvious by now if it wasn't from the outset. Appealing to the Republicans for that one vote that would break the filibuster is totally useless. Look at all the time and energy wasted on Olympia Snowe. You'd think you could get the vote of a nice woman from Maine. No way. When  it came right down to it, she stuck with her party. The Democrats are in the process of making themselves completely impotent, ineffectual, irrelevant and useless unless they confront this political fact: they need to get rid of or politically neutralize the filibuster rule. It should be job #1. They can't be afraid to use political power effectively. They still have large majorities in both Houses, yet they are intimidated by Republicans.

The Democrats talk nice and try to appeal to people's better instincts, but that has gotten them nowhere. To continue down that road is a big waste of time at this point and will just guarantee defeat in the next election. The Republican strategy has been for years to spend the country into oblivion so that, when the Democrats came to power, they would not be able to enact any social programs. To yield to them now over the deficit is just falling into the trap the Republicans have set for them. Obama's freeze on discretionary spending is just that. It accomplishes practically nothing. It's a sop thrown to the Republicans in the hopes that some of them will go along with him as he proceeds with his agenda. Instead he should delineate very clearly the difference in philosophies of the two parties. Under normal circumstance, deficit reduction is a good thing, but when in the last 30 years have the Republicans done it? No, they've lowered taxes and raised deficits instead. He did point out in his speech that George W Bush, although he didn't mention him by name, had run up the deficit by lowering taxes, fighting two unfunded wars and passing into law an unfunded drug benefit for seniors. He needs to keep harping on the fact that the Republicans have spent the US into such debt that in times such as these, times of the Great Recession, there is no way of getting the economy moving again except to take on even more debt. In effect the Republicans and their policies have backed the country into a corner.

The Democrats need to get something accomplished this year especially with regard to the one issue that's on the minds of the American people: jobs. The Republicans are dead set and determined to make the Democrats fail so they can take back majorities in the House and Senate. They're only concerned about poltical power, their own careers and the revolving door of personal enrichment. The Democrats should be under no illusions. Trying to be nice to Republicans is a policy doomed to failure. Being intimidated by the Republicans, heading for the hills, not only will doom them to failure but will let down the American people who so desperately need their help. They need to stand and fight, not just rhetorically, but in terms of the practical political steps they must take to wield political power effectively. Gridlock in the US political system is self defeating not only for Democrats but for the American people. We need the Democrats to use their political power effectively. This means attacking the filibuster rule and, until that is carried out successfully, using reconcilation to get legislation passed.

Oregon Raises Taxes on Rich To Close Budget Gap

Public Is Ready to Raise Taxes on Corporations and the Rich, Oregon Vote Shows

by Joshua Holland

Massachusetts voters weren't alone in "sending a message" to their elected officials.

January 27, 2010   

 

 

Conservatives have been crowing loudly about their victory in last week’s special election in Massachusetts, but voters in Oregon also “sent a message,” when? approving two measures that imposed progressive taxes on earners making more than $250,000 per year and on large corporations. 

The measures are expected to raise the $733 million dollars needed to close the state’s budget gap. The measures -- 66 and 67 -- passed by a decisive 54-46 margin. According to The Oregonian, “the results triggered waves of relief from educators and legislative leaders, who were facing an estimated $727 million shortfall in the current two-year budget if the measures failed.” 

Until measure 67 raised the minimum corporate tax to $150 per year, most companies operating in Oregon paid only $10 per year into the state coffers. Under 67, only 10,000 of the state’s 34,000 corporations will pay more than the minimum. Measure 66 will increase taxes for 38,000 of Oregon’s wealthier households, while giving a tax break to 270,000 jobless Oregonians. 

The results are eye-opening, given that Oregon has long been a incubator for the corporate-backed anti-tax movement. Oregon voters hadn’t approved a tax increase since 1930. In the 1970s, voters in one Oregon municipality voted down an education tax four times, resulting in schools remaining closed at the end of the summer holiday. In the 1990s, Oregonians passed two measures that required an esoteric “double-majority” to pass many local tax measures. In 2007, a well-funded campaign run by Freedomworks, the Wall Street front group that helped launch the “Tea Party” movement, and heavily financed by Big Tobacco, successfully killed a cigarette tax hike that was slated to finance health insurance for Oregon’s poorest children. The “Healthy Kids Program” died an untimely death, and 100,000 of the state’s neediest children suffered the consequences. 

The same coalition worked overtime to kill props 66 and 67. When the measures were first proposed by Oregon Dems last year, an editorial in The Oregonian -- whose publisher played a key roll in the state’s anti-tax movement -- wrote that “Democrats have rolled the dice in a big way … gambling that Oregon has undergone a profound political change since the days of property tax limits and income tax rejections.” That gamble appears to have paid off. 

Congress Ponders Reconciliation

Hoyer: House And Senate Discussing Reconciliation For Health Care

Published in Huffington Post First Posted: 01-26-10 12:27 PM   |   Updated: 01-26-10 03:20 PM

Laying out the way forward on health care reform Tuesday, House Majority Leader Steny Hoyer (D-Md.) confirmed that Congress and the White House are discussing the use of reconciliation to "correct" the Senate legislation with a supplemental bill that would require only a simple majority in the upper chamber.

Senate Majority Leader Harry Reid (D-Nev.) avoided using that particular parliamentary tactic for health care last year, partly because reconciliation bars the inclusion of policy provisions that don't affect overall cost. But since the Senate has already passed the fundamental health reform bill, reconciliation could be used to fast-track a bill that simply amends cost provisions in the existing legislation -- if the House votes to pass the main Senate bill as is. The alternative, crafting a compromise bill in conference, would require 60 votes in the Senate again.

The reconciliation proposal has gained serious attention in the week since Senate Democrats lost their filibuster-proof supermajority with the election of Scott Brown to Ted Kennedy's former seat. At his weekly press briefing Tuesday, Hoyer said the use of a supplemental health reform bill is "certainly" one of the top four options being considered.

"The last option that's being discussed is to try to correct the Senate bill with a majority vote in both the House and the Senate and then pass the Senate bill as corrected or pass the Senate bill with the understanding that it will be corrected by another piece of legislation," Hoyer said. The other three options he listed were: giving up on health care entirely; passing a "lesser form" of reform; and rubber-stamping the Senate bill with no supplemental. "There may be other options, but those are certainly four that have been discussed," Hoyer said.

And of the four options Hoyer listed, he only gave serious credence to reconciliation. The majority leader made headlines earlier Tuesday at the National Press Club for admitting that abandoning health reform was one possibility Democrats had discussed, but he said at the press briefing that it's not being strongly considered. "I don't think most of us believe that's an option given the challenge that confronts our citizens, individually and as families, as businesses," he said at the press briefing. "I think you won't find a member who will say we ought not to do anything, just drop it and turn away."

He wasn't much more enthusiastic about the second option, "to try to do some lesser form of the bill." This would most likely entail a bill that retains nominal consumer protections but doesn't expand coverage. That would not meet the core Democratic objective of increased affordability, Hoyer said, for which "you've got to have an expansion of the pool of insureds."

And like House Speaker Nancy Pelosi (D-Calif.), Hoyer said the House won't just rubber-stamp the Senate bill. "I don't think that's a very viable option, I think the Speaker's right that we don't have the votes on the House floor for the Senate bill," he said.

That's not to say reconciliation is a done deal. "Frankly, we're trying to figure out what's possible," Hoyer said.

The White House remains an active part of ongoing negotiations, but Hoyer said he doesn't expect President Obama's State of the Union address to feature any process-related talk on health care reform. "I would be surprised if he says specifically how he hopes to get health care done," he said.

Obama Liquidates Himself

by Paul Krugman

January 26, 2010

A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?

It’s appalling on every level.

It’s bad economics, depressing demand when the economy is still suffering from mass unemployment. Jonathan Zasloff writes that Obama seems to have decided to fire Tim Geithner and replace him with “the rotting corpse of Andrew Mellon” (Mellon was Herbert Hoover’s Treasury Secretary, who according to Hoover told him to “liquidate the workers, liquidate the farmers, purge the rottenness”.)

It’s bad long-run fiscal policy, shifting attention away from the essential need to reform health care and focusing on small change instead.

And it’s a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008. A correspondent writes, “I feel like an idiot for supporting this guy.”

Now, I still cling to a fantasy: maybe, just possibly, Obama is going to tie his spending freeze to something that would actually help the economy, like an employment tax credit. (No, trivial tax breaks don’t count). There has, however, been no hint of anything like that in the reports so far. Right now, this looks like pure disaster.

Left Pans Obama Spending Freeze

By ANDY BARR | 1/26/10 3:44 PM EST

Liberals expressed widespread disappointment Tuesday over President Barack Obama’s call for a three-year freeze on non-defense, discretionary spending.

The move, which Obama intends to announce during his State of the Union address to a joint session of Congress on Wednesday night — is designed to politically blunt populist attacks against the deeply unpopular $787 billion economic stimulus program and bailouts of the financial and auto industries.

“A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback? It’s appalling on every level,” blogged New York Times columnist Paul Krugman, a Nobel Prize-winning economist.

Krugman, once a stalwart defender of the president who has only recently turned critical, said a freeze would be “a betrayal of everything Obama’s supporters thought they were working for.”

“Just like that, Obama has embraced and validated the Republican world-view — and more specifically, he has embraced the policy ideas of the man he defeated in 2008,” Krugman added.

MSNBC host Rachel Maddow called the plan “completely, completely insane.”

Paul Rosenberg of the liberal blog Open Left described the move as a clear sign that Obama is “an idiot,” doomed to repeat the causes of the Great Depression.

“After passing a stimulus that most economists (not just liberal ones) said was too small, and that was made even more inadequate by being heavily tilted toward poor-performing tax-cuts, Obama is now intentionally recreating [President Franklin D. Roosevelt's] mistake of 1937, when he prematurely cut back spending to try to balance the budget and sent the country into a new recession,” Rosenberg wrote.

And he was just one of many progressive pundits to compare the White House’s latest economic move to mistakes made during the Great Depression. 

Prominent economist Brad DeLong of the University of California at Berkeley took to his blog to express fear that Obama was repeating the missteps of President Herbert Hoover, widely blamed in academic circles for not aggressively trying to fight the forces that caused the worldwide economic collapse that lasted from 1929 until the start of the World War II.

Read more: http://www.politico.com/news/stories/0110/32033.html#ixzz0dp5xLL0U

Obama Whistling Dixie on Jobs

Obama's Tiny Jobs Ideas for Main Street, A Big Spending Freeze for Wall Street

by Robert Reich
Monday, January 25, 2010

President Obama today offered a set of proposals for helping America’s troubled middle class. All are sensible and worthwhile. But none will bring jobs back. And Americans could be forgiven for wondering how the President plans to enact any of these ideas anyway, when he can no longer muster 60 votes in the Senate.

The bigger news is Obama is planning a three-year budget freeze on a big chunk of discretionary spending. Wall Street is delighted. But it means Main Street is in worse trouble than ever.

A pending freeze will make it even harder to get jobs back because government is the last spender around. Consumers have pulled back, investors won’t do much until they know consumers are out there, and exports are miniscule.

In December 1994, Bill Clinton proposed a so-called “middle class bill of rights” including more tax credits for families with children, expanded retirement accounts, and tax-deductible college tuition. Clinton had lost his battle for health care reform. Even worse, by that time the Dems had lost the House and Senate. Washington was riding a huge anti-incumbent wave. Right-wing populists were the ascendancy, with Newt Gingrich leading the charge. (In an earlier posting I included Fox News but that gave them too much credit; their fulminations started a few years later.) Bill Clinton thought it desperately important to assure Americans he was on their side.

Two months later, Clinton summoned Dick Morris to the White House to figure out how Clinton could move to the right and better position himself for reelection. The answer: Balance the budget.

But in 1994, Clinton’s inconsistencies didn’t much matter. The U.S. economy was coming out of a recession. It was of no consequence that Clinton’s jobs proposals were small or that he moved to the right and whacked the budget, because within a year the great American jobs machine was blasting away and the middle class felt a lot better. Dick Morris was not responsible for Clinton’s reelection. Nor was Clinton’s move to the right. What reelected Bill Clinton in 1996 was a vigorous jobs recovery that was on the way to happening anyway.

Today, though, there’s no sign on the horizon of a vigorous recovery. Jobs may be coming back a bit in the next months but the country has lost so many (not to mention all those who have entered the workforce over the last two years and still can’t land a job) that it will be many years before the middle class can relax. Furthermore, this recession isn’t like other recessions in recent memory. It has more to do with problems deep in the structure of the American economy than with the ups and downs of the business cycle.

Like Clinton’s, Obama’s package of middle class benefits is small potatoes. They’re worthwhile but they pale relative to the size and scale of the challenge America’s middle class is now facing. Obama can no longer afford to come up with lists of nice things to do. At the least, he’s got to do two very big and important things: (1) Enact a second stimulus. It should mainly focus on bailing out state and local governments that are now cutting services and raising taxes, and squeezing the middle class. This would be the best way to reinvigorate the economy quickly. (2) Help distressed homeowners by allowing them to include their mortgage debt in personal bankruptcy — which will give them far more bargaining leverage with morgage lenders. (Wall Street hates this.)

Yet instead of moving in this direction, Obama is moving in the opposite one. His three-year freeze on a large portion of discretionary spending will make it impossible for him to do much of anything for the middle class that’s important. Chalk up another win for Wall Street, another loss for Main.

Obama Looking Forward to Ex-Presidency

by John Lawrence

With the tide turning against Obama and the Democrats, it almost seems like Obama is looking forward to being a successful  ex-President in the tradition of Jimmy Carter and Bill Clinton both of whom have gone on to do great things and lead satisfying lives as ex-Presidents. Clinton with his Clinton Global Initiative has done much good in the world while his books and speaking fees have brought him personal riches. Jimmy Carter has gone all over the world monitoring elections and building houses for Habitat for Humanity. He also finishes furniture and does a whole host of satisfying ex-Presidential things. Both of these men have done more good and led more satisfying lives as ex-Presidents than they ever did when they actually occupied the Oval Office.

I think Obama is looking forward to the day when he establishes the Obama Presidential Library and joins the ethereal and esteemed ranks of ex-Presidents. He will then have the chance of helping poor people in Africa and African-Americans in the US without being branded as an illegal. Obama has to walk such a tightwire as President, since he's the first black President, constantly being hounded and questioned by right wing conservatives about his birth certificate and his bonafides as an American citizen. Not to mentioned being labeled a fascist and a socialist at the same time and being compared to Hitler!

Obama seems to show that he is more interested in conducting himself with dignity while in office and then going on to a successful ex-Presidency than he is in taking on the Republicans in the fight of the century. That would involve trashing the filibuster so that the Democrats could actually pass some of Obama's agenda. As it now stands with the filibuster rule being honored by both parties, Obama and the rest of us can look forward to having every piece of legislation the Democrats put forward filibustered to death in the Senate. The Republicans have demonstrated the fact that they will filibuster every little bit of Democratic legislation no matter how much it might benefit the American people because it will insure that Obama's record will be abysmal and insure his defeat in 2012. So they are all about defeating Obama; they're not at all about solving the immense problems Obama inherited from Bush. The net result is thaat the Democrats have been rendered ineffectual and impotent. Their elaborate health care reform bill, touted as the culmination of 100 years of attempted health care reform initiated by Teddy Roosevelt, has suddenly and inexorably been destroyed by the quirk election of Scott Brown, the 41st Republican Senator who guarantees that Republican filibusters will doom any and all Democratic legislation. Obama has gone from tinkering around the edges to tinkering around nothing. His continued tinkering will produce no reseults. The Democrats have a need to look busy so that the public will not catch on that they are not accomplishing anything. But who do they think they are kidding?

However, should Obama choose to accept this mission, he could actually fight the Republicans instead of rhetorically play-fighting them, by attacking the filibuster rule. After all the Democrats still have majorities in both the House and the Senate. If it were not for the filibuster rule they could pass their agenda almost by fiat. But they are such wimps that they will probably acquiesce to the Republicans and not take on this fight and hope the public won't notice. The House can pass all the legislation it wants and get all the headlines it wants about all the good stuff it is doing. But it is all to no avail and for nought if it is filibustered in the Senate. All these politicians know that, but they are being disingenuous if they try to fool the American people tha t they are actually getting anything done. I repeat who are they kidding?

Obama has been much too timid and much too bi-partisan in trying to deal with the totally partisan Republicans. His strategy for getting health care reform has been an utter failure largely because he compromised away robust health care reform from the very outset. By catering to health insurance and pharmaceutical companies and Republicans, he set the stage for the Republicans on the Senate Banking Committee under Max Baucus to delay and delay and water down and water down resulting in a 2000 page mish mash. It wasn't the sausage making; it was the sausage that resulted - an undigestible pile of crap. The Republicans were largely successful in their tactics although it took a quirk of fate, the election of a Republican for Ted Kennedy's seat, to seal their doom. Even before that, Republicans were praying for the death of Senator Robert Byrd, 92 years old and ailing. And at the end, they had to buy off several Democratic Senators with some unseemly horse trading. Nevertheless, they could still go ahead and pass the Senate bill as written as long as the House rubber stamped it. Such a show of Democratic power, any show of Democratic power, would be welcomed. But the Democrats seem determined not to use the power that they have. The result will be that they will lose that power, the Republicans will take over and the Democrats will go back to their comfortable role of complaining about the status quo safely ensconced in the position that they will not be able to do anything about it.

Obama made a big mistake when he didn't exact concessions from the bankers before he bailed them out. Instead his strategy was bail them out first, then we'll do banking reform. Net result: the banksters' lobbyists are now lobbying against banking reform with taxpayer money. Obama was snookered. He should have done banking reform as a condition for bailing them out. This was Mistake #2 with his strategy toward health care being Mistake #1. The next big mistake is letting the Republicans dictate to him about job creation. Job creation should have been Job #1, but Obama acquiesced to Larry Summers and Tim Geithner that job creation is a lagging indicator and that the important thing was to bail out the banks and that job creation, like Mary's little lamb, was sure to follow. Well, it didn't follow, and now Obama is in a pickle. His political capital is diminished because of failures in health care reform and banking reform, just as the Republicans expected, verifying the Republican strategy of saying "no" to anything Obama might have claimed as a victory. Besides there will be no job creation this year either if the Republicans have anything to say about it, and because of the fillibuster, they do. Obama has not been clear in his political philosophy and counterposed that against Republican political philosophy which, no matter how nefarious, is crystal clear. As a result Democrats seem wishy washy not standing for anything except some lukewarm reforms. What they need to do is challenge the status quo, not accept it.

So Obama's and the Congresssional Democrats' timidity and wimpiness has been largely responsible for their failure, and they will continue to fail unless they actually go to the mat and challenge the filibuster rule or use reconciliation to pass their legislation. The course they will probably follow though is the path Clinton chose: pass Republican legislation in order to show that you got something, anything, done. The result of this will be continued degeneration of the US as an economic and world power as the rest of the world sees that the mighty US has a sclerotic and dysfunctional political system that can't even accomplish something that has already been accomplished in the rest of the civilized world: universal health care. Obama's failure will insure the decline of the middle class who he supposedly came to office to champion. But since he's not willing to fight, despite his fighting rhetoric, the Republicans and their philosophy, which caused the Great Recession, will come back into power. It's only a question of when as if they don't control the political process as a minority party now. Democratic concessions have resulted in political capitulation.

The Democrats will do nothing about reforming Wall Street or increasing taxes on the rich in order to replenish their coffers, let alone a financial transactions tax. Instead, they will continue to go into debt to the Chinese. It has been 30 years of Republican philosophy that "debts don't matter" and lowering taxes on the rich that has got us into this predicament, but Obama will not be able to do anything about it. When he had a chance to, he took the wrong advice. Now his only real choice is to use reconciliation or attack the filibuster rule with the nuclear option, neither of which he has any appetite to do. Instead he wants to go out as a dignified ex-President who will then be able to accomplish something on the outside as Clinton and Carter have done. While the Republicans have a no holds barred political philosophy, the Democrats go into any political struggle with one hand tied behind their back. Obama has been reduced from tinkering around the edges to just plain impotent and ineffectual tinkering. Failing to blame his predecessor for the current mess shows that Obama wants to be a respectable member of the ex-President's club rather than someone who goes balls out to use political power to counter 30 years of Repuiblican and conservative political  philosophy and replace it with Democratic philosophy. It also just goes to show that the Democrats, following in Clinton's tradition, have just become Republican light.

I hope I'm wrong about all this, but I've got this to say to Obama and the Democrats: SHOW ME!

How the Democrats Blew It

by John Lawrence

They failed to recognize that, with a majority in the House and 60 votes in the Senate, they could have passed whatever legislation they wanted. Instead, they started off with a watered down approach to health care. They ruled out single payer from the start. They tried to be bi-partisan with a party that was absolutely committed to not being bi-partisan with them. They should have started with a very simple concept, a concept the American people could understand and appreciate: a Medicare buy-in available to all. They should have campaigned on it and then followed through in short order and enacted it into law. It's a concept so simple that the low information American voters, the bulk of them, could understand it. Instead of 2000 pages of sausage making and mish mash, a Medicare buy-in for all could have been expressed in one page and could have been voted into law in a matter of weeks! It wouldn't have required anyone to choose Medicare over private insurance so it wouldn't have been coercive. They could have kept their private insurance if they wanted to.

Instead, Obama and the Democrats went out of their way to show deference towards the insurance companies, the pharmaceutical companies and American "tradition." They should have used their political power effectively instead of trying to be nice to everybody. They should have drawn a distinction betweeen their philososphy and that of the Republicans. Instead they came up with a complex bill that the American public could not understand all the ramifications of and it took too damn long. The fact that it took too long allowed the Republicans, in the final analysis, to scuttle it by a stroke of fate. They had already expressed out loud the hope that some Democrat would die thereby denying the Democrats a filibuster-proof majority. It turned out that a Democrat did die (Ted Kennedy), and this eventually did deny them a filibuster-proof majority after a Republican was elected in his place. The more time that went on, the more likely it was that something would happen that would cause the Democrats to be defeated. The lesson here is that the Democrats squandered their political power, time and energy instead of using it effectively.

If the Democrats had pushed through a "Medicare for all" bill soon after Obama's election, they would have had a quick major success upon which to build. They then could have gone on to build on that success. Instead, they frittered away time and time is money and in this realm time is political power. They let the Republicans delay and delay when they had no intention of helping them with this legislation. Their only intent was defeat the legislation and if they couldn't do that, to water it down, vitiate and undermine it. A failure to recognize what was going on and let themselves be snookered by the Republicans is their major failure. They failed to recognize that the Republicans didn't give a hoot about "helping the American people" because the Republican belief is that the only way to help the American people is to reduce taxes and to deregulate. They believe that helping American corporations and eliminating social programs is the way to help the American people. They believe that privatizing everything including health care is the way to help the American people. Since the Democrats don't believe this, they should have drawn the distinction more poignantly instead of making believe that the Republicans could have been drawn into a bipartisan agreement. They made believe that the Republicans would join them in their effort to help the American people directly instead of via the Republican vision of helping them by throwing them a few crumbs from the corporate table.

The Democrats allowed everyone to be exhausted by an interminable legislative process resulting in a watered down health care bill that would have passed if only it hadn't been for Scott Brown's election in Massachusetts. How ironic that it was Ted Kennedy's seat, vacated by his death, a man who had fought for health care his entire life, that would doom the health care bill that had consumed so many man hours of Congressional time. Think of all that might have been accomplished if a "Medicare for all" bill had been passed immediately, so that all the Congressmen could have gone on to other things like jobs, for example, having built on their success with health care. Now instead, Obama is in the position of trying to build something on failure. He's in the position of having to beg the Republicans for every little thing he wants to accomplish, and he'll get nowhere with that because the Republicans have already shown that they don't want to compromise. The only compromise they'll accept is capitulation. So just as Clinton was dictated to by Newt Gingrich, Obama is being set up to be dictated to by Mitch McConnell and John Boehner. The Republicans, by virtue of the filibuster rule, are in the position to deny every bit of legislation that the Democrats put forth. So not only will they fail at health care, they will fail at job creation, at financial regulation and anything else. Their only possible pretense of success is to do what Clinton did and pass a Republican agenda.

The Democrats don't understand that the Republicans are diametrically opposed to their agenda, and besides their main goal is to defeat the Democrats, not to help the American people and certainly not to help the middle and lower classes. They are elitists who only represent the wealthy and the corporations. That should be absolutely clear. Instead the Democrats played this game where they pretended that the Republicans were really nice guys, and, if they were just nice to them, the Republicans could be won over to do the right thing. How wrong could they be? So all the talk about health care being Obama's waterloo turned out to be right. By a stroke of fate, the Republicans have defeated the Democrats. All the "fight" talk notwithstanding, Obama doesan't have a fighting chance of getting anything passed because it all has to go through the Senate where the Republicans will filibuster it. So it's game over for the Democrats. They've proved themselves to be ineffectual when they had all the power that the American political system is capable of bestowing. The American people like a winner, and by frittering away their time and energy over health care instead of passing a simple plan immediately - Medicare for all who wish to buy into it - they set themselves on a course for defeat.

So the Democrats now have two choices. Obama can try to "triangulate" as Clinton did. This means he will give the Republicans most of what they want in return for a few crumbs from the table. But this will not work this time as it arguably worked for Clinton because the Republicans smell blood in the water, and their main goal is to defeat Obama and the Democrats. The elections are too close - later this year. The Republicans are much more vile and vindictive now than they were even when Clinton was President. Besides Obama's impulse was to triangulate even when he and the Democrats had all the power and didn't need to. By giving up single payer immediately, Obama was "triangulating" even when he didn't have to. So why should the Republicans now give him anything even a few crumbs from the table. Instead they will pile on showing Obama no mercy. Obama's only choice now is simply to challenge the whole system, the system which has elevated the filibuster to the dominating and paramount element of American politics. There is nothing in the Constitution that gives the filibuster this power. In fact there is nothing in the Constitution about it at all. The intent of the Founding Fathers was that majority rule should be the deciding factor in both the House and the Senate. So now the Democrats have a choice. Do they really fight and attack the very legitimacy of the filibuster or do they "play fight", talk tough, pass numerous bills through the House and have them defeated in the Senate by Republican filibusters with the Democrats acting like "nobody could have predicted that the Republicans would filibuster all these bills." It's a direct analogy to Lucy taking away the football just before Charlie Brown goes to kick it again and again and again.

The Republicans will even act like they want to be bipartisan, they want to participate in the sausage making process. Why? So they can fritter away more of the Democrats' time and energy in an enervating, self defeating process. Their calculation is that the Democrats are too wimpy to really challenge the system, and that, when they take power again, the Democrats will not filibuster them because they'll want to be "helpful" and "responsible." That's why they say "let's start over" with health care. After dealing the Democrats one huge defeat over health care, they'd like nothing better than to deal them a second huge defeat with the same issue! They'd like nothing better than to pound the wimps into the ground. After the Republicans take over, corporatism will have totally defeated any semblance of democracy in America. The process begun by Ronald Reagan will have been completed. The American middle class will have been turned into a nation of neo-serfs indebted to their corporate masters. Money in politics has already won the day due to the recent Supreme Court decision. That and the Democrats imminent defeat is all the corporatists need to seal the progressives' doom.

But, the Democrats, should they choose to do so, could fight to defeat the filibuster rule, and then use their majorities in both Houses to power through the legislation that they favor including health care, jobs and financial regulation. They could use reconciliation and even the nucear option, but they're probably too wimpy to actually challenge the system. They could make the Republicans stay on the Senate floor and talk 24/7 if they want to filibuster, make them pee into a bucket and eat take out pizza. But they're too wimpy to do that. They have indulged the Republicans with their willingness to try and be bipartisan and this has only served to defeat them. Obama has tried to be Mr. Nice Guy and the Republicans have used this to defeat him. The Democrats' hesitance to use their political power full bore has redounded to the benefit of the Republicans who would never make that mistake. In short the Democrats have learned nothing from their opponents. Instead they've tried to be nice to an opponent who is dead set on defeating them and winning political power. Now the Republicans smell blood in the water. They're circling Obama like a pack of wolves. They've used him to bail out the bankers and the financial elites. Now that he wants to bail out the middle class, they've got no use for him. They've got him where they want him. Obama has been snookered.

Joblessness, Foreclosure, Bankruptcy, Divorce - American Dream Denied

Published on Saturday, January 23, 2010 by the New York Times

They Still Don’t Get It

by Bob Herbert

How loud do the alarms have to get? There is an economic emergency in the country with millions upon millions of Americans riddled with fear and anxiety as they struggle with long-term joblessness, home foreclosures, personal bankruptcies and dwindling opportunities for themselves and their children.

The door is being slammed on the American dream and the politicians, including the president and his Democratic allies on Capitol Hill, seem not just helpless to deal with the crisis, but completely out of touch with the hardships that have fallen on so many.

While the nation was suffering through the worst economy since the Depression, the Democrats wasted a year squabbling like unruly toddlers over health insurance legislation. No one in his or her right mind could have believed that a workable, efficient, cost-effective system could come out of the monstrously ugly plan that finally emerged from the Senate after long months of shady alliances, disgraceful back-room deals, outlandish payoffs and abject capitulation to the insurance companies and giant pharmaceutical outfits.

The public interest? Forget about it.

With the power elite consumed with its incessant, discordant fiddling over health care, the economic plight of ordinary Americans, from the middle class to the very poor, got pathetically short shrift. And there is no evidence, even now, that leaders of either party fully grasp the depth of the crisis, which began long before the official start of the Great Recession in December 2007.

A new study from the Brookings Institution tells us that the largest and fastest-growing population of poor people in the U.S. is in the suburbs. You don't hear about this from the politicians who are always so anxious to tell you, in between fund-raisers and photo-ops, what a great job they're doing. From 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million. That represented an increase of 15.4 percent in the poor population, which was more than twice the increase in the population as a whole during that period.

The study does not include data from 2009, when so many millions of families were just hammered by the recession. So the reality is worse than the Brookings figures would indicate.

Job losses, stagnant or reduced wages over the past decade, and the loss of home equity when the housing bubble burst have combined to take a horrendous toll on families who thought they had done all the right things and were living the dream. A great deal of that bleeding is in the suburbs. The study, compiled by the Brookings Metropolitan Policy Program, said, "Suburbs gained more than 2.5 million poor individuals, accounting for almost half of the total increase in the nation's poor population since 2000."

Democrats in search of clues as to why voters are unhappy may want to take a look at the report. In 2008, a startling 91.6 million people - more than 30 percent of the entire U.S. population - fell below 200 percent of the federal poverty line, which is a meager $21,834 for a family of four.

The question for Democrats is whether there is anything that will wake them up to their obligation to extend a powerful hand to ordinary Americans and help them take the government, including the Supreme Court, back from the big banks, the giant corporations and the myriad other predatory interests that put the value of a dollar high above the value of human beings.

The Democrats still hold the presidency and large majorities in both houses of Congress. The idea that they are not spending every waking hour trying to fix the broken economic system and put suffering Americans back to work is beyond pathetic. Deficit reduction is now the mantra in Washington, which means that new large-scale investments in infrastructure and other measures to ease the employment crisis and jump-start the most promising industries of the 21st century are highly unlikely.

What we'll get instead is rhetoric. It's cheap, so we can expect a lot of it.

Those at the bottom of the economic heap seem all but doomed in this environment. The Center for Labor Market Studies at Northeastern University in Boston put the matter in stark perspective after analyzing the employment challenges facing young people in Chicago: "Labor market conditions for 16-19 and 20-24-year-olds in the city of Chicago in 2009 are the equivalent of a Great Depression-era, especially for young black men."

The Republican Party has abandoned any serious approach to the nation's biggest problems, economic or otherwise. It may be resurgent, but it's not a serious party. That leaves only the Democrats, a party that once championed working people and the poor, but has long since lost its way.

© 2010 New York Times

Bob Herbert joined The New York Times as an Op-Ed columnist in 1993. His twice a week column comments on politics, urban affairs and social trends.

I'm Mad As Hell And I'm Not Taking It Any More

What the "I'm Mad-As-Hell" Party Could Do

by Robert Reich
Sunday, January 24, 2010

A third political party is emerging in America. Call it the I’m-Mad-As-Hell party.

It’s a mistake to see the Mad-As-Hell party as just a right-wing phenomenon – the so-called Tea Partiers now storming the gates of the Republican Party. There are plenty of mad-as-hellers on the left as well – furious at Wall Street, health insurers, pharmaceutical manufacturers, and establishment Democrats.

Mad-as-hellers don’t trust big government. But they don’t trust big business and Wall Street, either. They especially hate it when big government gets together with big business and Wall Street – while at the same time Main Street is in shambles and millions of people are losing their jobs and homes. 

First it was TARP, the giant bank bailout that seems to have made Wall Street flush again — so flush the Street is now distributing giant bonuses as if the crash it brought on never happened.

Then came the stimulus package, replete with earmarked goodies for every corporation big enough to hire a team of Washington lobbyists.

And then it was health care, which to some people looked like a sweetheart deal between government and Big Pharma and big health insurers.

To the Mad-As-Hell party, the biggest event last week wasn’t Scott Brown’s upset victory in Massachusetts. It was the Supreme Court’s decision in Citizen’s United vs. the Federal Election Commission, allowing corporations to spend however much they want on political campaigns. True mad-as-hellers see this as inviting even more collusion between big business, Wall Street, and big government – and against the rest of us.

With the mid-term elections months away, both Republicans and Democrats are scrambling to embrace the Mad-As-Hell Party as their own. Republicans are hoping the mad-as-hellers forget the gushing corporate welfare of the Bush administration and the last Republican congress. And Democrats have become born-again economic populists, blaming the nation’s problems on the same “fat cat” bankers and corporate lobbyists they’ve been cozying up to for years.

If the Mad-as-hell Party helps get money out of politics it will do a world of good. I might even join up. But if it just fulminates against the establishment, forget it. Wrecking balls are easy to wield. Rescuing our democracy is hard work.

European Human Rights Group, U.S. Media Decry SCOTUS Ruling

Posted on Jan 22, 2010

abcnews.go.com/WN/DianeSawyer/

ABC’s Diane Sawyer is no fan of the Supreme Court decision on campaign finance. She said Thursday on her “World News” report that the ruling opens the “floodgates for companies and unions to spend all the money they want attacking political candidates.”

The U.S. Supreme Court’s decision on Thursday to loosen corporate restrictions on campaign finance didn’t sit well with the Organization for Security and Cooperation in Europe, an international human rights coalition of 56 European nations, but somehow we doubt that the top court’s conservative justices are going to lose sleep over that particular critique. Oh, and certain members of the American media didn’t like SCOTUS’ ruling either.

The Washington Post:

The head of its office that monitors democratic practices says the ruling effectively lifting limits on election spending by corporations and unions “threatens to further marginalize candidates without strong financial backing or extensive personal resources.”

Read more

A Bad Week for Progressives

Published on Saturday, January 23, 2010 by CommonDreams.org

Progressives: Don't Mourn, Organize

by Michael Winship

Tragic events continuing out of Haiti make all the bad news for progressives this week wither in comparison. Nonetheless, over these last few days, for liberals in particular, there has been no joy in Mudville -- aka American politics.

Just for starters: Thursday's Supreme Court decision opening the floodgates for corporate dollars dominating campaign advertising; the election of Republican Scott Brown to the Senate, ending the Democrats so-called supermajority of 60 votes; and the subsequent collapse of health care reform as Democratic members of Congress scurried for the fire exits.

For a moment at least President Obama must have felt like he was in one of those animated cartoons where the hero tries to rally his troops shouting, "What are we, men or mice?" and the response is a chorus of rodent-like squeaks.

Add to this John Edwards confessing -- finally -- to paternity, and the withdrawal of Erroll Southers' name as Obama's choice to run the Transportation Security Administration after weeks of harassment by conservative Senator Jim DeMint (and the revelation that Southers had dissembled about incidents 20 years ago when he accessed a Federal database to investigate his estranged wife's new boyfriend). Yikes.

Then, just to ice this cookie full of arsenic, comes news of the demise of the progressive radio network Air America. It was a misbegotten enterprise from the onset, intentions noble but its finances always in a state of jangling uncertainty (in the interest of full disclosure, I made regular appearances for a short while on their morning show, "Unfiltered," hosted by Lizz Winstead, Chuck D and Rachel Maddow -- Rachel being the best and smartest on-air personage to have emerged from the entire Air America enterprise).

Why progressive talk radio has been unable to counter the right-wing, talk radio juggernaut seems no great mystery. The nuance and diffuse nature of much liberal debate is unlike the bombast and accusation that sells beverages and shock absorbers. "Yes, but on the other hand" works great for NPR, God bless them, but not in the loud and confrontational world of commercial talk radio, where gladiatorial skills are more valued than dialectical ones.

More important, Air America was never able to attract the big corporate dollars, its audience too small and, one presumes, because its politics did not gibe with the free market agenda of many large sponsors and their associates, the ones with the deepest pockets.

Just look, for example, at the wallet of the conservative United States Chamber of Commerce, which describes itself as "the world's largest business federation representing 3 million businesses of all sizes, sectors, and regions."

The Chamber bragged about the cash they poured into TV ads supporting Scott Brown in the Massachusetts Senate race -- more than half a million dollars' worth by last count -- and said his victory "could pay immediate dividends by throwing into question the future of health care reform legislation pending in Congress." Check and double check.

It's the opening salvo in their campaign to block just about any kind of reform by backing pro-business candidates in this fall's midterm elections -- in all, the Chamber plans to spend a whopping $100 million dollars. Not that they have to buy any more members of Congress -- as we've seen this past year, and especially this week, the Democrats and Republicans they've already helped pay for are perfectly capable of bringing the House and Senate to a compete standstill -- witness health care, the cap-and-trade climate bill and the disinclination to truly step up to the plate on financial reform.

All thanks in part to the lobbying efforts and campaign cash of big business, which, with this week's Supreme Court decision, will be all the more able to deluge the airwaves and Internet with an unending barrage of ads in favor or against the candidates and issues of their choice.

But this is no time to run and hide. As the historian Simon Schama wrote in the January 19 edition of the Financial Times, the President "may actually need to respond to the unrelenting pressure from zombie conservatism, ravenously flesh-eating and never quite dead, not by turning on more consensual charm, but by taking the gloves off. With his bank levy -- 'We want our money back,' he said -- Mr. Obama has belatedly begun to fight. Whether he can trade enough punches with the right before the November mid-term elections remains to be seen, but my hunch is that President Composure is up for a brawl."

To do so, he will have to speak out forcefully and counter the bulldozing effect of megabucks with solid community support. A report last week by David Corn on the Mother Jones Web site was not encouraging, suggesting that the volunteer army of more than 13 million activists and donors that sparkplugged Obama's presidential campaign has been too often ignored or misused by the White House.

An investigation commissioned by the crosspartisan group blog TechPresident.com found that as far as advancing a progressive agenda goes, the effort that arose from the Obama campaign, Organizing for America (OFA), "focused more on supporting and thanking allied Members than pressuring resistant Democrats or Republicans." In other words, too many e-mail offers of OFA tee-shirts and wool hats and not enough boots on the ground canvassing and lobbying.

This is no time to go wobbly, as Margaret Thatcher famously told George Bush the First. But given the events of this week, perhaps even more appropriate are the pre-firing squad words of that most famous Wobbly, radical and labor activist Joe Hill: Don't mourn, organize.

Michael Winship is senior writer of the weekly public affairs program "Bill Moyers Journal," which airs Friday night on PBS. Check local airtimes or comment at The Moyers Blog at www.pbs.org/moyers.

Record Bank Profits - American Dream Foreclosed

Published on Saturday, January 23, 2010 by CommonDreams.org

by Mike Prokosch

Last week, JP Morgan Chase launched the 2010 Wall Street Bonus Sweepstakes. The bank is still losing money on consumer services, but well-heeled investors and financial traders more than made up the difference. The bank announced $11.7 billion in profits and $26.9 billion in compensation, including bonuses that will run in the multimillions for the top executives. Goldman Sachs reported record profits of $13.4 billion, and is set to dole out a staggering $16.2 billion in compensation and bonuses, which could provide an average of nearly $500,000 per employee. And Morgan Stanley, even having sustained a loss in 2009, has set aside $14.4 billion for compensation and bonuses.

Then there's Roberto Velasquez -- the other face of the foreclosure crisis.

Mr. Velasquez, a general contractor, bought a single-family home in Dedham, Massachusetts six years ago. Unfortunately, his mortgage turned out to be a predatory time bomb. After a few affordable years, the interest rate on his adjustable-rate mortgage ballooned and his payments rose to $4,800 a month. He kept up though; until the Wall Street crash knocked the stuffing out of the construction industry. Then he fell three months behind.

Mr. Velasquez found jobs and came up with the three months' payments, but the bank wouldn't work with him. His home was foreclosed on in November. A local bank offered to buy the home and sell it back to Mr. Velasquez for its present market value, which is the most his bank would get for the house if they sold it at auction. Still no deal. "We did what they asked," says Mr. Velasquez, "but they don't want to work with anybody."

Arrogance like that is going to sink more than Mr. Velasquez, his wife, their nine-year-old and their four-year-old. Foreclosures feed on themselves, taking down the value of nearby homes and putting ever more people underwater. There were 3.4 million foreclosures in 2009. That number is expected to rise in 2010. Unless foreclosures stop, the housing market will keep spiraling downward, and it will take the building and mortgage industries with it, ultimately stalling any economic recovery.

A new report from the McKinsey Global Institute confirms this picture, noting that it usually takes six to seven years to squeeze the debt out of a big bubble. During the first several years, gross domestic product shrinks. "At this writing, the deleveraging process has barely begun," warns McKinsey. "The bursting of the great global credit bubble is not over yet." In short, all of us will be hurting for years because Washington is refusing to make the banks eat the debt bubble they created. Instead, the bailed-out banks are walking away with record profits and fat bonuses.

There's a way to avoid another decade of downturn. United for a Fair Economy's new report, State of the Dream 2010: Drained, outlines key proposals that can stem the massive loss of personal wealth and homes. States and the federal government should put an immediate hold on foreclosures when unemployment causes homeowners to default. Bankruptcy judges must be given the power to cut down mortgages to levels homeowners can afford, as they already can for other types of loans. Both of these reforms would stabilize families and communities, especially communities of color that are seeing hard-earned wealth stripped from them at alarming rates. They would also push the banks to accept realistic write-downs on the inflated property values their books still reflect, squeeze debt out of the economy, and hasten a recovery. And they might even keep the banks from doing this to us again.

President Obama just proposed a "Financial Crisis Responsibility Fee" to be imposed on the Wall Street firms that caused the crash and soaked up most of the relief funds. While this is a good start, the fee is temporary. When it ends, the banks can return to their irresponsible ways. A permanent financial transactions tax would discourage speculative trading in home mortgages and the derivative pyramids that were piled on top of them. Serious financial re-regulation, like that outlined in the State of the Dream report, is also essential.

In the end, recovery is not enough. The banks whose irresponsible behavior led to the meltdown must accept part of the responsibility, or they will do it again. At the same time, we must aid the hardest hit communities where joblessness and foreclosures are still wreaking havoc. That is the only route to a fair recovery and a healthy economy.

Mike Prokosch is a board member with United for a Fair Economy (UFE) and co-author of UFE's new report, State of the Dream 2010: Drained - Jobless and Foreclosed in Communities of color, available for download at http://www.faireconomy.org/dream. When not volunteering with UFE, Prokosch works at Community Labor United in Boston.

Supreme Court Rules Corporations Can Spend Unlimited Amounts on Political Ads

Published on Saturday, January 23, 2010 by CommonDreams.org

Time to Reign in Out-of-Control Corporate Influences on Our Democracy

by Ralph Nader

Thursday's 5-4 decision by the U.S. Supreme Court in Citizens United v. Federal Election Commission shreds the fabric of our already weakened democracy by allowing corporations to more completely dominate our corrupted electoral process. It is outrageous that corporations already attempt to influence or bribe our political candidates through their political action committees (PACs), which solicit employees and shareholders for donations.

With this decision, corporations can now directly pour vast amounts of corporate money, through independent expenditures, into the electoral swamp already flooded with corporate campaign PAC contribution dollars. Without approval from their shareholders, corporations can reward or intimidate people running for office at the local, state, and national levels.

Much of this 183 page opinion requires readers to enter into a fantasy world and accept the twisted logic of Justice Kennedy, who delivered the opinion of the Court, joined by Chief Justice Roberts, and Justices Scalia, Alito, and Thomas. Imagine the majority saying the "Government may not suppress political speech based on the speaker's corporate identity."

Perhaps Justice Kennedy didn't hear that the financial sector invested more than $5 billion in political influence purchasing in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse, according to a 231-page report titled: "Sold Out: How Wall Street and Washington Betrayed America" (See: WallStreetWatch.org).

The Center for Responsive Politics reported that last year the U.S. Chamber of Commerce spent $144 million to influence Congress and state legislatures.

The Center also reported big lobbying expenditures by the Pharmaceutical Research and Manufacturers of America (PhRMA) which spent $26 million in 2009. Drug companies like Pfizer, Amgen and Eli Lilly also poured tens of millions of dollars into federal lobbying in 2009. The health insurance industry trade group America's Health Insurance Plans (AHIP) also spent several million lobbying Congress. No wonder Single Payer Health insurance - supported by the majority of people, doctors, and nurses - isn't moving in Congress.

Energy companies like ExxonMobil and Chevron are also big spenders. No wonder we have a national energy policy that is pro-fossil fuel and that does little to advance renewable energy (See: OpenSecrets.Org).

No wonder we have the best Congress money can buy.

I suppose Justice Kennedy thinks corporations that overwhelm members of Congress with campaign contributions need to have still more influence in the electoral arena. Spending millions to lobby Congress and making substantial PAC contributions just isn't enough for a majority of the Supreme Court. The dictate by the five activist Justices was too much for even Republican Senator John McCain, who commented that he was troubled by their "extreme naivete."

There is a glimmer of hope and a touch of reality in yesterday's Supreme Court decision. Unfortunately it is the powerful 90 page dissent in this case by Justice Stevens joined by Justices Ginsburg, Breyer, and Sotomayor. Justice Stevens recognizes the power corporations wield in our political economy. Justice Stevens finds it "absurd to think that the First Amendment prohibits legislatures from taking into account the corporate identity of a sponsor of electoral advocacy." He flatly declares that, "The Court's ruling threatens to undermine the integrity of elected institutions across the Nation."

He notes that the, Framers of our Constitution "had little trouble distinguishing corporations from human beings, and when they constitutionalized the right to free speech in the First Amendment, it was the free speech of individual Americans that they had in mind." Right he is, for the words "corporation" or "company" do not exist in our Constitution.

Justice Stevens concludes his dissent as follows:

"At bottom, the Court's opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics."

Indeed, this corporatist, anti-voter majority decision is so extreme that it should galvanize a grassroots effort to enact a simple Constitutional amendment to once and for all end corporate personhood and curtail the corrosive impact of big money on politics. It is time to prevent corporate campaign contributions from commercializing our elections and drowning out the voices and values of citizens and voters. It is way overdue to overthrow "King Corporation" and restore the sovereignty of "We the People"! Remember that corporations, chartered by the state, are our servants, not our masters.

Legislation sponsored by Senator Richard Durbin (D-IL) and Representative John Larson (D-CT) would encourage unlimited small-dollar donations from individuals and provide candidates with public funding in exchange for refusing corporate contributions or private contributions of more than $100.

It is also time for shareholder resolutions, company by company, directing the corporate boards of directors to pledge not to use company money to directly favor or oppose candidates for public office.

If you want to join the efforts to rollback the corporate concessions the Supreme Court made yesterday, visit Citizen.Org and freespeechforpeople.org.

Ralph Nader is a consumer advocate, lawyer, and author. His most recent book - and first novel -  is, Only The Super Wealthy Can Save Us. His most recent work of non-fiction is The Seventeen Traditions.

It's Time for a Shareholder Protection Act

by Robert Reich

January 22, 2010

 Five members of the Supreme Court have defied logic by assuming that corporations are people. They are not. They are legal fictions, nothing more than bundles of contractual agreements. They are owned by their shareholders.

So what do we do now, other than wait for another Supreme Court opening, and for the President to appoint another Justice who understands this?

Push Congress to enact the “Shareholder Protection Act.”

For many years, anti-union lobbyists have pushed what they call “pay-check protection” laws, supposedly designed to protect union members from being forced, through their dues, to support union political activities they oppose. Under such laws — already in effect in several states — no union dues can be spent for any political purpose unless union members agree.

The same principle should protect shareholders from being forced to spend their share of corporate earnings in favor of or against a particular candidate. Surely a First Amendment that protects corporate free speech protects individuals no less.

Under a shareholder protection law, shareholders would not have to spend their share of corporate earnings on candidates who they personally oppose. If a company dedicates, say, $100,000 to a particular campaign in a given year — directly, or indirectly through a front organization — shareholders who don’t want their money used this way would get a special dividend or additional shares representing their pro rata share of that campaign expenditure. (Mutual funds and pension plans would have to notify their shareholders of any such political activity among the companies they’ve invested on their shareholders’ behalf, and seek their shareholders’ permission.) This way, corporate money for or against a particular candidate would be paid for only by shareholders who wanted to spend their portion of company earnings on it.

The Shareholder Protection Act is something even Scott Brown should be able to get behind. As should a Supreme Court supremely sensitive to First Amendment rights

How to Squander the Presidency in One Year

Published on Friday, January 22, 2010 by CommonDreams.org

Hey, Conan Obama: How About Now? Can You Hear Us Now?

by David Michael Green

There's only one political party in the entire world that is so inept, cowardly and bungling that it could manage to simultaneously lick the boots of Wall Street bankers and then get blamed by the voters for being flaming revolutionary socialists. 

It's the same party that has allowed the opposition to go on a thirty year scorched earth campaign, stealing everything in sight from middle and working class voters, and yet successfully claim to be protecting ‘real Americans' from out-of-touch elites. 

It's the same party that could run a decorated combat hero against a war evader in 1972, only to be successfully labeled as national security wimps. 

Just to be sure, it then did the exact same thing again in 2004. 

It's the same party that stood by silently while two presidential elections in a row were stolen away from them. 

How ‘bout dem Dems, eh? 

One year ago today, there was real question as to what could possibly be the future of the Republican Party in America.  That's changed a bit now. 

And, speaking of ‘change', the one kind that Barack Obama did actually deliver this year was not that which most voters had in mind after listening to him use the word incessantly, all throughout 2008.  Obama and his colleagues have now managed to bring the future of the Democratic Party into question, just a year after it won two smashing victories in a row. 

Personally, I'm not real bothered by that.  Today's Democrats are, almost without exception, embarrassing hacks who deserved to get stomped a long time ago. 

What really upsets me, however, is what these fools have allowed to be done to the name of progressivism, and to the country. 

Barack Obama has now, in just a year's time, become the single most inept president perhaps in all of American history, and certainly in my lifetime.  Never has so much political advantage been pissed away so rapidly, and what's more in the context of so much national urgency and crisis.  It's astonishing, really, to contemplate how much has been lost in a single year. 

It was hilarious, of course, when Michelle Bachmann invoked the Charge of the Light Brigade at a rally against "Obama's" (has he ever really owned it?) health care "initiative" (isn't that too strong a word to use?), quite oblivious to the fact that the actual historical event was one of history's greatest debacles.  Obama, on the other hand, seems to be actually reliving the famous cock-up in the flesh.  Except, of course, that he doesn't really "charge" at anything.  He just talks about things, thinks about things a real long time, defers to others on things, and waits around for things to maybe happen. 

This week, though, something actually did happen.  Alas, not precisely what the president had in mind, however. 

But the election in Massachusetts was only slightly less inevitable than the sun rising in the east each morning.  It was the product of an amazing collection of abysmal choices and practices over the last year that has produced a meltdown of equally amazing proportions for this president and his party.  It is fitting that it comes on the anniversary of the president's inauguration, a moment filled with so much hope for so many just a year ago. 

What has Obama - this Conan O'Brien of presidents - done wrong in order to produce this devastating outcome?  The short answer is:  Just about everything imaginable. 

More specifically: 

* He does not lead.  Americans, especially in times of crisis, want their daddy-president to pick a point on the horizon and lead them to it.  Often - especially in the short term - they don't even care that much which point it is.  They will happily follow a president whose policies they oppose if he will but lead. 

* And if he will demonstrate some conviction.  I have never seen a president so utterly lacking in passion.  This man literally doesn't even seem to care about himself, let alone this or that policy issue.  He doesn't seem to have any strong opinions on anything, a sure prescription for presidential failure. 

* He has therefore let Congress ‘lead' on nearly every issue, another surefire mistake.  Instead of demanding that they pass real stimulus legislation - which would have really stimulated the economy, big-time, and right now - he let those dickheads on the Hill just load up a big pork party blivet of a bill with all the pet projects they could find, designed purely to benefit their personal standing with the voters at home, rather than to actually produce jobs for Americans.  And on health care, his signature issue, he did the same thing.  "You guys write it, and I'll sign the check."  Could there possibly be a greater prescription for failure than allowing a bunch of the most venal people on the planet to cobble together a 2,000 page monstrosity that entirely serves their interests and those of the people whose campaign bribes put them in office? 

* Well, yes, now that you mention it.  If you really want to bring your government crashing to the ground, why not spend endless months negotiating with vicious thugs, who will never vote for your legislation anyhow, because they are so entirely devoted to your destruction that they're willing to call you a granny murderer?  What a great and winning strategy! 

* Another possible strategic move even stupider than deferring to Congress to write major legislation is to cozy up with the least popular people on the planet - including, in fact, the real-life granny killers.  Got an economy that is so raw it's leaving thousands in literal peril of losing their lives?  Why not draft some legislation to bail-out the people who created that mess and guarantee that they retain their multimillion dollar bonuses?!?!  You know, the same folks who are always talking about how great capitalism is and how important it is to take risks!  The same ones who are always telling us how awful the government is - the same government that saved them from extinction.  Those folks.  That's right, bail out with outrageous bonuses the very people who need it least and who caused billions of people around the planet to suffer, while leaving everyone else to fend for themselves!  That'll raise your presidential job approval ratings every time!  And while you're at it, bring in the much beloved health insurance and pharmaceutical corporate lobbyists, and negotiate a deal with them to craft your high profile health care legislation!  What voter can't get behind that? 

* Another brilliant presidential tactic is to be such a Mr. Happy Nice Face that you acknowledge no enemies for the country, or even yourself.  Not the health care corporate vampires who suck the blood out of Americans from San Diego to Bangor, providing absolutely no value-added health service whatsoever, while denying treatment to deathly ill human beings at every opportunity, all to rake in billions more in profits.  Not the reckless pirates on Wall Street who bet all our money on insane gambles that wrecked the global economy, took government bail-out money to survive, and yet are still drowning in bonuses as rewards.  Not the Republican Party who spent three decades downsizing the middle class, plunging the country into wars based on lies, deregulating every protection in sight, fattening up corporate cronies, wrecking the environment, trashing the Constitution and polarizing the country politically.  And not even a catastrophic climate disaster speeding toward the planet with relentless determination.  No!  We must all be happy and talk nice!  No bad guys.  Not even the bad guys can be bad guys. 

* While you're at it, if you're trying to run the most failed presidency ever, a really good idea is to campaign in the grandest terms possible, and then deliver squat.  You know, talk about bending the arc of history.  Invoke Martin Luther King's dream and his struggles and even those of the slaves.  Ring the big bells of generational calling.  Remind voters every thirty seconds that the country badly needs "Change!".  Then get elected and turn around and continue the policies of your hated predecessor in every meaningful policy area.  Only with less conviction.  People will love that. 

* A related brilliant move is to mobilize a giant army of passionate volunteers dedicated to putting you in the White House, and then do nothing with them once you get there, other than taking them completely for granted and never calling upon them to do anything in support of your agenda.  Be sure to deflate their enthusiasm in every way possible. 

* Even more importantly, if you're trying to run your presidency into the ground you'll definitely want to avoid mobilizing the general public behind your agenda.  To make sure that you don't repeat the great legislative victories of FDR or LBJ or (unfortunately) Reagan or (really unfortunately) Little Bush, never use their method of appealing directly to the people.  Never express your legislative program as a moral imperative, a great calling to the nation.  Never attempt to rally the public behind your cause.  Never express any urgency.  And never call upon them to demand that Congress pass your bills.  Then, you can rest assured they won't! 

* And let's take it up a whole ‘nuther level, while we're on the subject.   A successful president is one who articulates a strong and compelling narrative for the nation.  So, in your quest to avoid rising even to mediocrity, be sure to leave a great big gaping canyon where that whole narrative thing is supposed to go.  No New Deal, no Great Society, no New Frontier or War on Terror for you.  Nope!  Just a thousand little projects with little non-solutions to big problems.  Hey, why not inject yourself into Cambridge, Massachusetts community police politics while you're at it!  Or the New York State Democratic Party gubernatorial primary!  Or you could deliberate for weeks about which breed of dog to get for your kids!  That's a great use of the president's political capital! 

* As long as you're walking away from the grand narrative, why not let the opposition define you as well?  Let them say anything imaginable about you, and never respond.  You're a socialist!  No, you're a fascist!  No, you're both!  At the same time, no less!  You're a granny killer!  You're not really even an American!  You're taking over the US for the Muslims!  You're a massive taxer and spender!  You're running around the world, apologizing for America everywhere you go!  No worries.  Just remember the golden rule, and your presidency is sure to sink:  Never engage, never respond, never preempt, never attack, never fight back. 

* In general, you'll also want to take the most important power the president has - the bully pulpit - and totally piss it away.  Appear everywhere at once, all the time, saying lots of nice words, about a thousand different issues.  But never with passion, never with compelling simplicity, never with repetition, and never with urgency.  Pretty soon you'll turn being everywhere into being nowhere.  Everyone one will tune out your ubiquitous self.  Give up the high moral ground which is the most important asset of the office you hold, and you'll make sure that no one ever listens to you anymore.  You will persuade the public of nothing.  Except that you are irrelevant. 

* But you can do better still.  Help your enemies, so that they can crush you more effectively!  Start by not even realizing they are your enemies.  Then, treat them with greater respect than your friends, even though they've run the country over a cliff.  Defer to them at every opportunity.  Consult with them even as they insult you to your face.  Allow them to run Congress, even though they have small minorities in both houses.  Never force them to vote against simple, popular legislation.  Never call their bluffs.  Never associate them with the destruction they've caused.  Never label them the treasonous hypocritical liars that they are.  Help them to resuscitate the comatose near-corpse of their political party, just before it's about to die, so it can rise up and savage you. 

* Another great trick for crashing a presidency is to pick all the wrong priorities to ‘fight' for.  Imagine, for example, if FDR had substituted for his ‘Day of Infamy' speech right after Pearl Harbor a ringing call for an American revolution in cobbler technology!  Yes, that's right, in response to the devastating surprise attack by the armed forces of the Empire of Japan, what if the president urgently called upon us all to start making really amazing shoes?!  Before it's too late, and we all get blisters on our feet!  Similarly, Mr. Obama, your spending the last year on (jive) health care and jetting around the world dipping your toes into foreign policy problems while Americans are losing their jobs and their houses is a fine way to kill your presidency.  Guaranteed to work every time. 

* And, finally, perhaps the most important thing one can do - and the thing that helps explain many of the other items above - is to adopt really, really pathetic policies.  If you're doing a stimulus bill, for example, make sure that it's too little money, not targeted at real stimulative levers in the economy, costs a lot, doesn't kick in for a year or two, gives away about a third of the money to ineffective pet projects for Republican while none of them vote for it anyhow, and leaves the unemployment rate stuck at a miserable ten percent.  Or, if you're doing a bail-out of the banks for the purpose of producing the liquidity essential to restarting the economy, let them take bonuses as big as they want, and don't actually require that they loan out to anyone the money you've given them.  Or, how about spending nearly all your political capital on ‘health care' legislation, which is really an insurance company boondoggle bill instead?  That's really what the people want, eh?  No wonder Obama's not out there writing the narrative, fighting the good fight or crushing his enemies.  Even he can't get excited about his own priorities, so extraordinarily abysmal are they. 

All of this represents the best prescription I can imagine for wrecking a presidency, and Obama has followed it with exacting precision.  Indeed, doing so would appear to be his only real passion.  It's almost as if he were a Republican sleeper politician in some party politics version of the Manchurian Candidate, planted to arise on cue and destroy the Democratic Party from within. 

And thus - while anything's possible, of course - I am hard pressed to see how the Obama administration is anything but finished.  Consider his options from here. 

He could turn to the right, like Clinton did in 1994.  But the first problem is that he's already there.  If you look carefully at his policies, he is basically running George Bush's third term.  Regressives (conveniently) forget that.  They call him weak on national security, even while he dramatically escalates the war in Afghanistan, hardly draws down in Iraq, breaks his own promise to close Gitmo, and smashes through the $700 billion mark in military spending for the first time, not even counting Afghanistan's costs.  They ignore his Bush-cloned policies on state secrets, renditions, executive power and other civil liberties issues.  They forget that Bush's health care bill was far more socialistic and far more fiscally irresponsible than Obama's, and that his bail-outs and stimulus actions were almost identical.  So, in short, for Obama to turn to starboard at this point would literally require him to outflank the GOP to its right.  Moreover, the Limbaughs and Becks and Palins would still excoriate him, no matter what.  Worse still, such policies would only make the lives of ordinary Americans a lot worse, just as they have been doing for thirty years now.  So what could be gained by a turn to the right? 

Second, he could go small-bore, as Clinton also did in the 1990s.  But, of course, these aren't the 1990s.  FDR didn't win four terms during a Great Depression and a world war by focusing on school uniforms and V-chips.  This is not the 1930s or 1940s, but it's close.  People are hurting, frightened and angry.  Obama is suffering badly already because he is not addressing their very tangible concerns.  More of the same policy-wise will produce more of the same politically.  Going this route, he'd be lucky if the public was kind enough to let him finish his single term as a James Buchanan wannabe, then go home. 

The obvious solution, of course, would be a sharp turn to the left.  Go where the real solutions are.  Fight the good fight.  Call liars ‘liars' and thieves ‘thieves'.  Do the people's business.  Become their advocate against the monsters bleeding them dry.  Create jobs.  Build infrastructure.  Do real national health care.  End the wars.  Dramatically slash military spending.  Produce actual educational reform.  Launch a massive green energy/jobs program.  Get serious about global warming.  Kick ass on campaign finance reform.  Fight for gay rights.  Restore the New Deal era regulatory framework and expand it.  Restore a fair taxation structure.  Rewrite trade agreements that undermine American jobs.  Rebuild unions.  Fill the spate of vacancies in the federal judiciary, and load those seats up with progressives.  Rally the public to demand that Congress act on your agenda.  Humiliate the regressives in and out of the GOP for their abysmal sell-out policies. 

All of this could be done, and most of it would be very popular, especially if it was backed by an aggressive and righteously angry Oval Office advocate for the people who knew how to use the bully pulpit to shape the narrative, to market ideas, and to mobilize public support. 

But I doubt Obama has anything like the constitution for that sort of presidency.  I think his personal disposition is so strongly controlling of his politics that he would rather preside as a three year lame-duck over a failed one-term presidency, than actually throw an elbow or two and make anyone uncomfortable.  Think how unpleasant it would be. 

Moreover, by blundering during the only chance he'll ever have at introducing his presidency, he's now created an additional set of problems for himself which may well be insurmountable, even if he were to now try to live up to his campaign billing.  He needs Democratic votes in Congress to do much of anything, but they're all focused on the looming tsunami of next November.  The very same people who might have swallowed hard and reluctantly followed the lead of inspirational new president Obama one year ago, today will join everyone else in the world and spit in the eye of useless, feeble, washed-up Barack.  He's got zero leverage over his own party in Congress now.  As for the public, it's gonna be pretty hard to now market himself as the great enemy of the people's enemies, when he's just finished a year of making secret sweetheart deals that benefit Wall Street bankers, health insurance pirates, and pharmaceutical predators, all while leaving his own base and the public he's supposed to be serving out in the rain.  Politicians can reinvent themselves, but you need time and there are certain limits of plausibility that cannot be ignored, any more than you can ignore the laws of physics.

Of course, I don't give a shit about Barack Obama anymore, other than my desire that really ugly things happen to him as payment in kind for the grandest act of betrayal we've seen since Benedict Arnold did his thing.  But what about the country? 

Not so good there, either, I'm afraid.  What happens when you have two parties to choose from, and one of them wrecks the country with dramatically evil policies so radical even backward America hates them, but then you turn to the other party, which spends an entire year on the campaign trail promising change, only to turn out nearly identical to the first lot when in government?  What do you do? 

One option is to find another party.  To some extent that is happening, but absolutely not where it should be.  The tea partyers are the ‘alternative' vision for salvation in today's America.  (Very) unfortunately, they are not alternative in any sense, have almost no coherent vision whatsoever, and - as the possible third right-wing party for voters to choose from, out of three, obviously offer zero salvation whatsoever.  All the tea party lunatics seem to know is that they don't like taxes and they don't like federal spending.  But they can't even tell you what they'd cut if they actually controlled the government.  My guess is that it would be nothing, just like the Republicans before them, or else they'd slash entitlement spending, which would surely make them one of the flashiest flashes ever to get royally panned by the public. 

The other option, which the voters are now exercising, is to continue a process begun in 2006 of voting for the party which is not the party in power.  Today, that means Republicans, as witnessed in Virginia, New Jersey and now Massachusetts.  The absurdity of this, of course, is that it was these exact same people who created this astonishingly thorough mess we find ourselves in.  What is Mitch McConnell or John Boehner or Sarah Palin going to do for Americans who don't have jobs?  Cut taxes they no longer pay (and thus also further increase the national debt, by the way)?  What will they do for those same folks who've lost their health insurance?  Kill Democratic plans, even when they're nothing but corporate giveaways anyhow? 

Americans will simply be more sick, more broke and more unemployed two, four or six years from now than they are at this moment, if they put the Republicans back in control of the government. 

Of course, there's one other possibility, which is that this time the Cheney Party goes balls-to-the-wall, bringing down on our heads a full-on fascist dictatorship, serving corporate interests in total, and likely launching a couple of good wars abroad to complement the complete repression of dissent and freedom of expression at home. 

Ridiculous?  I try pretty hard every day - and it takes some work - to keep my most apocalyptic totalitarian nightmares for this country in check.  But think about this chronological sequence for a second:  The Democrats get killed in November for doing nothing while the public suffers.  But they are still seen as the party in power in 2012, so they get killed even worse, with Obama sent packing and Palin or her equivalent moving into 1600 Pennsylvania Avenue.  But the new radical GOP regime's policies are even more detrimental to voters than Bush's or Obama's.  Maybe the public is distracted for a year or two by some bullshit foreign policy ‘crisis' or another, but pretty soon they're getting real restless.  After about six years now of suffering badly, they're getting real surly, and ‘anti-incumbent' doesn't begin to describe the mood of the country.  Now they really want some serious change. 

Of course, anything can happen - but which part of that sequence seems improbable?  And if the answer is none, then the salient question becomes:  What does the regime do at that point, faced with an angry mob?  What are the Dick Cheneys and Sarah Palins of this world committed to?  What are they capable of when pressed? 

I don't think those questions really require a response.  I think we all know pretty well the answers. 

This is the country that Obama - the great Hope guy - is bequeathing us. 

Dante said "The hottest places in hell are reserved for those who in times of great moral crises maintain their neutrality". 

Better stock up on the mist sprayers, Barack. 

David Michael Green is a professor of political science at Hofstra University in New York. He is delighted to receive readers' reactions to his articles (mailto:[email protected]), but regrets that time constraints do not always allow him to respond. More of his work can be found at his website, www.regressiveantidote.net.

Now That the Senate Is Not Filibuster-proof, Forget Financial Reform or Job Creation

by John Lawrence

OK, a day after the Democrats lose control of the Senate and hence the democratic process, Obama decides to get tough on the banks. However, with the Republicans now controlling the Senate, not only will Obama's new get-tough proposals not pass, not even moderate financial reform will pass. In fact the banksters will have their way. There will be no Consumer Financial Protection Agency nor anything else. The Democrats blew it. They pussyfooted around for a whole year on health care which now turns out to have been a complete waste and disaster. They'll get nothing passed this year because of Mr. Brown's forty first vote. If the Dems put forward health care, the Repubs will yell filibuster. If they put forth financial reform, the Repubs will yell filibuster. If they put forward a jobs program, the Repubs will yell filibuster. In short, unless the Dems attrack the filibuster rule, they will get absolutely nowhere.

The House can pass all the legislation it wants, but it is an excercise in futility. It's a total waste of time if it doesn't also pass the Senate, and it won't. The Repubs have taken Obama for a ride with his professed bipartisanship. They were never interested in bipartisanship except to pull Obama's chain and jerk him around. Their tactics of delay, delay delay have worked. Now due to all the delay, nothing whatsoever will get done unless Obama pulls a Clinton and decides to triangulate just to have something to show for himself. But that means essentially passing a Republican agenda. How pathetic! All the agonizing over health care for the last year has been the biggest waste of time and excercise in futility in human history. These guys are pathetic! Instead of using their majorities in both Houses to enact health care or anything else, they frittered away their time trying to be nice to Republican attack dogs whose only goal was to make mince meat out of Obama. Now they are more than halfway there. Obama will rue the day the Republicans gained a filibuster proof majority in the Senate. They will proceed to humiliate him in every way they can. Obama will undergo humiliation at the hands of the Republicans worse than any slave master ever delivered to any slave. If you thought the abuse they've delivered up to now was severe, you ain't seen nothing yet. They will be merciless now that they have their quarry exactly where they want him. If you think the excoriation and castigation and aspersions on Obama's character so far have been through the roof, you ain't seen nothing yet.

And the pathetic Democrats will go down to huge defeats in this year's elections. It's not enough to talk tough and pass legislation through the House if nothing ever gets enacted into law. It's an excercise in meaninglessness. It's game over for the Democrats unless they attack the filibuster rule which, I predict, they'll never do. They're too timid to use the so-called nuclear option which is a device for getting around the filibuster, but the Dems will not have the stomach to use it. Instead, they will prevaricate hoping the electorate won't notice that their rhetoric is hollow and meaningless. Talking tough and not taking any action will get them nowhere. I think Obama is more concerned about how he conducts himself so he can go out with dignity even as a one term President rather than really putting himself on the line and attacking the Republicans all out. Of course, the Republicans will have no hesitation in attacking him as if they haven't shown that already.

Another device that could be used is reconciliation which allows legislation to be passed with only 51 votes. It can't be filibustered. The Republicans have used it. Health care could be simplified to let anyone buy into Medicare. The whole thing could be expressed on one sheet of paper. It would be simple and everyone could understand it. The infrastructure is already there. There would be no additional bureaucracy created. It wouldn't require any more interminable wrangling in committee. Just call it Medicare part (e), Medicare for everyone. Will the Democrats do it? I don't think so. They're too timid. There would be an outcry from Republicans and the Democrats would back off like the sheep that they are. They have no idea how to use political power.

The Democrats will have accomplished nothing not because they didn't have good intentions, not because they didn't want to but because they weren't bold enough to take the Republicans on at their own game which is basically a no holds barred effort to take and use political power. They will use any means necessary no matter how devious, no matter how duplicitous to take power, and the Dems are sitting there trying to be polite and conduct themselves with dignity instead of going all out to use the power that they still possess. After all they still have majorities in both Houses and the Presidency. But they were hamstrung even when they had a filibuster-proof majority. Now that they don't, I expect them to just throw up their hands and do their best to cover their asses. And if they do, they will get what they deserve - to be unceremoniously thrown out of their offices onto the streets and told by the Repubs, "Don't bang your ass on the door on the way out."

Ironically, Obama who has gone out of his way to conduct himself with dignity and grace and has tried to treat the Repubs with respect will be shown in return none of any of that by them. They are already circling him like a wolf pack circling their prey. Obama is deluding himself if he thinks he can continue with his "bipartisan approach" now that the Republicans smell blood. And turning his attention to job creation and financial reform is like the Captain of the Titanic turning his attention to ordering more bilge pumps. It's nuts to think that Obama will get anywhere by trying to be nice to the Republicans in the spirit of bipartisanship. As a strategy, bipartisanship has totally failed. Don't they even realize that? Obama has bent over backwards to accomodate the Republicans and all they've done is to tell him to bend further and accuse him of not being bipartisan enough while at the same time they are not even making the slightest gesture at bipartisanship. Obama is just grist for their mill, and they'll grind him to bits now that they have him where they want him.

So where does this leave the American people? They are being led into a trap whereby they will vote themselves out of the frying pan and into the fire if they think the Republicans will do anything about job creation or anything else that will rein in the coroprations and benefit them. No, the Republicans will go full bore to let the corporations get away with anything they want at the expense of the American people. That includes increased joblessness, increased indebtedness, increased erosion of middle class lifestyles. More tax breaks for the rich while at the same time subtly increasing taxes on the poor and middle class. And all the time while they are enabling the complete corporate takeover of the levers of government, they will blame big government for middle class misery. As the middle class slides further into poverty, they will tell them that government doen't work after staffing every regulatory agency with people philosophically opposed to regulation. After defunding the Food and Drug Administration, they will wonder aloud why there are so many outbreaks of food borne diseases and why drugs on the market have such adverse side effects. The American people will be told that letting corporations have anything they want with no regulatory oversight will create jobs while surreptitiously the jobs will be shipped overseas in order to maximize profits. After all labor is only an input and the goal is to reduce the cost of all inputs in order to maximize shareholder value. Meanwhile, they will argue that the CEOs and top executives should make hundreds of millions of dollars a year or else the "talent" will go elsewhere. And corporations should not pay any taxes because that might cut down on job creation.

As more and more wealth is shifted from the poor and middle class to the rich, average Americans will be treated to a barrage of TV ads promoting candidates for office that will do corporate bidding thanks to the Supreme Court's decision to get rid of any restraints whatsoever on corporate political advertising under the premise that corporations, like persons, have unlimited rights of free speech. As ultra right wing conservatives take power, don't expect any social programs to eliminate the plight of the poor. Unemployment benefits will be cut. Aid to education will be cut. Food stamps will be cut. The Federal government will exist only for the purpose of fighting wars, cutting taxes and passing laws that will give corporations anything they want. Consumer protections will be gutted. Credit card rates will soar. Health care costs will skyrocket. People will look back on the promise of the Obama era and wonder why the Democrats didn't do anything with the power they had when they had a chance to do something. Instead, they spun their wheels letting the Republicans jerk them around. Instead, they tried to be nice to the Republicans even after it was apparent that the Republicans had no intentions of being nice to them or cared a fig about the American people.

Why Obama is Now (finally) Getting Tough on Wall Street

by Robert Reich

January 21, 2010

President Obama is now, finally, getting tough on Wall Street. Today he’s giving his support to two measures critically important for making sure the Street doesn’t relapse into another financial crisis: (1) separating the functions of investment banking from commercial banking (basically, resurrecting the Depression-era Glass-Steagall Act) so investment banks can’t gamble with insured commerial deposits, and (2) giving regulatory authorities power to limit the size of big banks so they don’t become “too big to fail,” as antitrust laws do with every other capitalist entity. A few days ago the White House demanded that the biggest banks repay the $120 billion or so still owed the government from the bailout.

All good, all correct, all important. The President deserves at least two cheers. Why not three? It took him over a year to finally get here. The House has already completed its work on financial reform and may be reluctant to start over. The Senate is in disarray since Chris Dodd, chair of the Banking Committee, announced recently he wouldn’t seek reelection, and is poised to compromise with Wall Street on a number of big issues. Neither chamber has shown any interest whatsoever in resurrecting Glass-Steagall or limiting the size and risk of big banks. In other words, much of the game is over.

It’s possible, of course, that Congress could go along with Obama’s new proposals. A populist backlash against the big banks is growing among Americans who can’t understand why Wall Street is back to its old ways even though most Americans are worried about losing their jobs and homes as a result of Wall Street’s massive implosion in 2008. And they’ve never been able to understand why taxpayers bailed out Wall Street while Main Street still languishes.

A cynic might conclude that Obama’s born-again populism is for the cameras. Scott Brown’s upset victory in Massachusetts revealed the strength of I’m-mad-as-hell populism in the electorate right now. Add in the $150 billion of bonuses the Street is about to bestow on itself and the outrage meter could blow. With sky-high unemployment and surly voters, Democrats have to show they’re on the side of the people, not the powerful, as Al Gore put it in the last days of the 2000 election (too late to help himself).

For almost a year now, Democratic pollsters have been pointing out how much the public hates the bank bailout and despises Wall Street. But there was no reason for Democratic leaders in Congress or the White House to pay much attention. After all, it was a Republican president and a Republican Congress that came up with the bank bailout plan to begin with. Some stalwart Republicans had grumbled about it, of course, but Republicans have always been on the side of Wall Street and big business and  weren’t likely to call for strong measures to prevent the Street from getting into trouble again.

Larry Summers and Tim Geithner scuttled Paul Volcker’s plan to separate the banks’ commercial and investment functions, and didn’t want to limit the size of banks or the risks they could take on. Summers and Geithner have wanted to get the banks back to profitability as soon as possible. And Dems in Congress have had no stomach to take on Wall Street, a major source of campaign funding.

But suddenly the winds are blowing in a different direction over the Potomac. The 2010 midterms are getting closer, and the Dems are scared. Their polls are plummeting. The upsurge in mad-as-hell populism requires that Democrats become indignant on behalf of Americans, and indignation is meaningless without a target. They can’t target big government because Republicans do that one better, especially when they’re out of power. So what’s the alternative? Wall Street.

Perhaps I’m being too cynical. Maybe the Obama and congressional Democrats are now ready to give up Wall Street trickle-down economics and focus on Main Street trickle-up. “There are two ideas of government,” said William Jennings Bryan at the Democratic National Convention in Chicago in 1896. “There are those who believe that you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.” He couldn’t have said it better.

What Scott Brown's Victory Really Means

by Robert Reich
Wednesday, January 20, 2010

Get ready for the bromides.

From the right: Just goes to show the country is against Democratic tax-and-spend. Obama’s agenda is in ruins, heath-care is over, the GOP has a good chance of taking back Congress next November. Now, even congessional Democrats will move to the right.

From the left: Just goes to show Obama should never have cozied up to Wall Street, Big Pharma, and Big Insurance. He compromised too much. The Democratic base lost faith in him. The only answer is for Obama and congressional Dems to turn left.

Don’t believe any of it. Here’s what’s really going on. In Massachusetts, in New Jersey, all over the nation, voters are petrified of losing their jobs, their homes, and what’s left of their savings. Nothing counts more than the economy. Rightly or wrongly, presidents and the party in power are blamed when the economy is lousy. Voters fired Jimmy Carter in 1980 because the economy went south. They fired George Bush the first in 1992 because the economy was awful. They fired congressional Democrats in 1994 because the economy was still awful. And they’re in the process of firing Obama and the Democrats — unless or until the economy turns around.

What happens next November depends both on the extent of joblessness and the direction the economy is moving in. The usual political rule is voters pay more attention to the latter. They’ll forgive even relatively high unemployment if they’re confident the economy is improving. But that old rule hasn’t been tested under conditions of extremely high unemployment. If next November one in five Americans is still unemployed or underemployed or working at lower pay than before the Great Recession, voters may not care that the economy is showing signs of improvement. They’ll vote the rascals out.

Yet when it comes to doing more about the jobs crisis, Obama and the Dems are in a box. The only sure-fire way to get jobs back is for them to do more deficit spending. After all, consumers are still in no mood to spend, businesses won’t invest without consumers to buy the fruits of such investments, and exports are still in the tank. Government remains the purchaser of last resort. (And for those of you still unconvinced, focus on the ratio of debt to GDP, and know that it won’t improve until the denominator of that equation — the GDP — starts growing quickly again, which won’t happen until there’s sufficient overall demand.)

But now, especially after the debacle in Massachusetts, there aren’t likely to be enough votes for more deficit spending. Blue-Dog Democrats will use the election results to argue for “fiscal responsibility” and join Republicans in exhuming Herbert Hoover. Which means no big jobs package. Which means, barring a miracle, continued high unemployment and underemployment. The economy will be doing better in November than it is today — consumers have to replace cars and appliances that have worn out, companies have to replace inventories that have worn thin — but not so much better that voters will breathe easier.

The Republicans won’t have easy sailing from here on, either. Brown’s victory has given more muscle to the tea-partiers — the rag-tag group of angry no-nothings who are challenging mainstream Republicans in primaries all over the country. Tea partiers have almost as much contempt for the Republican establishment as they do for Democrats. Brown himself is no tea-partier; in fact, his record in Massachusetts is quite moderate. But the partiers will use him nonetheless. And if Republicans move to the right fringe, Democrats have more room to attract moderates and Independents.

What really worries me is a basic fact, borne out by history. Deep and continuing economic stresses bring out demagogues, xenophobes, racists, and opportunists who channel people’s fears and anxieties into resentments against other people. If this awful economy goes on much longer, the extreme right could meet the extreme left in a place called “I’m mad as hell and am not gonna take it any more,” and form a third party that attracts everyone who feels disempowered and dumped on — and who want to blame someone else for what’s happened to them. Then, watch out.

Frank Thomas on the Massachusetts Election Result

by Frank Thomas, January 21, 2010

A BROKEN-DOWN SYSTEM OF GOVERNANCE

The Democratic loss in MA is a wakeup call to the convoluted, divisive  governance of our much acclaimed social-political system – a system  failing more and more miserably in employing the best of human thought and integrating the best of the old with what must be new to solve huge problems threatening the general welfare and economic progress of Middle and Upper class American [Ed. note: also Lower class] households in the 21st century.    

Obama is now seen by his supporters, e.g., in Massachusetts, as having walked away from his campaign promise of a paradigm transformation of how business is done in Washington …. a modus operendi for the past 30 years that has left the Middle Class to their own survival wares and charitable mercy of Upper Class interests. This is hauntingly true in context of the broken two-party “all or nothing”  political culture that pits the INS against the OUTS and the OUTs against the INS irregardless of the human cost or pain to the jobless, homeless, uninsured and underinsured COLLECTIVE …. with the lobbyist money parasites ultimately calling the policy shots.

In short, our democratic form of government predicated on the hallowed principle: “by, of, and for the people” has been transformed into an institution signed, sealed and delivered by the wealthy monied interests. Both political parties are trapped in this ignominious, morally corrupt game. Result? Political survival by gracing the lobby money tree is more important than tending to our common values, shared environment and goals, e.g., a well-educated, healthy, employed, law-abiding workforce …. where freedom, economic opportunity, a fair playing field and protection of property rights are everyone’s inalienable rights.   

In our broken-down governance, however, good ideas for improving this common social infrastructure get legislatively politicized to extinction. Despite this, Obama’s Administration has achieved wonders: an $800 billion infrastructure stimulus and job generating package (which most esteemed economists see as still inadequate) that has averted a Depression, and Senate/House approval for a much compromised general health care bill (not achieved in 60 years) – albeit at the price of weakly focusing on cost reduction and foolishly cutting sweetheart deals with the drug and insurer industries.

But when Republicans robotically use the filibuster and vote 100% unity against all Democratic bills to destroy Obama’s Presidency at any cost and which is supported by Blue Democrats – the latter elected on Obama’s 2008 election wings and fearful of not being re-elected in conservative states – let’s recognize that a fickle voting public is courting a return to dysfunctional governance. Result? ..., a “ME FIRST” governing process that is paralyzed by systemic infighting, do-nothing stallmates and a Republican taste for a Reaganite survival-of-the-fittest culture comprising the best, brightest and richest while watching over 70% of American households struggle in the garbage can of minimum wages and meager benefits.

If Republicans succeed in their from-the-start goal to make Obama’s governing program ineffective, thus contributing to his failure to be reelected in 2012, then we can all watch as Democrats extract their revenge by also resorting to the filibuster and obstructing all Republican initiatives. Result? Our nation goes through another decade or more of do nothing government bringing us closer to undeveloped nation status with regard to quality of life, employment stability, minimum social-nets, etc.

The system as it now operates inevitably causes vital legislation to be watered-down to a level of mediocrity (incomprehensibility and exceptions engineered by lawyers) where nobody wins in the end. Will Republican Governor Hoeven or Duane Sand of North Dakota (unannounced, announced candidates, respectively, for US Senate) or recently elected State Senator Scott Brown of MA strongly support the  access, coverage, affordability and quality of America’s health care system for All? No! The cry immediately after Brown’s victory is that health care is DEAD! Will they be creative in promoting government incentives that will stimulate job growth, job retraining and renewed manufacturing for the working class …. or will overt job destruction by outsourcing, automation, roboticizing redundancies continue as the normal business of the day? Will they support a tough set of rules/regulations to minimize another financial disaster with another round of brutal pension and job losses for Main Street? Answer? Highly unlikely! They’ll simply feel obliged to block any plan not welcomed by the monied interests that got them elected …. just as the Blue Democrats are doing. It’s all about winning at any cost...   

Fellow Americans who can still think outside the box, Wake Up. The system is broken! We must constructively, fairly, humanely repair it.  
Political stallmate will also insure there will be neither real reform of the world’s most costly, poor-coverage health care system nor real reform of an out-of-sight-unregulated, greedy financial system. After the bailouts, the banks are now laughing all the way to the bank while the “not bailed out” jobless and homeless suffer on. Banks that were too big to fail are now bigger than ever … enjoying the implicit guarantee that if trouble returns, taxpayers will bail them out. Mainstream Americans will then again see their standard of living and quality of life further decline in the next crisis. The power oligarchy of the rich over the impoverished that we have nurtured will deepen, laying naked a democracy “by, of, and for the people” as pure myth rather than reality.   

The governing system is broken. It’s in a morass where every politician is valued on what he or she said or did yesterday ... unleashing hysterical outbursts, irrational fear and debate, quick, fickle prejudgments, impatience, a culture of lies, even hatred … all directed at our first black President who after all is humanly capable of mistakes like anyone else. But a President, who I also believe is trying his brillant best to salvage a sinking ship suffering from multiple structural disrepairs and internal stresses ever since Reagan’s Presidency which incentivised our people’s worst human impulses of self-interest, greed, and vulnerabilty.

If we can’t creatively and pragmatically come together around our Individual and Common interests (as magnanimously as we are for Haitians), if politicians, corrupted by lobbyist money and that of the far right, continue to have free hand to empower Vested interests and an everyone for himself/herself cultural ethic – legitimized by repeating the usual phoney, self-serving, politically manipulated verbalisms, “freedom and liberty, small government and low taxes,” – then very dark days lie ahead for the America I grew up in during Presidents’ Harry Truman and Dwight D.Eisenhower’s time.  

For in the 50s and 60s we had an America where Balance and Equity between government and market mechanisms for Individual and Community progress were the values guiding societal norms … AN AMERICA, barring the Vietnam War, at peace and equilibrium with its citizens' needs and aspirations.

China economy sees strong growth

From BBC News, 21 January 2010

China has said its economy expanded by 8.7% in 2009, exceeding even the government's own initial expectations.

The pace of change increased as the year went on, with growth in the final quarter of 2009 increasing by 10.7% from the same period a year earlier.

China is now on course to overtake Japan and become the world's second-biggest economy.

Japan announces its latest quarterly gross domestic product (GDP) figures next month.

The Japanese economy is likely to have contracted by about 6% in 2009.

'What the world needs'

Jim O'Neill, chief economist at Goldman Sachs, said that China had come up with "a very smart policy stimulus" and that some aspects of the financial crisis may not have been a bad thing.

ANALYSIS Chris Hogg, BBC News, Shanghai Officials say China's economic stimulus package - the largest in the world in proportion to the size of the economy - helped China to rebuild and recover. A year ago the concern was that economic growth here would be too weak. Now the fear is that it could be becoming too strong. Investors here are nervous because it's not clear yet what action the government will take to try to ensure this recovery is sustainable. Interest rates could rise. The country's currency may be allowed to gain in value against the dollar. Lending controls are likely to be tightened.

"[In] November 2008, they came up with a quick, aggressive fiscal and monetary response which has worked," he told BBC Radio 4's World At One programme.

"They have replaced exports with domestic demand, both consumption and investment... China has become more important as America [has become] less, which is what the world needs."

He said part of the reason behind the global crisis was that the world had become dependent on the US consumer, and the realisation of that had now forced countries to stand up for themselves.

"The most important one is China and their economy is now being driven by their own domestic economy, which will not only be increasingly important for them but important for everyone else including - directly and indirectly - people in Britain," he said.

'Right direction'

China's GDP announcement was made by Ma Jiantang, head of the National Bureau of Statistics.

He said China had faced "severe difficulties" in 2009, but its economy has now recovered and was moving in the right direction.

Annual growth was only slightly down on 2008.

These latest GDP figures have exceeded the target set by the Chinese government, the BBC's Chris Hogg in Shanghai says.

This is a turnaround because China, like other countries across the world, was hit by the economic crisis during late 2008 and early 2009. Factories closed and workers were laid off.

The economy recovered with the help of a massive government stimulus package but now there are signs it is expanding too quickly.

"There's very strong growth but there's real concern about the quality of the growth and what will happen when the stimulus is withdrawn," said Michael Pettis, professor of finance at Peking University.

"It seems pretty clear that any withdrawal of the investment stimulus is going to have a big impact on growth."

Inflation is also picking up, with consumer prices increasing by 1.9% in December from a year earlier.

Chinese authorities are expected to now take measures to prevent the economy from overheating.

Economists expect interest rates to rise, while banks have already been ordered to keep more money in reserve, and reports say some have even been told to stop lending for the rest of January.

ANALYSIS Roland Buerk, BBC News, Tokyo It is impossible to know for certain yet but economists may look back and say this was the moment China overtook Japan to become the world's second biggest economy. What is not in doubt is their trajectories. China is powering ahead while Japan is slipping behind. It should be remembered, though, that as China's population is 10 times the size of Japan's, even if its overall economy is bigger, Japanese people remain vastly richer than those in China. During the 1980s it was Japan which was rising, and some predicted then it would one day even overtake America. But then there was a crash followed by two decades of stagnation.

'China's reality'

But Mr Ma played down speculation that China's economy had now overtaken Japan's.

"According to the UN standard - that is $1 a day - there are still 150 million poor people in China. That is China's reality," he said.

"So despite the increase in our GDP and economic strength, we still have to recognise that China is still a developing country."

On inflation, he said that price rises were "mild and under control".

Predictions

Meanwhile, the World Bank has said that the global economic recovery will slow later this year as the impact of government stimulus policies wanes.

The Bank has forecast growth of 2.7% this year after a contraction in 2009.

However, its predictions for Japan are slightly less pessimistic than other forecasters. It estimates that Japan's economy shrunk by 5.4% last year.

It added that the poorest countries - those that rely on grants or subsidised lending - may require an additional $35bn to $50bn in funding just to sustain pre-crisis social programmes.

China is expected to become the world's biggest economy in 2030.

A Pinch Less Salt Could Save Lives, Money

By PEGGY PECK
MedPage Today
Jan. 21, 2010

Cutting daily salt intake by three grams – just over a teaspoon -- could prevent 32,000 strokes and 54,000 heart attacks a year. So say researchers at the University of California, San Francisco who developed a novel computer program to predict the clinical impact of salt reduction.

Using a computer model to simulate the impact of heart disease in U.S. adults age 35 to 84, the researchers found that even reducing salt intake by a mere one gram per day over the next decade would be a more cost-effective strategy for treating hypertension than use of even the cheapest antihypertensive drug

Using the computer model to simulate the impact of heart disease in U.S. adults age 35 to 84, the researchers found that even reducing salt intake by a mere one gram per day over the next decade would be a more cost-effective strategy for treating hypertension than use of even the cheapest antihypertensive drug, Dr. Kirsten Bibbins-Domingo and colleagues wrote in a paper published online today by the New England Journal of Medicine.

Dr. Lee Goldman of Columbia University, who co-authored the paper, told MedPage Today that study builds on what has long been known about the adverse health effects of a society that seems to believe that salt is the spice of life.

For example, Goldman said that most people seeking a healthy choice will check food labels and restaurant menus for calorie counts and trans fats, but will not pay attention to salt.

This is not the first time a call for salt reduction has been issued; as recently as last November, a review of past research published in the British Medical Journal suggested that if everyone cut their salt intake in half – all told, a reduction of about 5 grams a day -- they would lower the stroke rate by 23 percent and reduce overall cardiovascular disease by as much as 17 percent.

Americans, like those in many Western countries, average about 10 grams of daily salt intake, whereas the World Health Organization recommends only 5 grams per day, and the U.S. Department of Agriculture recommends daily intake be limited to 5.8 grams.

But even reductions that would simply bring Americans closer to this ideal could have big effects, the new study suggests. Bibbins-Domingo and colleagues reported that a three-gram-per-day reduction in dietary salt would "save 194,000 to 392,000 quality-adjusted life-years and $10 billion to $24 billion in health care costs annually," while more modest one-gram reduction over the next decade would "be more cost effective than using medications to lower blood pressure in all persons with hypertension."

In an editorial that accompanied the study, Dr. Lawrence Appel and Cheryl A.M. Anderson of Johns Hopkins University, wrote that "the evidence supporting the call to reduce salt intake as a means of preventing cardiovascular disease is compelling... As we deliberate health care reform, let us not neglect this inexpensive, yet highly effective public health intervention for the prevention of disease."

(Appel, incidentally, was also first author on a position paper from the American Society of Hypertension that also called for salt reduction as public policy.)

Dr. Franz Messerli, director of the hypertension program at St. Luke's-Roosevelt Hospital, said the computer model used in the study was impressive -- but he added that it probably even underestimated the benefit of reducing dietary salt.

This, he said, is because "salt reduction has been shown to have a direct [blood pressure independent] effect on the heart, the brain, the kidneys and also reduce stomach cancer and osteoporosis -- factors that were not considered in this analysis."

But Messerli found it difficult to lead the victory parade, noting, "this is a modeling study, and statements such as, 'A modest reduction of one gram per day would be more cost effective than using medication to lower blood pressure in all persons with hypertension' are to be taken with a good grain of salt."

Messerli's measured response was not echoed by his colleagues in the hypertension world. Dr. Henry Black, president of the American Society of Hypertension and director of hypertension research at the New York University School of Medicine, said that while the paper extended the findings of many other studies, the new work is "more comprehensive and is especially useful by comparing the benefits of [sodium] and [salt] reduction to those of other widely accepted public health approaches that the public and governmental bodies have embraced, including drug treatment."

Dr. Clyde Yancy, president of the American Heart Association, said that while the study was a computer modeling analysis, in terms of research on this topic it may be as good as it gets. "It would be impossible to do a randomized trial in large numbers of high vs. low sodium consumption, and the use of modeling with reasonable assumptions represents a solid if not ideal alternative," he said.

Yancy went so far as to say that the data from this study could provide a strong enough imperative to set or change national policy.

Still, for average Americans, cutting back on salt could be a hard concept to swallow. While it's true that three grams of salt comes to about a teaspoonful, Goldman said it was foolish to think of sodium reduction in terms of such measurements because some much sodium comes from processed foods and from restaurant food. For that reason, he said, achieving the needed reduction requires a concerted national effort.

The Massachusetts Lesson: Go Populist Now

From Common Dreams

 

Published on Wednesday, January 20, 2010 by The Nation

by Katrina vanden Heuvel

Election results rarely have a single explanation.

Yet it's pretty clear that Scott Brown's special election win in a state that last sent a Republican to the Senate in 1978 is an indicator of the turbulent national political mood a year after Obama took office.

There is a generalized anti-establishment anger at loose in this country, reinforced by a White House team that has delivered for Wall Street but not enough for hurting communities. It is an anger also fueled by often savage right-wing anti-government attacks.

This special election is a wake up call and should lead to a course correction. The Democratic party can no longer run as a managerial and technocratic party. Going populist is now smart politics and good policy.

The Obama White House needs to show, quickly and forcefully, with concrete, bold and visible action, that it stands with the working people of America. Here's a symbolic but smart start: jettison those on the White House economic team whose slow, timid response to the crisis of unemployment and to Wall Street's obscene excesses helped create the conditions for the Tea Party's inchoate right-wing populism.

Leadership on pro-democracy reforms are also desperately needed to end the corruption of our politics and to stanch the corporate money flooding and deforming our democracy. Connect the dots for people: explain how needed reforms are gutted when both parties succumb to the pervasive corruption of our money politics. If the GOP's obstructionism has a silver lining, it is in exposing how an anti-democratic, super-majority filibuster has essentially made our system dysfunctional. There is fertile ground on which to rally people in a transpartisan political reform movement.

Massachusetts offers another lesson: Obama's decision to demobilize his base in 2009 in favor of an insider approach to governing was a big mistake. I'm not a political strategist, but I don't know how you win elections by failing to rouse people who've worked hardest at the grassroots to get you elected? It is time to re-mobilize the base.

And here's a no-brainer: Isn't it time to give up on that faith in genteel post-partisanship when the GOP knifes you at every turn? Nice isn't going create more jobs or get health care reform.

Before pivoting to a laser-like focus on jobs and the economy, passing the strongest possible healthcare bill as quickly as is feasible is a top priority.There are various procedural options being considered. (Passing the Senate bill followed by changes via budget reconciliation may be a smart and even realistic idea.) Passing a bill won't be the Democrats' political salvation--but if Obama and his party fail it would be the most catastrophic legislative failure since 1994 and possibly snuff out any chance for reform in other arenas moving forward.

President Obama warned us that change wouldn't come easy. Many believe he hasn't held up his end in fighting hard enough for key progressive priorities.

What comes next will test the President's willingness to learn the lessons of this last year. Get tough, get bold, kiss "post-partisanship" goodbye and fight hard for jobs and a just economy of shared prosperity. And put yourself squarely back on the side of working people.

President Obama: Don't pay attention to those who counsel going slow. The only thing you have to fear is caution itself.

© 2010 The Nation

Katrina vanden Heuvel is editor of The Nation.

Dems Must Pass Health Care Now or They're Toast

by John Lawrence

When does conciliation become capitulation? The Democrats have tried to be nice guys, and now they're faced with the situation, because of the loss of Ted Kennedy's Senate seat, that they've got to get tough and pass health care or else they will be commiting political suicide. Obama has set a tone of centrism. He's tried to be bipartisan - all to no avail. At this point the Democrats, having spent a year on health care, can't afford to spend any more time on it. The Republicnas have delayed and delayed and drug their feet. Hundreds if not thousands of man and woman hours of the time of congressmen and senators have been spent on it only to be faced with the situation of either having to fight for their lives or give in to the Republican agenda. It's been nerve wracking, nail biting, frustrating, enervating, and it all could have been avoided if the Democrats had used all the power at their disposal in the first place instead of trying to be palsy walsy with the Republicans who have not cut them one iota of political slack.

The Republicans have been a united, determined enemy whose motive has not been to do anything to benefit the American people. Instead their motive has been solely to defeat Obama and the Democrats and take back power in 2010 and 2012. Well, yesterday they took back power before the 2010 elections when Scott Brown defeated Martha Coakley for Ted Kennedy's Senate seat. Ted must be rolling over in his grave. He was a man who fought for health care all his life and to think that his replacement would result in a year long effort coming to nought is just ... unthinkable. Now the Democrats will have to prove if they're really wimps or not. Obama will have to adopt a different, more determined tone. They will have to fight for it.

The country simply needs to put health care behind us. Too much time has been wasted on it already. Obama's and Congress' attention needs to be all out on jobs. But they can't simply drop it and admit defeat. They have to pass something, anything and then fix it later. The simplest way is for the House to simply pass the Senate version and get it on Obama's desk to sign. Then go on. The Democrats must think strategically. They've given up too much already courting Olympia Snowe and making other conciliatrory gestures towards the Republicans. They've wasted oodles of time dicking around in the Senate Finance Committee. They've fooled around and fooled around, and now they've lost their filibuster proof majority.

Accepting the filibuster is another way the Democrats have acquiesced. They should have mounted a full scale attack on the filibuster which has become a means of preventing any and all legislation Republicans don't like which is to say any legislation which might be chalked up as a Democratic success. Instead the Dems just accepted it as the "new normal." It should only take a majority of 51 votes in the Senate, not a filibuster proof majority of 60.The Democrats have already put themselves through the humiliating spectacle of having the likes of Joe Lieberman and Ben Nelson dictate policy to them, and now, after all that they are faced with, comes the spectacle of either facing total defeat or actually fighting for a change. Being nice to the Republicans has been a total wasted effort that's only led them down the path to defeat. They can still pull this out but they've got to fight for it now. And if they do, you know the Republicans are going to howl like they've never howled before. So what? Let them.

It's either the Democrats fight now as a last stand or they become irrelevant and go down to defeat in this year's elections and in 2012. If they fight now and still lose their seats at least they would have stood one time on principle. As much as the electorate is disenchanted with the Obama administration, they will be even worse off if the Republicans take over again. It will be out of the frying pan and into the fire. If Obama and the Democrats can't make a last ditch effort to pass health care, it will amount to falling on their swords and accepting defeat. The corporatists will have won. The American middle class can kiss its collective ass good-bye. Do they think the Republicans will get them their jobs back? Do they think the Republicans will rein in the banks? A Republican take-over any time in the near future will spell doom for the middle class. The policies that took us over the edge will be reinstated. Corporations will achieve complete dominance over the political system with the aid and abetting of the Republicans. Fickle voters will have screwed themselves.

In hindsight all of Obama's conciliatory gestures have been a total waste. We know he wants to be seen by history as a nice guy, but this is ridiculous. He wants to go out with dignity as the first African American President. But the Republicans, as mean spirited as they've been to him up to now, will proceed to make mince meat out of him from now on if he doesn't use every tool in his arsenal to defeat them. You have to fight fire with fire. If he doesn't, he won't be remembered as the first African American President who conducted himself with dignity. He'll be remembered as the first African American President that was totally ineffectual and whose ass was drug through the mud by Republicans, the first African American President to get a total whuppin'.

The Democrats cannot afford to waste any more time on parliamentary niceties. Right now the whole US democratic process is seen as largely a joke. The Congress has proved itself to be a totally antiquated, ineffectual, sclerotic bunch of Democratic nambi pambis with Republican attack dogs nipping at their heels. Will the Democrats stand up to them for once even if they go down to defeat? How can a party with majorities in both Houses and the Presidency fail to get anything done? Will they attack the filibuster rule or render it moot? Will they use reconciliation to get around it? Whatever they do, they need to resolve health care and get it resolved quickly so they can concentrate for the rest of the year on jobs. And they need to get out of the middle of the road and take a more radical stance. Their half measure approaches have not worked so far and haven't gotten them anywhere. Obama better get rid of Geithner and Summers and anybody else closely related to Wall Street. The election yesterday should be a wake-up call. Conciliation doesn't work. Americans want jobs and they want them now ... by any means necessary!

Tea Partiers Anger and Frustration Misguided

by John Lawrence

Whoever would have thought that a populist political movement in the US would end up being a right wing anti-government, pro-corporatist jihad? Wouldn't the need for better health care, more jobs and decent education more naturally be a left wing cause, a progressive cause? One would think so, but that's not the way it is. The union movement, the movement for better working conditions and decent pay, was a left wing movement. It was anti-corporatist and government was the good guy in championing the rights of American workers. But that was a brief moment in American history when FDR was President. Today unions have been compeletly emasculated, they're powerless, and, while jobs are being shipped overseas by corporations whose only loyalty is to the bottom line, there is no public clamor for government to do something about it.

Instead there's a call for smaller government which is essentially translated as lower taxes. While government goes further and further into debt because taxes have been consistently lowered for the last 30 years under Republican and Republican light administrations, the net consequence of this call for smaller government is that government has essentially bankrupted itself. Instead of funding Medicare Part D by raising taxes, Bush Jr left it unfunded which meant that it was paid for by just adding to the government debt. This has just undermined government as a viable entity that can accomplish anything. When Obama called the bankers to the Oval Office for a dressing down, almost half of them didn't bother to show up. They were probably thinking, "This guy makes $400,000. a year and I make $40 million. Why should I bother to be summoned by him?" It just goes to show who has the real power. The US government is emasculating itself while at the same time pretending it controls the world by overspending on its military-industrial complex driving itself even further into debt.

The Republican party has chosen to just be a handmaiden of corporate interests because private enterprise is so much superior to government enterprise. But is it, really? We've been conditioned to believe by Reagan and others that government is the problem, not the solution. Reagan said, "The nine most feared words in the English language are 'I'm from the government, and I'm here to help'." Really? If a democratically elected government that's supposed to be by, of and for the people is not here to help us, then God help us. But what is the solution then, corporations? Give me a break. Corporations act in their own interests, not in the interests of the average American. And in order to do this, they take advantage of the average American. The average American is their dupe, celebrities appearing in TV ads are their shills. Corporations are not our saviours. They used to provide jobs when it was in their interest to do so. But they're under no obligation to provide jobs, and, after they realized that cheaper labor could be found elsewhere, they jumped ship from the American labor force. By outsourcing and downsizing, they increased their profit margins so they were happy with the result because their bottom line ethic is the maximization of profits, not the provision of jobs.

The left, so prominent in the 1960s when the anti-war movement was in vogue, is missing in action. Instead right wing demagogues like Rush Limbaugh and Glen Beck dominate the airwaves, virtual propaganda machines making millions for themselves in the process. Right wing tirades sell; left wing intellectualism doesn't. Progressive media does not have the scope or penetration that right wing media does. And the right wing is all about catering to people's fears, anger and frustration while keeping people ignorant of the source of their angst. Logically, government is not the problem, as Reagan suggested, when banks are charging exhorbitant credit card interest rates after being bailed out with taxpayer money unless government is in cahoots with the banksters. Under Republican administrations, government is in cahoots with the banksters, but under the Obama administration government ostensibly wants to regulate the banksters but is ineffective in doing so due to bankster lobbying power. So government is either pro-corporatist under Republican administrations or well-intentioned but ineffectual anti-corporatist under Democratic ones.

The same holds for health care. The health insurance lobby is a formidable opponent. Despite the best of intentions to reform health care, the Obama administration, after hours, days and months of work by hundreds of intelligent and worthy people, the result is either a health care bill opposed by a majority of the American people or a quirk of fate in which one Senator replacing a Senator, whose life's work was health care reform, can make the whole excercise meaningless and worthless - a total waste of time and energy.

The American people in their zeal and frustration take it out on the incumbants and are willing to replace mostly well-intentioned people with mostly ill-intentioned people who, nevertheless, promise them what they want to hear. Advertising is effective and political candidates are advertising machines for whom there is no requirement to either tell the truth or to represent their true intentions. They are snake oil salesmen intent on advancing their own financial interests by means of acquiring power and influence. Case in point: Sarah Palin. She capitalized on her moment in the political spotlight to make millions through book and TV deals. And then there's the revolving door which enables former congressmen and senators to get rich lobbying former colleagues.

Advertising and lobbying work. Otherwise, rich people and corporations would not spend millions on it. The American people are easily led. It just takes money to lead them, and rich people have the means to do so. Rather than study the issues for themselves the American people would rather watch foootball, sitcoms, and reality shows on TV. Then there is only time to latch onto some slogans provided by political infotainment. It's the lazy way out. The Romans gave their constituents bread and circuses. American elites give mainly circuses as the bread in the form of jobs has mainly departed for foreign shores where labor is cheaper, and circuses, while cheap, still require the price of admission.

The looming ineffectiveness of the Obama administration is a harbinger of the diminution of power of the American government to help its own people. If government simply becomes an adjunct to powerful corporations, letting their lobbyists write the laws, capitulating to their every demand, letting underfunding of itself contribute to its own demise, then the American people will truly be at the mercy of the corporations which will end up running their lives. If government can't be the defender and protector of the American people, it will come to be seen as useless except as a tool of restraint to be used when advertising and demagoguery aren't sufficient to keep people in line. Good citizenship and ethics are being dictated not by religious organizations but by the likes of People magazine which points out the foibles and failings of celebrities and by banks who charge for every failure to make an orderly payment, a little slap on the wrist for not being punctual.

Good corporate citizens will attempt to survive by currying favor with human resource specialists, with anyone who might be in a position to offer them a job. They will subscribe to the ethics of the corporation, give up their right of free speech, dutifully become whatever it is that motivational speakers tell them to become in order to get a job. They will not give up on the system. They will be good tea partyers. They will buy lottery tickets, despite their poverty, in the hopes of one day living like their idols and becoming rich. They will be for lower taxes because the rich will tell them that's what they should be for. Neocons and neoliberals have convinced them that privatization is the way to go, and that means turning over civic institutions and values to private corporations. That means defining the American Way to be that which enriches mainline corporations rather than what contributes to the quality of life. That means consumerism rather than recognizing that everything of value doesn't necessarily have a price tag associated with it. That means ignoring the degradation and despoiliation of the environment because that's the traditional American way. That means going back to the 1950s, the era when cars were king and people had tail fin envy. That means believing that God will ensure that the earth will always be habitable and all we need to do is to believe and work hard and acquire more.

So the phenomenon of the tea party is not surprising. Americans feel entitled to their lifestyle, a lifestyle of consumerism, a lifestyle of consuming the majority of the world's resources while a billion people on the face of the earth live on less than a dollar a day. There is no ethic of sharing because that would mean reducing a consumerist lifestyle so that others could have even the decent basics like clean water, adequate food, medical care and shelter. Instead Americans are exceptionalists and entitled because that's the way it's always been and that's the way it always will be. World without end. However, the American empire need not always prevail as history has shown. The Roman empire, the British empire, the empires of Ghengis Khan and Alexander the Great - they all went the way of Ozymandias, King of Kings. "'Look on my works, ye mighty, and despair.' ... Round the decay of that colossal wreck, boundless and bare, the lone and level sands stretch far away." Great empires that have overspent and underperformed have gone the way of Ozymandias, a heap of rubble in the desert. The US by systematically and enthusiastically underfunding and reducing the power of its government to sustain the well-being of its people and helping others abroad to live a sustainable lifestyle is running the risk of ending up like Ozymandias.

Health Care in the Balance of Today's Election in Mass.

Published on Monday, January 18, 2010 by Huffington Post

A Wake Up Call from Massachussetts

by Robert Kuttner

How could the health care issue have turned from a reform that was going to make Barack Obama ten feet tall into a poison pill for Democratic senators? Whether or not Martha Coakley squeaks through in Massachusetts on Tuesday, the health bill has already done incalculable political damage and will likely do more. Polls show that the public now opposes it by margins averaging ten to fifteen points, and widening. It is hard to know which will be the worse political defeat -- losing the bill and looking weak, or passing it and leaving it as a piñata for Republicans to attack between now and November.

The measure is so unpopular that Republican State Senator Scott Brown has built his entire surge against Coakley around his promise to be the 41st senator to block the bill -- this in Ted Kennedy's Massachusetts. He must be pretty confident that the bill has become politically radioactive, and he's right.

It has already brought down Senator Byron Dorgan of North Dakota, a fighter for health care and other reforms far more progressive than President Obama's. Dorgan championed Americans' right to re-import cheaper prescription drugs from Canada, a popular provision that the White House blocked. Dorgan, who is one of the Senate's great populists, began the year more than twenty points ahead in the polls of his most likely challenger, North Dakota Governor John Hoeven. By the time he decided to call it a day, Dorgan was running more than twenty points behind. The difference was the health bill, which North Dakotans oppose by nearly two to one. The fact that Dorgan's own views were much better than the Administration's cut little ice. He was fatally associated with an unpopular bill.

So, how did Democrats get saddled with this bill? Begin with Rahm Emanuel. The White House chief of staff, who was once Bill Clinton's political director, drew three lessons from the defeat of Clinton-care. All three were wrong. First, get it done early (Clinton's task force had dithered.) Second, leave the details to Congress (Clinton had presented Congress with a fully-baked cake.) Third, don't get on the wrong side of the insurance and drug industries (The insurers' fictitious couple, Harry and Louise, had cleaned Clinton's clock.)

But as I wrote in Obama's Challenge, in August 2008, it would be a huge mistake to try to get health care done right out of the box. Obama first needed to get his sea-legs, and focus like a laser on economic recovery. If he got the economy back on track, he would then have earned the chops to undertake more difficult structural reforms like health care.

Deferring to the House and Senate was fine up to a point, but this was an issue where the president needed to lead as only presidents can -- in order to frame the debate and define the stakes.

Cutting a deal with the insurers and drug companies, who are not exactly candidates to win popularity contests, associated Obama with profoundly resented interest groups. This was exactly the wrong framing. This battle should have been the president and the people versus the interests. Instead more and more voters concluded that it was the president and the interests versus the people.

As policy, the interest-group strategy made it impossible to put on the table more fundamental and popular reforms, such as using Federal bargaining power to negotiate cheaper drug prices, or having a true public option like Medicare-for-all. Instead, a bill that served the drug and insurance industries was almost guaranteed to have unpopular core elements.

The politics got horribly muddled. By embracing a deal that required the government to come up with a trillion dollars of subsidy for the insurance industry, Obama was forced to pursue policies that were justifiably unpopular -- such as taxing premiums of people with decent insurance; or compelling people to buy policies that they often couldn't afford, or diverting money from Medicare. He managed to scare silly the single most satisfied clientele of our one island of efficient single-payer health insurance -- senior citizens -- and to alienate one of his most loyal constituencies, trade unionists.

The bill helped about two-thirds of America's uninsured, but did almost nothing for the 85 percent of Americans with insurance that is becoming more costly and unreliable by the day -- except frighten them into believing that what little they have is at increased risk of being taken away.

All of this made things easier for the right, and left people to take seriously even preposterous allegations such as the nonsense about death panels. It got so ass-backwards that the other day Ben Nelson, who successfully held out for anti-abortion language and a sweetheart deal for Nebraska's Medicaid as the price of his vote, found himself facing a wholesale voter backlash.

Nelson began running TV spots assuring Nebraska voters that the Obama health plan is "not run by the government." That's one hell of a slogan for a party that relies on democratically elected government to offset the insecurity, inequality and insanity generated by private commercial forces. If not-run-by-government is the Democrats' credo, why bother?

So we went from a politics in which government is necessary to provide secure health insurance -- because the private insurance industry skims off outrageous middlemen fees and discriminates against sick people -- to a politics in which Democrats, as a matter of survival, feel they have to apologize for government. Thank you, Rahm Emanuel.

The budget-obsessives around Obama also insisted that most of the bill not take effect until 2013, so that all of the scary stuff gets three years to fester before most people see any benefit. Call it political malpractice.

Finally, the health insurance battle sucked out all the oxygen. When Obama made time to work the phones personally, it wasn't to enact serious financial reform (this was left to the tender mercies of Tim Geithner) or to fight for a real jobs program (deficit hawks Peter Orszag and Larry Summers got to blunt that one). No -- Obama got on the phone and met with legislators to round up the last vote or two for a sketchy health reform that crowded out far more urgent issues.

As a resident of Massachusetts, in the last two days I've gotten robo calls from Barack Obama, Joe Biden, Bill Clinton, Martha Coakley, and Angela Menino, the wife of Boston's mayor -- everyone but the sainted Ted Kennedy. In Obama's call, he advised me that he needed Martha Coakley in the Senate, "because I'm fighting to curb the abuses of a health insurance industry that routinely denies care." Let's see, would that be the same insurance industry that Rahm was cutting inside deals with all spring and summer? The same insurance industry that spent tens of millions on TV spots backing Obama's bill as sensible reform?

If voters are wondering which side this guy is on, he has given them good reason.

Looking forward, one can imagine several possibilities. Suppose Coakley loses. Obama and the House leadership may then decide that their one shot to salvage health reform after all this effort is for the House to just pass the Senate-approved bill and send it to the president's desk. They can fix its deficiencies later. This is an easy parliamentary move. But the bill passed the House by only five votes; many House members are dead set against some of the more objectionable provisions of the Senate bill; a Coakley loss would make the bill that much more politically toxic; there will be Republican catcalls that Congress is using dubious means to pass a bill that has just been politically repudiated; and the House votes just may not be there this time.

Alternatively, let's say Coakley narrowly wins, the Democrats have a near death experience, and the House and Senate stop squabbling and pass the damned bill.

Either way, the Massachusetts surprise should be a wake-up call of the most fundamental kind. Obama needs to stop playing inside games with bankers and insurance lobbyists, and start being a fighter for regular Americans. Otherwise, he can kiss it all goodbye.

© 2010 Huffington Post

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe. He is the author of Obama's Challenge and other books.

Will the Consumer Financial Protection Agency Go Down to Defeat?

Will The Banks Win Again? Bailout Watchdog Rallies Support For Consumer Protection Agency

From Huffington Post

First Posted: 01-19-10 12:54 AM   |   Updated: 01-19-10 03:54 AM

Elizabeth Warren

The battle in the Senate over a proposed consumer financial protection agency is the final show-down between banks and American families, bailout watchdog Elizabeth Warren wrote to supporters Monday night.

The outcome "will show whether we are going to let the industry continue to write the rules -- to keep the cops off the beat -- or whether the financial crisis actually changed something."

Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is said to be considering dropping the proposed independent agency from the Senate's financial reform bill.

But Warren isn't giving up. "We have all worked hard to make the CFPA into a reality, and the next few weeks will determine whether our hard work will make a difference for families or whether families will lose once again," the Harvard Law professor and advocate for the middle class wrote. "The next few weeks will determine whether families will have to play by rules written by the banks and for the banks -- rules that let the industry get away with anything. In my view, we cannot let families lose again."

The new agency would be equipped with the power to write rules governing basic consumer credit products like home mortgages and credit cards, and would have the authority to regulate big banks and monitor their compliance.

Federal bank regulators, who focus on the safety and soundness of the country's banking system, are mostly concerned with bank profitability, consumer advocates and law professors say. Consumer protection has not been a priority.

But there's been a growing recognition that the lack of adequate protection for consumers helped cause the financial meltdown of 2008.

President Obama and his advisers have repeatedly called for such an agency, arguing that it's the best way to protect consumers from the big banks. The House passed a financial reform bill modeled on his proposal in December.

Republicans have vowed to defeat any bill creating such an agency, arguing that its proposed powers are best left to the bank regulators. Federal banking regulators also oppose it, arguing that it's hard to separate bank regulation from consumer protection.

Blocking the CFPA has been atop the banking industry's legislative agenda since last summer. The industry has spent millions lobbying and campaigning against such an agency, which they argue would lead to increased costs and less credit for consumers.

The power of the bank lobby on Capitol Hill cannot be understated. As Sen. Dick Durbin (D-Ill.) put it in April, as a bankruptcy bill he championed went down in flames, "they frankly own the place."

According to multiple news reports, Dodd is proposing to ditch the CFPA as an independent agency. The goal, he says, is to secure Republican support for the overall legislation. Rather, he would ask Republicans to support a consumer-protection division within another federal agency, such as the Treasury Department or a regulatory agency.

But it's not lost on reformers that federal regulators and those they regulate appear to be in lock-step with one another. Just last week, the head of the country's second-biggest bank, Jaime Dimon of JPMorgan Chase, praised federal banking regulators.

"I have been completely clear throughout that regulators should not be blamed," Dimon said of the bank regulators and their perceived role in the near-meltdown of the nation's financial system. The regulators, after all, allowed banks like Dimon's to do whatever they wanted, critics allege, like giving mortgages to unqualified borrowers and then securitizing them for sale to unsuspecting investors, spreading risk throughout the system.

The lack of effective regulation was one of the main drivers behind the collapse. Now the question is will the new regulations be any better.

Warren writes in her letter: "The fate of the Consumer Financial Protection Agency will be the best way to follow the story moving forward because consumer products were the most abusive and because the CFPA has real muscle to stop those abuses," she wrote. "The CFPA would hire new cops and change the way big banks do business.

READ the entire letter:

Friends,

The story of the financial crisis has a thousand twists and turns, but the basic narrative is easy to follow. The financial industry wrote rules that allowed it to act recklessly. The industry captured agencies that were supposed to regulate it, taking cops off the beat and funneling enormous resources into the political process to make sure there wouldn't be any new cops.

Then, with no laws to hold them back, the banks made hundreds of billions of dollars on the sales of deceptive products.

That went on for years, and the industry's tricks-and-traps pricing got more and more out of control. Eventually, the sale and re-sale of deceptive mortgages and other dangerous products made trillions of dollars for Wall Street while bringing down the American economy. When the industry's recklessness brought the biggest banks to the brink of collapse, Wall Street turned to the taxpayers for bailouts and guarantees, which put it right back into big profits and big bonuses. The industry got whatever it wanted.

Now we are coming to the final chapter of this story.

The final chapter will show whether we are going to let the industry continue to write the rules -- to keep the cops off the beat -- or whether the financial crisis actually changed something.

The fate of the Consumer Financial Protection Agency will be the best way to follow the story moving forward because consumer products were the most abusive and because the CFPA has real muscle to stop those abuses. The CFPA would hire new cops and change the way big banks do business.

We have all worked hard to make the CFPA into a reality, and the next few weeks will determine whether our hard work will make a difference for families or whether families will lose once again. The next few weeks will determine whether families will have to play by rules written by the banks and for the banks -- rules that let the industry get away with anything. In my view, we cannot let families lose again.

Like you, I read last week that the consumer agency is dead. I also read the same thing last spring, last summer, last fall, and last month. And I've been warned about the power of the banks since I first developed this idea in 2007. We always knew this was a David v. Goliath fight, but I don't believe that Washington can or will let Wall Street act like nothing has changed.

I am writing to ask you to make an extra effort these next few weeks to organize calls and emails into the Senate Banking Committee about CFPA, to organize op-ed and letter to the editor campaigns across the country, and to create visible, public support for CFPA. If everyone on this list called key Senators on the Senate Banking Committee, that would send a loud message -- and if your members will do the same, the message will get louder.

This is not the last important moment in the fight for the CFPA, but it is a critical one. You can count on me to do my part. Please help.

Elizabeth

Solar Power Is Now an Option for Even the Most Cash-Strapped Suburbanites

By Yasha Levine, AlterNet. Posted January 16, 2010.

Residential solar leases offer a no-money-down, low-monthly plan that makes solar electricity cheaper than the stuff we get by wire -- and you don't have to buy the panels.  

Say hello to the thing that could save our sun-splashed suburban lifestyle: affordable residential solar power that puts roof-top solar panels within reach of the most cash-strapped America consumer. This breakthrough is not a result of technological innovation, but a new financing scheme cooked up on Wall Street called a "residential solar lease," a no-money-down, low-monthly plan that has made solar electricity cheaper than the stuff we get by wire. It's an old approach to a new source of energy, and it is taking California by storm.

"Go solar for $0 down. Now you can afford to go solar without the high initial cost of installing a system. Instead of buying the equipment, you simply lease it,"  boasts the Web site of SolarCity, a well-financed Silicon Valley start-up that has been pioneering the residential solar lease.

A solar lease is a fairly simple arrangement that is not unlike a car lease. Instead of dishing out tens of thousands of dollars upfront to buy and install a rooftop solar array, homeowners simply borrow one for a low monthly fee. Like a car lease, customers sign a contract that locks them in for a specified period of time with the option of extending their lease or buying the panels at the end of the contract. It makes sense when you consider that a typical homeowner would have to cough up between $20,000 and $50,000 to buy and install a solar panel system. A solar lease, on the other hand, would only cost them somewhere around $100 a month.

California, the world's third-largest solar-power market, saw twice as many people file for solar power permits in 2009 than in 2008, with much of the surge in demand being driven by this newfangled solar product. (Demand is so high that a black market for stolen solar panels has sprung up in the Golden State.)

SolarCity, one of the first companies to aggressively market solar leases, signs people up for 15-year contracts that run an average of $110 a month (with a 3.5-percent increase every year). SolarCity says customers can typically expect to shave 15 percent off their electricity bill from day one, with savings potentially growing over time if energy costs continue to rise. Competing companies -- like SunRun out of San Francisco or American Solar Electric out of Scottsdale -- offer the same basic deals.

A $100 electricity bill is a steal for California, a state that takes fifth place for highest electricity rates in the country, especially for the millions of people who inhabit the southern, sun-baked reaches of the state.

“My bill goes over $200 during summer when we keep the central AC going twelve hours day,” explained Paul Bosacki, who sits on the city council of Hesperia, a rustic, sprawling exurb on the edge of the Mojave Desert 90 miles east of Los Angeles. Bosacki was the first -- and so far the only -- person to sign up for SolarCity’s lease program in his town, but he won’t be alone for long. Because now he pays $89 a month and gets all the juice his household needs, while saving $21 dollars off his average electricity bill. 

We walk around to Bosacki's backyard, where a single Joshua tree keeps watch over a jacuzzi and a panoramic view of the Mojave Desert, and he gives me a tour of his solar system: a slim grid of black panels on the roof and a box that converts its electricity to proper voltage. Bosacki might have to spend a couple of bucks a month on additional electricity from his local utility in the summer, but in the few months he’s had the system, he’s been well in the clear. “I turned it on in September and haven’t gotten a bill since," he says, adding that he would never be able to afford the $40,000 his solar setup retails for without the solar lease. 

Not only do homeowners like Bosacki save money with solar, but they stand to make some, too. The beautiful thing about the technology is that it allows you to feed all your surplus electricity -- like when you're on vacation, at work or taking a nap -- into the grid. The only downside is that, until 2010, local utilities in California paid customers in electricity credits rather than in real money. But a new law will now force them to pay in real money, as in cold hard checks they'll soon start getting in their mailboxes. Called Consumer Net Metering, this new regulation finally does an end-run around an insane California law that only allowed utility companies to sell electricity; a restriction that had been putting a serious damper on small and alternative solar projects. Now even the small-time homeowner could actually make an honest buck on the energy market. Welcome to the cheap new world of debt-financed green energy. 

more...

You Want Renewable Energy: Make Energy Companies Buy Energy From Homeowners

by John Lawrence

You want to reduce dependence on foreign oil, reduce carbon dioxide emissions into the atmosphere and stimulate the economy all at the same time? Then one change in the law could do all that and more. Simply require energy companies to buy back energy generated by homeowners who put solar panels on their roofs. Right now in many states like California energy companies will credit your account for excess solar energy generation that they allow you to sell back into the grid making in effect your meter run backwards. But that's not enough. Solar energy generation would skyrocket if the energy companies were required to take all the energy you could generate off your rooftop and pay you cash for it, not simply give you a credit. And the credit usually gets zeroed out at some point so its not cumulative. After that all the energy you put back into the grid simply goes to the energy company's profit margin.

Why not encourage the distribution of energy creation? If each homeowner could not only fill his or her own energy needs but also sell energy into the grid, there would be widespread benefits that would drive up property values and make it more desirable to own rather than rent although apartment owners and condo complex homeowners' assocations should be able to benefit also. And all that can be said for solar can also be said for wind power generation although suburban home owners' associations might frown on windmills in back yards. Not solar though. It would jump start the renewable energy revolution. People would buy more plug-in hybrids powering their transportation needs with self generated energy as well as their homes. This is exactly what Germany did which jump started their solar energy revolution and made them less dependent on foreign oil.

The Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG), enacted by the government of Germany, promotes the development of renewable energy sources with a feed-in tariff scheme. In conjunction with Germany’s climate preservation efforts, the ultimate objective of this legislation is to increase the amount of renewable energies in the German power supply to 12.5% by the year 2010. On the 1 January 2009 the latest version of the EEG came into force. The fundamental idea of the EEG is that grid operators must pay a government-specified feed-in tariff to energy generators supplying energy to the grid from renewable sources. This feed-in tariff is intended to make energy from renewable sources cost-competitive with that from traditional sources, and it varies with the amount of energy generated by the producer and the type of renewable energy source. As an incentive to encourage technological advancements and cost decreases for parts and installation, the feed-in tariff drops yearly by a fixed percentage (degression rate). Under the German electricity grid system, the grid operator is legally obliged to provide free access to the grid for all interested generators, and to pay the specified reimbursement for those suppliers qualifying under the terms of the EEG. No contract with the plant operator is necessary. The Energy Feed-In Unit (Energieversorgungsunternehmen, or EVU) is responsible for calculating feed-in tariffs in an equitable way based upon current market prices of energy. Grid generators then pass the feed-in tariff costs down to end-consumers as an incorporated part of the final price seen on their energy bills.

In Germany after the EEG was passed, whole solar energy farms sprung up. All it would take is a swift stroke of the pen at the US Federal level. After all why should energy companies care where they buy their energy? Why should some big coal fired energy generating plant be a more desirable source than the millions of roof tops of home and business owners? In order to make a profit, energy companies could buy wholesale and sell retail or the feed-in tariff idea could be utilized. Low energy consumers could still make money selling into the grid. This could offset the lack of jobs by making many homeowners proprietors of their own business - the business of owning mini energy generating plants.

There are already many financial incentives for offsetting the high initial costs of solar panel installation. And our "creative" Wall Street types, I'm sure, could devise more. This coupled with the prospect of actually making money off one's rooftop would solarize the nation in a hurry. The solar industry would add jobs making, installing and maintaining solar systems. The air quality would improve as more cars were powered by self generated solar power. The dangers of global warming would ameliorate. Home ownership would be subsidized. It seems like a win-win-win-win situation so why isn't the government doing this? It would cost them nothing. It would not add to the Federal debt. Indeed by improving citizens' financial outlooks, it would generate additional tax revenues.

Simply require energy companies to allow home and business owners to sell excess energy back into the grid for cash. It would reduce the capital requirements for energy companies to build more energy generation plants. It would reduce dependence on fossil fuels and the importation of oil from abroad. The value of desert real estate would increase. It would allow oil poor countries like the US to reduce their trade imbalance. Individual citizens would benefit and be empowered in more ways than one. The nation would benefit.

I have a feeling that something like this could be coming in 2010 as the Obama administration seeks to jump start the alternative energy industry and shore up its initiatives for a clean environment while subsidizing essentially the real estate industry. Homeowners could create real value in their homes by turning their homes into energy generation businesses. The technology is already here to make the electric meters spin backwards. It's a total no brainer. All gain and no pain except perhaps for the oil and gas companies. Oil consumption both for cars and for home heating oil would be reduced. The nation would gradually convert to having its energy needs provided by ubiquitous clean energy instead of by a dependence on foreign oil. And you would see a jump start in the economy that would rival the internet boom. The financial incentives for solar installations either by leasing arrangements or low cost loans have already been worked out. Maybe banks can redeem themselves and actually do some good here.

So come on Obama. What are you waiting for? But we all can expect that the party of "No," the Republicans, will vote against any legislation that would implement such a sane and prudent policy because their constituents, the oil and coal companies, would be deadset against it and would lobby the hell out of it. They would want to centralize and control any solar production themselves - not have it distributed among the population. So like many other great ideas, this one will probably go nowhere as we continue to depend on foreign oil, despoil the environment and languish in the new economy of increased joblessness and reduced incomes for the middle class.

Europeans Can Live With Slow Growth; Americans Can't

John,

Kenneth Rogoff, since 1985 researcher with the National Bureau of
Economic Research and before that Chief Economist with the IMF, was
recently interviewed here by a Dutch newspaper. He and Carmen
Reinhardt have researched 8 centuries of financial crises in over 66
countries. Their research results are told in a new much praised book
you may be familiar with, "This Time is Different : Eight Centuries of
Financial Folly", 2009.

In his interview, he remarked that we've had a lot of luck that the
current economic crisis situation hasn't become a second Great
Depression, but things are still pretty terrible. He sees a very slow
recovery as the system of credit restriction needs time to recover;
bank lending is insufficient as deleveraging runs its course and
extent of bad loans remains unknown. And then there are the deep
problems of environment, joblessness and health care. All this is
going to slow down GDP growth for some time. In his words, "Our Debts
will continue to accelerate and the economy will more slowly recover.
This is a very tough combination."

When asked, what about Europe?  He replied, "Europe has an enormous
advantage over the U.S. the coming decades. You Europeans realize that
you are well-off and that you have a good life. And, if the economy
only grows 1% .... you can say that's not great, but ok.This won't
automatically lead to great political unrest. Very mature.  In
America, the politics can't live with such a result. Everyone will
want more and more. If a President stands up and says, 'We are going
to have an economic growth of 1% and that´s acceptable,' he would be
screamed at. Not optimistic enough. Not ambitious enough."

He finds, as do so many other respected economists, that the American
financial lobby is too mighty, a power to be reckoned with, perhaps
the most influential lobby group in Washington. These Wall Street
lobbyists represent substantial taxpayers leading to pressures on
politicians causing latter to fear strengthening the rules and
oversight enforcers. At the same time, however, he thinks we should go
slowly and reflect carefully on the rules in order to get them right
and not to endanger the already weak recovery of the economy. I don´t
completely agree with him on that last point. I feel the weaker the
tempo and sharpness of the reforms the more the influence of the
financial lobbysits is reinforced over time as public interest wanes
and reverts back to a passive hopelessness or advocacy for change.

In any case, Rogoff´s new book and the one by Steven Hill are my next
personal reading assignments!
Best,
Frank

Private Charity VS Government Aid

by John Lawrence

Conservatives, who favor low taxes and minimal government programs to help the poor and needy, instead tout private charity as the means of doing good, subsidizing the arts and helping the poor. How is this working out? Is private charity more effective, for example, in disaster relief or in food and housing assistance? How about medical care for the poor? Is private charity more effective there?

It's almost inconceivable that private charity could provide unemployment insurance to everyone with a need in the comprehensive and all inclusive way that a government program can. First, private charity by its very nature cannot be all inclusive. It is hit or miss. It can not guarantee help for all those who qualify. It cannot set up standards for qualification or administration in a way that guarantees fairness simply because no private charity in and of itself can provide standards for the whole society or guarantee assistance to everyone in the society. Government can pass laws; government can provide mandates. Government can access revenues to pay for programs; private charity is dependent on the whims, primarily, of the rich. During a recession, when help is most needed, the rich are least likely to give to charity since their stock market portfolios are down. The rich give based on their return on investments, and, when that tanks, the giving stops.

The Bill and Melinda Gates Foundation is the largest private charity in the world wirh an endowment of $35 billion. In any given year an endowed foundation will give away monies earned from their endowment. Obviously, they don't give away the whole endowment or their charitable activities would be finished. They give away the return to capital of the endowment. This basically is from interest, stock appreciation, rents and various other forms of money made from money. While some percentage of $35 billion sounds like a lot of money it's nothing compared to what the US government spends on its defense budget which is between $880 billion and $1.03 trillion in fiscal year 2010. So say the Gates Foundation gives away 10% of its endowment on a yearly basis. That would be $3.5 billion, a mere drop in the bucket compared to the US defense budget.

The total US Federal budget for 2010 is $3.55 trillion. Of this $695 billion is to be spent on social security, $453 billion on Medicare and $290 billion on Medicaid. Does anyone in his right mind think that these sums could be provided by private charity? No, the scope of needs for the elderly, the poor, the unemployed, the unfortunate is just on too large a scale that they can only be met in a comprehensive and fair way by government. As much good work as the Gates Foundation and other foundations and private charities do, they collectively are no substitute for government programs. And think of how much good the government could do if a few hundred billion dollars of the military budget were taken away and used to alleviate poverty in the world?

Paul Newman has another philanthropic model. He sells products and contributes the after tax profits to charity. He started with Newman's Own salad dressing and his product line has taken off from there. Paul Newman and Newman’s Own Foundation have donated more than $280 million to thousands of charities around the world. Launched in 1982, Newman's Own Foundation has been giving away money for 28 years. That's a laudable achievement, but the entire amount of money given away by the Newman Foundation over 28 years is less than .05% of the US military budget for one year - 2010. think what could be done if the US government diverted even a fraction of a per cent from its military budget to charitable activities around the world.

The conclusion is that, while private charity and philanthropic activities are laudable and do much good, they are only a small drop in the bucket and could never replace what governments are capable of in terms of spending power. And only governments have the power to administer programs in a universal, comprehensive and equitable way. The only problem is that so much of the US Federal budget is spent on defense and offense. Actually, more is spent on offense than defense. Citizens should demand that 1) a fraction of the military budget should be diverted to an alleviation of poverty in the world that would reap far more peace dividends for the US populace than continued offensive wars possibly can and 2) more of the military budget should be spent on actual defense such as protecting borders, ports and vital facilities like electrical and chemical installations than is spent on offensive wars as is now the case.

Why Do So Many People Live in Poverty Today?

by John Lawrence

A growing number of US citizens are leaving the middle class and joining the ranks of the poverty stricken. This is happening one job loss, one foreclosure, one bankruptcy, one divorce at a time. But worldwide, more than a billion people already live in poverty. In Haiti, for example, over 50% of the population live on less than a dollar a day and that was before the recent tragedy.

Haiti’s population of 9.6 million has a per capita income of about $560, with 54 percent of Haitians living on less than $1 a day and 78 percent on less than $2 daily, according to the World Bank. The gross domestic product was $7 billion in 2008. The country is still recovering from four tropical storms or hurricanes that killed at least 800 people in 2008.

Why in a time of unprecedented wealth and technological development including smart phones, HDTV, 3 dimensional movies, the internet, satellite radio and ipods do more than half of a poor country's population have to live on less than a dollar a day? And Haiti is just a microcosm of the misery that exists around the world. If it hadn't been for the recent earthquake causing even more unimaginable misery and an outpouring of compassion and aid, the plight of Haiti's poor would have been out of sight, out of mind. Where was all the concern about Haiti's grinding poverty before the earthquake?

In "Planet of Slums" Mike Davis makes the case that this endemic worldwide poverty is directly caused by World Bank and IMF policies that have led to a transfer of wealth from poor to rich - much as is happening at an accelerated level in the US today where we have seen rich bankers giving themselves million dollar bonuses while denying foreclosure relief to thousands. Since the US ideologically has dominated the rest of the world in recent decades, its policies of privatization, diminution of social programs and encouragement of large scale corporatization have, as is now becoming apparent, only served the wealthy while further aggravating the plight of the poor.

According to the united nations, more than one billion people now live in the slums of the cities of the South. In this brilliant and ambitious book, Mike Davis explores the future of a radically unequal and explosively unstable urban world. From the sprawling barricadas of Lima to the garbage hills of Manila, urbanization has been disconnected from industrialization, even economic growth. Davis portrays a vast humanity warehoused in shantytowns and exiled from the formal world economy. He argues that the rise of this informal urban proletariat is a wholly original development unforeseen by either classical Marxism or neo-liberal theory. Are the great slums, as a terrified Victorian middle class once imagined, volcanoes waiting to erupt? Davis provides the first global overview of the diverse religious, ethnic, and political movements competing for the souls of the new urban poor. He surveys Hindu fundamentalism in Bombay, the Islamist resistance in Casablanca and Cairo, street gangs in Cape Town and San Salvador, Pentecostalism in Kinshasa and Rio de Janeiro, and revolutionary populism in Caracas and La Paz. Planet of Slums ends with a provocative meditation on the “war on terrorism” as an incipient world war between the American empire and the slum poor. “In this trenchantly argued book, Mike Davis quantifies the nightmarish mass production of slums that marks the contemporary city. With cool indignation, Davis argues that the exponential growth of slums is no accident but the result of a perfect storm of corrupt leadership, institutional failure, and IMF-imposed Structural Adjustment Programs leading to a massive transfer of wealth from poor to rich. Scourge of neo-liberal nostrums, Davis debunks the irresponsible myth of self-help salvation, showing exactly who gets the boot from ‘bootstrap capitalism.’ Like the work of Jacob Riis, Ida Tarbell, and Lincoln Steffans over a century ago, this searing indictment makes the shame of our cities urgently clear.” — Michael Sorkin

One would think that "progress" would alleviate the plight of the poor, not contribute to it, but in fact just the opposite seems to be the case. This "progress" does not trickle down to the poor. The mindset that encourages the development of technology and the promotion of the best and the brightest in terms of entrepreneurship only serves to increase private wealth which exists amid a sea of poverty. The reasons for this are not hard to fathom. The notion that private wealth is not to be shared leaves the poor to stew in their own fetid juices. A rising tide does not raise all boats, just the yachts of the wealthy. So a society which encourages a meritocracy at the expense of an ethic of sharing will always lead to the rise of immense wealth floating in a sea of poverty. Now that Haiti has endured a natural catastrophe which only exacerbates its status quo as a national basket case, there is an outpouring of compassion. But where is the compassion in general for the plight of the world's poor? It's not rocket science to provide clean water, decent sewage systems and basic food and shelter. And it is best provided by public means not privatization.

The technology for these basics was well known hundreds if not thousands of years ago. All the "progress" of recent years has utterly failed to provide for even a rudimentary standard of living for the world's population. And that's a direct result of what might be called sins of omission as well as sins of commission for lack of better terms. In short the developed world has left the world's poor to their own devices, but more than that, the policies of the world's richest nations, primarily the US, have promoted a transfer of wealth from poor to rich instead of the other way around by favoring elites and large corporations.

And the continued plight of the world's poor has been a major cause of terrorism. Instead of fighting terrorism by spending money alleviating poverty in the world, the US spends upwards of $600 billion a year on its military and attempts to control the world's poor by oppressing them instead of by alleviating the basic cause of terrorism: poverty. The US spends a pittance on poverty alleviation while spending enormous sums on oppressing the poverty stricken in the mistaken notion that only bad people would do anything but acquiesce in their miserable circumstances. The root cause of  terrorism is poverty and other perceived injustices like building military bases on foreign soil whose prescence only serves to intimidate and undermine sovereignty. The US seeks to beat down the poverty stricken who step out of line rather than to elevate them to a basic standard of human decency. And it has sought in the past to overthrow or undermine any regime, democratically elected or not, that attempts to come to the aid of the poor rather than represent the interests of the rich.

Meanwhile, as the US kills three children a day in Afghanistan, another poor nation, it is only continuing its reputation as the world's bully, only in a less strident manner under Obama than under Bush. While the US augments its reputation as the world's bad guy, China is being the good guy by spending its money on development deals in poor countries while simultaneously cementing deals for purchasing their natural resources. One might ponder the question: why isn't China afraid of the terrorists? Or why is China standing for peaceful development and mutual assistance while the US goes all out to rid the world of a few terrorists? Why aren't the terrorists attacking China? Could it be that China has given them no reason to attack them while the US and US policy towards the Third World has? Or is Uncle Sam just Uncle Sucker making the world safe for Chinese investment?

The recent Great Recession has only shown the world how bankrupt US policy and laissez-faire free market capitalism really are. Only the bankers are saying 'let's just forget all this happened and continue with business as usual'. Let's reinstate the status quo ante and go on as before - huge bonuses and all. Well, it's apparent to any casual observer that something has changed and that something is that the rest of the world is not going to continue to believe that the US has all the answers and even knows what the hell it's doing any more. The free market principals it has tried to impose on the rest of the world have been shown to be a bunch of BS. The rest of the world went along with them only because they promised development, and there has been development in India and China among other places which has resulted from outsourcing the jobs of American workers and accepting floods of cheap imports further undermining American manufacturing. Still none of this development has raised the bottom billion of the world's population out of poverty and they are the fertile source of terrorism. At the same time US policy favoring transnational corporations has sold out the American middle class while fostering some world development and totally neglecting the world's poorest citizens.

So the US needs to change its model, its Weltanschauung, from one of free market, laissez-faire capitalism, privatization and elimination of social programs that help the poor to a less arrogant one of maybe the US doesn't have all the answers. Instead of a huge outpouring of compassion when there is a natural catastrophe, maybe a slow trickle of compassion that would change US government policies from overspending on militarism to spending to help the poor and provide a decent level of public services, sharing private wealth to create public wealth in terms of basic infrastructure to include clean water, decent sewage systems, public education and health care - all the things which privatization and private wealth have failed to provide.

Clothing Destroyed Rather Than Being Donated to Poor to Save "Brand Identity"

H&M's 'Brand Integrity': Destroying Surplus Winter Clothes in New York Instead of Donating Them to the Needy

Posted by Liliana Segura, AlterNet at 11:39 AM on January 15, 2010.

Perfectly good shirts, sweaters and pants and winter jackets are ripped up and trashed instead of going to the city's huge poor population.    

In a story that should have us all railing against the cancer of capitalism, it recently came to the attention of many, thanks to the New York Times, that ubiquitous fashion retailer H&M has apparently been destroying perfectly usable unsold clothing, in the middle of winter, in a city where one third the population is poor.

"Gloves with the fingers cut off," "warm socks," "cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor," and "men’s jackets, slashed across the body and the arms" are among the items recently described by one New York resident to Times reporter Jim Dwyer as being among the countless pieces of merhandise purposely ruined and rendered unwearable, piled in trash bags behind the Herald Square location in Manhattan.

The article met with much outrage -- "H&M" topped the Trending Topics list on Twitter -- and shortly thereafter, H&M announced that that it would stop the practice and would "instead donate the garments to charities."

"It will not happen again,” said Nicole Christie, a spokeswoman for H&M in New York. “We are committed 100 percent to make sure this practice is not happening anywhere else, as it is not our standard practice.”

Indeed, Christie said that it has always been standard practice to donate leftover clothing. Perhaps. But in fact, H&M is not alone in destroying unbought, unworn merchandise. In addition to mega-retailers like Wal-Mart (whose greedy corporate practices should come as no surprise to most consumers), numerous blogs tell stories of employees forced to trash expensive clothing -- even furniture -- at high-end stores once they've been marked as low as retailers are willing to go.

One such store is Anthropologie, purveyor of pretty, highly decorative, and almost aggressively feminine goods. Back in 2008, a couple of decor and fashion blogs picked up on Anthropologie and other retailers' policy of destroying leftover inventory.

A former seasonal employee wrote:

I was on stock and we were clearing out a bunch of sale items that hadn't sold. I asked the manager what I should do with the clothing and she said "destroy it." Destroy it? I asked. Shouldn't we donate it? 'No,' the manager replied, 'we are only allowed to donate certain items. Corporate policy is to destroy everything else.'

I didn't have a choice so I did it. Perfectly good shirts, sweaters and pants got ripped, torn and generally wrecked. It was really depressing! Another associate told me they destroy furniture too -- almost everything that doesn't sell. We couldn't figure out why. Later on another manager told me that Anthro does it to maintain their brand integrity. They don't want their brands at discount stores or anywhere that would cheapen the brand. Nothing is too common and they want to keep it that way.

As someone with an admitted weakness for Anthropologie's beautiful things (who has never to this day purchased anything there that was not on sale), this is pretty appalling. But it was not an isolated incident.

On a different blog a reader wrote the following about a former Anthropologie manager:

After the store had had furniture and accessories for a long time, and after they had been slightly marked down on sale and not sold, he had to take the merchandise and mark it down to "ten cents" (I'm assuming for bookkeeping purposes). After that, he had to take it in the back room and DESTROY it. He says: "I've literally taken a hammer to plates, thousand-dollar chandeliers and more." Even the vintage stuff. If he had taken it home without destroying it, he would have been fired. If he had given it to a co-worker, he would have been fired. Do you want to know why they have this outrageous policy? Two words (their words): "Brand Integrity." They couldn't mark it down so low that people could "expect to walk in to Anthropologie and find a deal."

Granted, this is anecdotal evidence, but there's enough of it that it seems unlikely to be made up.

From a marketing and business standpoint, "brand integrity" makes sense: It's about preserving the legitimacy of a brand in consumers' eyes, so that people continue to buy, say, that $278 hat (whether they should or not).

But by what sort of sick measure does preserving "brand integrity" mean that a warm winter jacket is worth more cut up and in the trash than when it is worn by someone who could never afford to buy it? Do designers so jealously guard their products that they can't bear the thought of a homeless person wearing them for warmth? Screw "brand integrity"; what what about human integrity? If a retailer cannot allow their clothing to end up at Goodwill, lest their image be tarnished, do we really want to shop there?

***

Adding to the whole destroying-perfectly-good-clothing controversy, this week Dwyer published a new article titled: "Closing Pipeline to Needy, City Shreds Clothes," revealing that the practice of destroying clothes rather than donating them goes beyond retailers.

"New York City officials destroyed tons of new, unworn clothing and footwear last year that had been seized in raids on counterfeit label operations, abandoning a practice of giving knockoff garments to groups that help the needy," he wrote. 

Last summer, the Police Department rented an industrial shredder to destroy a dozen tractor-trailer loads of bootleg goods after they were no longer needed as evidence in legal proceedings. It also has been shipping truckloads of garments to an incinerator in Hempstead, on Long Island, where the city pays about $150 a ton to burn them. The lost clothing includes winter jackets, shirts, pants and underwear.

You read that right: The city is literally paying to burn perfectly good clothing rather than donating it to needy New Yorkers.

Incredibly, the New York Police Department claimed that there had been no requests for donations last year, an assertion that was "bewildering to operators of (a) clothing bank, who run a warehouse that supplies clothing to needy New Yorkers. They said they had made many requests."

According to Dwyer, part of the issue is the Bloomberg Administration's new efforts to crack down on counterfeit labels.

"Many major fashion brands have their headquarters in New York City, and Mr. Bloomberg has made prosecution of trademark infringement a priority for his administration. The companies also take actions in civil court against the pirates, an expensive process, to protect the designers’ names."

“These are people who spend hundreds of thousands of dollars, some of them millions, to get counterfeit goods off the street,” said Robert Tucker, a lawyer with the firm of Tucker and Lafiti, whose fashion clients include Chrome Hearts, Steve Madden, Zac Posen and Ed Hardy. “Everyone wants to feed and clothe the homeless. But how are you going to spend all this money and then put it back on the street?”

Hmm ... clearly what Mr. Hardy meant to say is that everybody wants to clothe the homeless -- just not as much as they want to preserve the exclusivity of their brand.

Or, to put it another way, all those millions of dollars would be totally wasted if counterfeit clothing were worn by human beings instead of being thrown away. After all, as one expert told Dwyer, retailers "want us to see that the people wearing their brands are the people we aspire to be.”

"They want to know, 'Who’s wearing the clothing and how can that hurt my brand?'

Fat Cats on Wall Street - Sticking It To Everyone!

This year, the fat cats on Wall Street whose venal greed, self-interest and failures in judgment have led to so much suffering will earn a record $145.85 billion - an increase of 18 percent - over last year. Somehow, they still have the chutzpah to cry in their gluttonous soup over a modest fee proposed by Obama to help recoup TARP funds. Once more, a rhetorical but entirely justifiable question: What is wrong with these people?

"We want our money back." - President Obama

Why Obama Must Take On Wall Street

by Robert Reich

Wednesday, January 13, 2010

It has been more than a year since all hell broke loose on Wall Street and, remarkably, almost nothing has been done to prevent all hell from breaking loose again.

In fact, close your eyes and you could be back in the wilds of 2007. Bankers are still making wild bets, still devising new derivatives, still piling on debt. The big banks have access to money almost as cheaply as in 2007, courtesy of the Fed, so bank profits are up and bonuses as generous as at the height of the boom.

The only difference is that now the Street’s biggest banks know they are “too big to fail” and will be bailed out by taxpayers if they get into trouble – which means they have every incentive to make even riskier bets. And, of course, American taxpayers are out some $120bn, while millions have lost their homes, jobs and savings.

All could be forgiven if the House and Senate committees with responsibility for coming up with new regulations were about to come down hard on the Street and if the Obama administration were pushing them to. But nothing of the sort is happening. Yes, the White House has indicated interest in charging banks for the cost of the bailout, but this is not real reform; it’s just making up for some of the direct costs of cleaning up the mess.

Last week, Senator Chris Dodd, chairman of the Senate banking committee, announced he would not seek re-election next November, recasting himself as a lame duck who will do whatever the banks want. Mr Dodd’s decision “makes it more likely that regulatory reform will be enacted”, says Edward Yingling, chief executive of the American Bankers Association, because it “frees him from political dynamics that would have made it more difficult for him to compromise”. Translated: Dodd’s committee will report out a bill – Democrats would be embarrassed not to – but it will be weak because voters can no longer penalise Mr Dodd for rolling over for the Street.

The bill that has already emerged from the House is hardly encouraging. Dubbed the “Wall Street Reform and Consumer Protection Act”, it effectively guarantees future Wall Street bail-outs. The bill authorises Fed banks to provide up to $4,000bn in emergency funding the next time the Street crashes. That is more than twice what the Fed pumped into financial markets last year. The bill also enables the government, in a banking crisis, to back financial firms’ debts – a wonderful insurance policy if you are a bondholder. To be sure, the bill authorises the Fed and Treasury to spend these funds only when “there is at least a 99 per cent likelihood that all funds and interest will be paid back,” but predictions about pending economic disasters can be conveniently flexible, especially when it comes to bailing out the Street.

If this were not enough, the House bill creates regulatory loopholes big enough for bankers to drive their Ferraris through. Consider derivatives. Last year, as taxpayers threw money at the Street, congressional leaders promised to put derivative trading on public exchanges. The prices of derivatives could be disclosed and margin requirements imposed, making it more likely that traders would make good on their bets. Yet the House bill exempts nearly half the $600,000bn of outstanding derivatives trades.

The bill also allows – but, notably, does not require – regulators to “prohibit any incentive-based payment arrangement”. This makes fat bonuses the norm unless a regulator has reason to prevent them. And as we witnessed last year, bank regulators tend not to disturb the status quo. The House bill does not even make an attempt to unravel the conflict of interest that led credit ratings agencies to turn a blind eye to the risks the Street was taking on.

To its credit, the House bill does create a Consumer Financial Protection Agency to protect borrowers from predatory lending. Banking regulators have authority to protect consumers but failed to do so, so consolidating these powers in a new agency makes some sense. But Senate Republicans are dead-set against it, and Mr Dodd’s new willingness to compromise may well doom it in that chamber.

What is truly remarkable is what Congress and the administration have shown no interest in doing. Large numbers of Americans have lost their homes to bank foreclosures or are in danger of doing so. Yet American bankruptcy law does not allow homeowners to declare bankruptcy and have their mortgages reorganised. If it did, homeowners would have more bargaining power to renegotiate with banks. But neither Congress nor the administration has pushed to change the bankruptcy laws. Wall Street opposes such change and was instrumental in narrowing the scope of personal bankruptcy in the first place.

Nor have lawmakers shown any enthusiasm for resurrecting the wall that used to exist between commercial and investment banking. The Glass-Steagall Act, passed in the wake of the Great Crash of 1929, separated the two after it became obvious that commercial deposits needed to be insured by government and kept distinct from the betting parlour of investment banking. But Wall Street forced Congress to take down the wall in 1999, enabling financial supermarkets such as Citigroup to use its deposits to make all sorts of bets. Even Obama adviser and former Fed chief Paul Volcker has argued that the two functions should be separated again.

Nor is anyone talking seriously about using antitrust laws to break up the biggest banks – the traditional tonic for any capitalist entity that is “too big to fail”. Five giant Wall Street banks now dominate US finance. If it was in the public’s interest to break up giant oil companies and railroads a century ago, and the mammoth telephone company AT&T, it is not unreasonable to break up the almost infinitely extensive tangles of Citigroup, Bank of America, JPMorgan Chase, Goldman Sachs and Morgan Stanley. No one has offered a clear reason why giant banks are important to the US economy. Logic and experience suggests the reverse.

What happened to all the tough talk from Congress and the White House early last year? Why is the financial reform agenda so small, and so late?

Part of the answer is that the American public has moved on. A major tenet of US politics is that if politicians wait long enough, public attention wanders. With the financial crisis appearing to be over, the public is more concerned about jobs. Another 85,000 jobs were lost in December, bringing total losses since the recession began in December 2007 to over 7m. One out of six Americans is unemployed or underemployed.

Yet if the president and Congress wanted to, they could help Americans understand the link between widespread job losses and the irresponsibility on Wall Street that plunged America into the Great Recession. They could make tough financial reform part of the answer to sustain-able jobs growth over the long term.

True, financial regulation does not make a powerful bumper sticker. Few Americans know what the denizens of Wall Street do all day. Even fewer know or care about collateralised debt obligations or credit default swaps. To the extent Americans have been paying attention to the details of any public policy, it has been the healthcare reform bill. But that only begs the question of why financial reform has not been higher on the agenda of the president and Democratic leaders.

A larger explanation, I am afraid, is the grip Wall Street has over the American political process. The Street is where the money is and money buys campaign commercials on television. Wall Street firms and executives have been uniquely generous to both parties, emerging as one of the largest benefactors of the Democrats. Between November 2008 and November 2009, Wall Street doled out $42m to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders. In the first three quarters of 2009, the industry spent $344m on lobbying – making the Street one of the major powerhouses in the nation’s capital.

Money is powerful. Talk is cheap. Mr Obama recently called the top bankers “fat cats”, and the bankers insisted they were shocked – shocked! – to learn how intransigent their lobbyists had been in opposing financial reform. The bankers even claimed a “disconnect” between their intentions and their lobbyists’ actions. This was all for the cameras, of course.

But the widening gulf between Wall Street and Main Street – a big bail-out for the former, unemployment checks for the latter; high profits and giant bonuses for the former, job and wage losses for the latter; buoyant expectations of the former, deep anxiety and cynicism by the latter; ever fancier estates for denizens of the former, mortgage foreclosures for the rest – is dangerous. Americans went ballistic early last summer when AIG executives got big bonuses after taxpayers had bailed them out. They will not be happy when Wall Street hands out billions in bonuses very soon. Angry populism lurks just beneath the surface of two-party politics in America. Just listen to Sarah Palin or her counterparts on American talk radio and yell television. Over the long term, the political stakes in reforming Wall Street are as high as the economic.

Ten Things the US Can and Should Do for Haiti

Published on Thursday, January 14, 2010 by CommonDreams.org

 

by Bill Quigley

 

One. Allow all Haitians in the US to work. The number one source of money for poor people in Haiti is the money sent from family and workers in the US back home. Haitians will continue to help themselves if given a chance. Haitians in the US will continue to help when the world community moves on to other problems.

Two. Do not allow US military in Haiti to point their guns at Haitians. Hungry Haitians are not the enemy. Decisions have already been made which will militarize the humanitarian relief - but do not allow the victims to be cast as criminals. Do not demonize the people.

Three. Give Haiti grants as help, not loans. Haiti does not need any more debt. Make sure that the relief given helps Haiti rebuild its public sector so the country can provide its own citizens with basic public services.

Four. Prioritize humanitarian aid to help women, children and the elderly. They are always moved to the back of the line. If they are moved to the back of the line, start at the back.

Five. President Obama can enact Temporary Protected Status for Haitians with the stroke of a pen. Do it. The US has already done it for El Salvador, Honduras, Nicaragua, Sudan and Somalia. President Obama should do it on Martin Luther King Day.

Six. Respect Human Rights from Day One. The UN has enacted Guiding Principles for Internally Displaced People. Make them required reading for every official and non-governmental person and organization. Non governmental organizations like charities and international aid groups are extremely powerful in Haiti - they too must respect the human dignity and human rights of all people.

Seven. Apologize to the Haitian people everywhere for Pat Robertson and Rush Limbaugh.

Eight. Release all Haitians in US jails who are not accused of any crimes. Thirty thousand people are facing deportations. No one will be deported to Haiti for years to come. Release them on Martin Luther King day.

Nine. Require that all the non-governmental organizations which raise money in the US be transparent about what they raise, where the money goes, and insist that they be legally accountable to the people of Haiti.

Ten. Treat all Haitians as we ourselves would want to be treated.

Bill is Legal Director at the Center for Constitutional Rights and a law professor at Loyola University New Orleans.  He is a Katrina survivor and has been active in human rights in Haiti for years with the Institute for Justice and Democracy in Haiti.  [email protected]

What You're Not Hearing about Haiti (But Should Be)

Published on Thursday, January 14, 2010 by CommonDreams.org

by Carl Lindskoog

In the hours following Haiti's devastating earthquake, CNN, the New York Times and other major news sources adopted a common interpretation for the severe destruction: the 7.0 earthquake was so devastating because it struck an urban area that was extremely over-populated and extremely poor.  Houses "built on top of each other" and constructed by the poor people themselves made for a fragile city.  And the country's many years of underdevelopment and political turmoil made the Haitian government ill-prepared to respond to such a disaster.   

True enough.  But that's not the whole story.  What's missing is any explanation of why there are so many Haitians living in and around Port-au-Prince and why so many of them are forced to survive on so little.  Indeed, even when an explanation is ventured, it is often outrageously false such as a former U.S. diplomat's testimony on CNN that Port-au-Prince's overpopulation was due to the fact that Haitians, like most Third World people, know nothing of birth control.   

It may startle news-hungry Americans to learn that these conditions the American media correctly attributes to magnifying the impact of this tremendous disaster were largely the product of American policies and an American-led development model.   

From 1957-1971 Haitians lived under the dark shadow of "Papa Doc" Duvalier, a brutal dictator who enjoyed U.S. backing because he was seen by Americans as a reliable anti-Communist. After his death, Duvalier's son, Jean-Claude "Baby Doc" became President-for-life at the age of 19 and he ruled Haiti until he was finally overthrown in 1986.  It was in the 1970s and 1980s that Baby Doc and the United States government and business community worked together to put Haiti and Haiti's capitol city on track to become what it was on January 12, 2010.   

After the coronation of Baby Doc, American planners inside and outside the U.S. government initiated their plan to transform Haiti into the "Taiwan of the Caribbean."  This small, poor country situated conveniently close to the United States was instructed to abandon its agricultural past and develop a robust, export-oriented manufacturing sector.  This, Duvalier and his allies were told, was the way toward modernization and economic development.   

From the standpoint of the World Bank and the United States Agency for International Development (USAID) Haiti was the perfect candidate for this neoliberal facelift.  The entrenched poverty of the Haitian masses could be used to force them into low-paying jobs sewing baseballs and assembling other products.   

But USAID had plans for the countryside too.  Not only were Haiti's cities to become exporting bases but so was the countryside, with Haitian agriculture also reshaped along the lines of export-oriented, market-based production.  To accomplish this USAID, along with urban industrialists and large landholders, worked to create agro-processing facilities, even while they increased their practice of dumping surplus agricultural products from the U.S. on the Haitian people.   

This "aid" from the Americans, along with the structural changes in the countryside predictably forced Haitian peasants who could no longer survive to migrate to the cities, especially Port-au-Prince where the new manufacturing jobs were supposed to be.  However, when they got there they found there weren't nearly enough manufacturing jobs go around.  The city became more and more crowded.  Slum areas expanded.  And to meet the housing needs of the displaced peasants, quickly and cheaply constructed housing was put up, sometimes placing houses right "on top of each other."   

Before too long, however, American planners and Haitian elites decided that perhaps their development model didn't work so well in Haiti and they abandoned it.  The consequences of these American-led changes remain, however.    

When on the afternoon and evening of January 12, 2010 Haiti experienced that horrible earthquake and round after round of aftershock the destruction was, no doubt, greatly worsened by the very real over-crowding and poverty of Port-au-Prince and the surrounding areas.  But shocked Americans can do more than shake their heads and, with pity, make a donation.  They can confront their own country's responsibility for the conditions in Port-au-Prince that magnified the earthquake's impact, and they can acknowledge America's role in keeping Haiti from achieving meaningful development.  To accept the incomplete story of Haiti offered by CNN and the New York Times is to blame Haitians for being the victims of a scheme that was not of their own making.  As John Milton wrote, "they who have put out the people's eyes, reproach them of their blindness."   

Carl Lindskoog is a New York City-based activist and historian completing a doctoral degree at the City University of New York.  You can contact him at [email protected]