California Free Press

Louisiana Governor Bobby Jindal Is Against Federal Government Except When He Needs Help

by John Lawrence

All the small government and states' rights crowds including the tea partiers don't have a nice thing to say about the Federal government except when there's a natural or man made disaster and then they all go crying to the Federal government for help. That's especially true for Bobby Jindal. He didn't even want to accept stimulus funds from the Federal government. He doesn't want to pay taxes. So where's the money supposed to come from to bail out his state from the biggest man made disaster in American history? To be consistent with his philosophy which exalts private enterprise over government, he should go crying to BP, the corporation that caused the disaster in the first place. Why should the taxpayers from other states support a governor who doesn't believe in paying taxes to help people in need outside his own state? Why shouldn't Jindal be left to deal with BP himself, and good luck with that? He's against paying taxes to the Federal government so deal with BP to get the situation resolved. Don't bother Obama.

Here is some of Jindal's BS:

"The strength of America is not found in our government. It is found in the compassionate hearts and enterprising spirit of our citizens. ... "To solve our current problems, Washington must lead. But the way to lead is not to raise taxes and put more money and power in hands of Washington politicians. The way to lead is by empowering you - the American people. Because we believe that Americans can do anything. ... "Democratic leaders say their legislation will grow the economy. What it will do is grow the government, increase our taxes down the line, and saddle future generations with debt. Who among us would ask our children for a loan, so we could spend money we do not have, on things we do not need? That is precisely what the Democrats in Congress just did. It's irresponsible. And it's no way to strengthen our economy, create jobs, or build a prosperous future for our children. ... "In recent years, these distinctions in philosophy became less clear - because our party got away from its principles. You elected Republicans to champion limited government, fiscal discipline, and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington. Republicans lost your trust - and rightly so. ... "A few weeks ago, the President warned that our nation is facing a crisis that he said 'we may not be able to reverse.' Our troubles are real, to be sure. But don't let anyone tell you that we cannot recover - or that America's best days are behind her."

So Jindal what the Federal government should tell you is that you're on your own. Get BP to pay your bills. Don't come crying to the Federal government to raise taxes so that it can bail out your state. If you need more money, raise taxes in your own state to pay for it.

Although Jindal took stimulus money for Louisiana, he refused to give the Federal government any credit for it.

The following is from Think Progress:

Yesterday on CNN, host Wolf Blitzer asked Gov. Bobby Jindal (R-LA) about the state of the Louisiana economy. Jindal quickly boasted that he was “proud” of his state’s job growth and “economic development.” Given Jindal’s apparent belief that the recession is over in his state, Blitzer then asked if he was willing to give Obama “some credit” for the $3.2 billion dollars Jindal is accepting from the Recovery Act:

BLITZER: Are you ready to give the president of the United States some credit for turning — helping to turn this economy around?

JINDAL: Look, I love what he says. And I — I do have a lot of skepticism about, in D.C., the fact they think that we can spend our way into prosperity, borrow our way into prosperity. Now they want to tax our way into prosperity. [...]

BLITZER: Excuse me for interrupting. Let’s stay on the stimulus for a second. Louisiana — we just checked — they were getting, your state, $3.3 billion, part of the economic recovery, the stimulus money. Already, they have made, what, they say, $2.2 billion available. They have paid out almost a half-a- million — a half-a-billion dollars, $480 million. I assume, even though you — you hated the stimulus package, you’re taking the money, and it’s helping. [...]

The fact that Jindal refused to give the Recovery Act a single word of acknowledgment for its role in turning around the Louisiana economy speaks to his political motivations, not reality.

As ThinkProgress first reported, Jindal has been touring his state boasting about job creation, while simultaneously giving away jumbo-sized checks filled largely with stimulus money to local Louisiana communities. Jindal plastered his own name on the checks and until recently, did not even reveal that much of the money was from the Recovery Act. Below is a picture compilation of checks Jindal has presented to Louisiana communities such as Lafayette, Terrebonne Parish, St. Landry Parish, and Vernon Parish:

Jindal’s self-proclaimed greatest accomplishment — job growth — is tied directly to the very “Washington spending” he denounces on a daily basis. Of the education money Jindal is accepting, nearly $10 million is for vocational training. Weatherization programs in Louisiana, totaling nearly $54 million from the Recovery Act, create jobs. Additional Recovery Act funds — including everything from law enforcement training programs, infrastructure grants, to community service programs — also boosts the employment rate in the Bayou State. [END]

So why should we the taxpayers feel sorry for Bobby Jindal and rush to bail him and his state out when he has no respect for the Federal government and its taxpayers from other states? Would Jindal be in favor of raising Federal taxes to bail out California as teachers are being laid off and poor people are being thrown out of the CalWorks welfare program?

So Jindal, excercise some personal responsibility yourself. I assume you don't want the Federal government to go more into debt to bail out your state? So why don't you have the balls to ask the Federal government to raise taxes so that it might have the funds in its coffers to bail out states like yours when they suffer natural and man made disasters? Or better yet raise taxes on rich Louisianians and leave us taxpayers from other states alone. It's not my idea, it's yours! Be consistent with your own philosophy!

DESCARTES “ I THINK, THEREFORE I AM” VERSUS AN OLD AFRICAN TRIBAL SAYING, “I AM BECAUSE WE ARE”

by Frank Thomas

 

While Descartes developed the Cartesian concept of Mind as the center of Knowledge and Reason as setting the human Individual above Church and State,  there is an ancient  African tribal concept of focusing leadership on interests of the Collective, on generating Solidarity and shared Truth  among a firm’s employees, as well as engaging  individual positive energy and inspiration. In contrast, hierarchical leadership or leadership by those feeling they have a lock on truth,  like radical fundamentalists or political demogogues, inevitably magnifies the human tendency to manipulate reason to distort Truth, creating destructive divisions/tensions in companies as well as whole societies. Diminishing the role of the “I” and increasing a broader “WE” or collective consciousness by leadership through dialogue widens the picture of reality and “an attitude of noting and using the differences between people constructively and bridging opposites.”

 

Over the past 30 years, I have cringed to see how the language of the political “ISMS” has become a caricature of excessive self-rightous dialogue, undermining open, civil  discussion of critical issues. The result?  Politicians tell us that Europe is a “Socialist World” :  where people have placed their destiny in the hands of “Big Brother Government;”  Socialist health care systems cause the death of one in five people;  personal freedoms are much more limited;  that Obama’s Public health care option is the beginning of the end of our democracy and will result in “Death Panels judging grandma.” And the media contributes to this ridiculous soap by highlighting the sensational with glib one-liners,  playing to the suspicions, fears,  and biased judgments of gullible listeners.

 

In the post-WWII 50s (under Truman/Eisenhower), in the 60s and even 70s, concern for capitalistic market dynamics  seemed in respectful alliance with a concern to build welfare and opportunities for Everyone. The general understanding was, “If the Community is not in a healthy state, we are all in trouble.”  It was taken for granted that government  “Of, By, and For the People” looks after the common good and a fair playing field for ALL citizens. These were the core principles of the Harry Trumans and Dwight Eisenhowers, and, humbly, my generation.

 

Somehow, in the 80s we started sailing on a new social-economic course where the “I” was the ship’s Captain encouraging  survival- of- the- fittest themes and to each his own …. where living together in harmony with the past and with respect for each other and our common interests has become a lost tradition.  Socially isolated collectives have emerged characterized by the class dividing lines of wealth and income between the Haves and Have Nots.

 

Outsourcing, automation, technology, downsizing, redundencies caused by acquisitions/mergers and restructurings have all contributed to the social polarization and insecurity …. where it’s more difficult to trust the establishment and even one another …. where the unprepared  and the vulnerable cannot keep pace with a faceless Internet world overwhelming  one’s self-identity and self-worth in many subtle ways.

 

In this regard, Obama is trying to bring back the “WE” in our consciousness for a better society in close touch with its citizens; better in control of its selfish-genes; better able to curb demogogic excesses and narrow perspectives: better able to eliminate the money influence-peddlers stealing our Constitutional democracy. This transformation will come when majority of citizens feel in their souls the necessity to change directions, to think pragmaticall and beyond the blinds of ideological purity, and thus to come up with new ideas/initiatives to solve complex problems …. rather than falling prey to worst fears and divisive dogmas – self-imposed or orchestrated by others.

 

As no one can do better, Ted Kennedy epitomized superbly a grass roots, bottom-up governance for the common good and mutual responsibility to reform broken system parts , President Obama has taken up the challenge.  “I Am because WE Are” …. is a call to some long-lost American unifying values :

 

--  Compromise

--  Cooperation

--  Common Sense

--  Creativity, and

--  Constructive "CAN DO" Mindset Bringing EVERYONE a Step FOREWARD

________________________________________________________________

 

POST-MORTEM WORDS FROM A RESPECTED EUROPEAN CEO:

 

Michael Levy, retiring after 40 years with the French advertsing giant Publicis Groupe and now as Chairman and Chief Executive, resonated these values  quite well when he said this week: “ We are living through an unprecedented crisis. It’s far more than a financial crisis. It’s a loss of meaning, direction and proper values …. In fact, I believe that over the past 20 years (at least) the world has lost its bearings and has begun to wager with its moral values. Almost unnoticed, ethics have given away to cynical opportunism in business, in finance, in politics, and in life in general….For all these betrayals of ethics, the bill is very high. It is being paid, in the first place, in millions of jobs destroyed, wealth vaporized and businesses weakened…. It is being paid also, and above all, in a crisis of confidence. A crisis that no financial rescue plan can make go away. People, consumers, employees, shareholders – who now has any confidence? In what? In whom?

 

Sustainable development, social responsibility, corporate governance and transparency:  these are the new orientation points, and value creation must be beneficial for All, and not only beneficial for Shareholders. Value creation must be “good” – ethical, sustainable and devoid of cynicism. Contrary to what some banking leaders seem to believe, it is not enough that something is ‘legal.’ It must ethically be irreproachable.

 

The sea-change of values that lies ahead of us will change our way of thinking and of acting. What is useful and what is superfluous? What is needed and what is merely wanted? These are the tradeoffs that we will be making. This is what will form our criteria in the decades to come. Consumption will not be immune to these changes. Consume better to consume less, rather than consume more for less: that will be the new watchword.  …. In short, we must learn to reconnect with the true force of capitalism: the success of the individual for the benefit of the community.  And maybe a little generosity will even generate more growth.”

________________________________________________________________

 

An honest, introspective confession and challenge we Americans haven’t got around to … YET.

 

By:  Frank Thomas

The Netherlands

August 2009

.

 

Why Deficit Hawks Are Killing the Recovery

by Robert Reich

Friday, May 28, 2010

Consumer spending is 70 percent of the American economy, so if consumers can’t or won’t spend we’re back in the soup. Yet the government just reported that consumer spending stalled in April – the first month consumers didn’t up their spending since last September. Instead, consumers boosted their savings, probably because they’re worried about the slow pace of job growth (next Friday’s report will likely show gains, but the number will continue to be tiny compared to the overall ranks of the jobless), as well as a lackluster “recovery.” They’re also still carrying enormous debt burdens. One in four home owners is still underwater. And median wages are going nowhere.

So what’s Congress doing to stoke the economy as consumers pull back? In a word, nothing. Democratic House leaders yesterday shrank their jobs bill to a droplet. They jettisoned proposed subsidies to help the unemployed buy health insurance, as well as higher matching funds for state-run health programs such as Medicaid. And they trimmed extended unemployment insurance.

“Members who are from low unemployment areas are very concerned about the deficit,” Nancy Pelosi explained. She might have added that so-called Blue Dog Democrats have the same warped view of fiscal policy as most Republicans. They fail to distinguish between short-term deficits (good) and long-term debt (bad).

Deficit-cutting fever has also struck the Senate – except when it comes to the military, of course. Last night the Senate okayed a $60 billion war-funding bill for Afghanistan. So far this year, the Afghan war has cost more than the war in Iraq, in part because the infrastructure in Afghanistan is so much more primitive than in Iraq that our tax dollars are needed to build it so troops and tanks can move more easily over the terrain. But spending on road-building in Afghanistan does little to boost the American economy.

Meanwhile, state and local governments continue to slash and burn. They’re laying off even more teachers, fire fighters, social workers, and police; cancelling more programs for the poor and working class; and raising sales taxes. The fiscal drag from all of this will be around $150 billion in 2010.

Without consumers opening their wallets, and without government making up the difference, we’re careening toward a double-dip recession. The long-term deficit (i.e. Medicare as boomers become seniors) needs attention, but right now it’s critical for government to spend. Otherwise we have no hope of getting free of the gravitational pull of this recession.

Reformulating Patriotism

by John Lawrence

What is patriotism? Is it just saluting the flag, singing the national anthem, getting choked up when the US wins a gold medal at the Olympics, stuff like that? All these expressions of patriotism are merely lip service. They are insubstantial. Or is it patriotic, as George Bush said, to go shopping? Hey, it's Memorial Day. Be patriotic. Go shopping. In a "me first" society, the values after "me first" are my family first, then my town or city or high school first, then my state first and then my country first. So real patriots don't actually put their country first; they put themselves first. Their quest for the "American Dream" is a quest for individual enrichment while they give lip service to "patriotism."

Real patriotism should be the quest  to make the country a better place for the people living in it and by extension to make the world a better place for the people in it. Supporting the military is not necessarily patriotic if the military is engaged in activities that are destroying the planet, overthrowing democratically elected governments, supporting military dictatorships and fighting wars of aggression. (See "A Short History of US Overthrow of Democratically Elected Regimes or Why the Rest of the World Hates Us".) Patriotism is speaking out against such militaristic endeavors. On the other hand, World War II was a patriotic war because it stopped wars of aggression by Germany and Japan. It was one of the few "good wars." Certainly the Spanish American war was a put up job. World War I was a disastrous excercise in patriotism in which young men were just itching for a war in which they hoped to attain glory and be home for Christmas. It didn't work out that way.

The US government for the most part has foreclosed opportunities to be truly patriotic. Those opportunities would be to help construct things instead of destroying things, to help build infrastructure instead of destroying infrastructure, to enhance the environment and ecosystem instead of destroying it, to eliminate disease instead of creating it. Good deeds are left to private charity. Why? A government engaged in good deeds would be truly worthy of support and that would be truly patriotic. When a government's only activity is militarism, it's not patriotic to support such a government. When a government devotes the lion's share of its resources to the military, it is not caring for its own people or creating peace in the world. When a government cuts off support for the unemployed, it hastens their absorption into the destitute class. When a government is working to build peace in the world, participation in those kinds of activities is patriotic. The Peace Corps and AmeriCorps are two vastly underfunded programs which are truly patriotic. When the budgets for programs such as these exceed the budget for the military-industrial complex and patriotism is defined not in military terms but in terms of how much good America and her people are doing, then patriotism will be a valid notion. When the "me first" society becomes a "we're all in this together" society, then patriotism will be a valid sentiment.

This is from the AmeriCorps website: 

In 1993, President Bill Clinton signed the National and Community Service Trust Act, which established the Corporation for National and Community Service and brought the full range of domestic community service programs under the umbrella of one central organization. This legislation built on the first National Service Act signed by President H.W. Bush in 1990. It also formally launched AmeriCorps, a network of national service programs that engage Americans in intensive service to meet the nation’s critical needs in education, public safety, health, and the environment. The newly created AmeriCorps incorporated two existing national service programs: the longstanding VISTA (Volunteers in Service to America) program, created by President Lyndon Johnson in 1964 and the National Civilian Community Corps (NCCC).

Patriotism as now defined is based on militarism. Patriotic displays are expressions of militarism. Love of country is expressed in jingoistic terms: "We're number one!" Instead, war and militarism should be thought of as necessary evils instead of exalting them. The goal should be to eliminate them while at the same time building the foundations for peace and prosperity in the world. There should be opportunities for those who want to serve their country by eliminating poverty, building infrastructure, saving the environment, curing the sick and extending helping hands to the underserved and downtrodden.

God bless America.

It's Obvious: They Don't Know What They're Doing

by John Lawrence

Does anyone doubt that the biggest oil spill in human history was caused by deregulation? Or the biggest financial catastrophe since the Great Depression? Or, well we could go on and on. With BP essentially unregulated and Wall Street essentially unregulated, with six lobbyists for every Congressman, with corporations promising Congressmen lucrative jobs when they exit Congress, does anyone doubt that the government has been sold to the highest bidder?

Now that BP has fouled the Gulf of Mexico for generations, they are whistling dixie as they fail to come up with a solution for "plugging the damn hole." Obviously, they don't know what they're doing, nor does anyone else know any better. If BP's knowledge and technology is insufficient to come up with a solution, no one else's is any better. So we're essentially at a loss as to what to do while the oil surges forth on an hourly basis. It should be easy: just go down there and plug the damn hole. But the hole is a mile down under the ocean where the pressure is 2000 pounds per square inch. No one is volunteering to don a wetsuit or scuba gear to be let out of a submarine to stick his finger in the dike.

Instead we're treated to the fix du jour. If this one doesn't work, BP will come up with another one. With obvious criminal negligence on BP's part, we're treated to the spectacle that we have to trust the criminal to fix the problem of their crime much as we had to trust Goldman Sachs ex-employees to fix the results of Goldman Sachs' crimes. But who else has the knowledge or the wherewithal? Not the government evidently. Any government employee including the President makes peanuts compared to Wall Street take home pays. So basically they can buy and sell the government. They have more money; they have more knowledge; they have more power.

When one Senator can hold up the passage of a bill or even for the debate to start based on some arcane rule about unanimous consent, you don't even need the filibuster to halt progress of any kind. So the whole system is dysfunctional, based on selling out to the highest bidder and the promise of a lucrative lobbying job on your way out. Money runs the government; money runs the country; money runs the message which implores us to ignore what is really happening and adopt some fiction about "freedom" instead. The only ones really free are the billionaires whose goal is to further enslave the hoi polloi with each passing year. Even the pension fund managers are their dupes. When securities are peddled to CalPERS, the largest pension fund in the world, and one hedge fund manager shorts them making $3.7 billion on one trade while the hapless pension fund manager loses his shirt on our behalf, something is wrong. When a Wolf Pack can short a whole country and drive its citizens to penury making billions for themselves in the process, something's not right. Fortunately, China had to step in to save the US stock market and the euro.

The following article is recommended reading:

Published on Thursday, May 27, 2010 by CommonDreams.org

Trusting the Scorpion: BP, the Legacy of Republican Hypocrisy and Democratic Cowardice

by John Atcheson

The progressives are up in arms over the oil spill.  Like a scene from Frankenstein, the good citizens are storming the hydrocarbon castle with torches ablaze, and pitchforks held high.

Some demand stricter regulations, some a wiser energy policy, but they're all focused on tarring BP with this heinous crime against nature.  Especially now that Obama is starting to get some blame.  An inordinate amount of energy is being spent on how we can use this event to "message," with the emphasis here on assigning the blame to BP.

It would be nice to get stricter regulations; certainly a wiser energy policy would be good.  But focusing on blaming BP is missing the point.  Of course they cut corners; of course they're sleazy.  It's what they do.

But they can do it only because we let them.  The whole thing is reminiscent of the fable about the scorpion and the frog.  If you've forgotten, it goes like this:

 A scorpion asks a frog to carry him across a river. The frog, afraid of being stung, refuses at first, but when the scorpion points out that if it were to sting the frog,  the frog would sink and the scorpion would drown as well, he relents. Yet when they reach the middle of the river, the scorpion stings him. As they are sinking,  the frog asks why, and the scorpion explains, "I'm a scorpion; it's what we do."

The hydrocarbon castle we would storm is but one building in a vast city as dark as Mordor.

That's why focusing on blaming BP, even in hopes of getting a saner energy policy, is such a waste - it's like worrying about a case of the sniffles (albeit a very bad case) when you've got end stage cancer.  Was Exxon - the mot profitable company in history last year -- not blamed for the "Exxon-Valdez?" Did it change anything?

Here's the grim reality: the oil spill is merely a symptom of a much deeper problem, one that is our fault, because for the last 30 years we've been trusting the scorpion.

The fact is, Reagan had it backwards. Government, it turns out, is often the solution and unconstrained private industry the problem.  Many of us knew this, but few have had the courage to stand up to Reagan's dangerous, but popular, fantasy, then or now. 

Indeed, when the history of the last three decades is written, it will be a story of epic hypocrisy on the part of Republicans, enabled by abject cowardice on the part of Democrats, with consequences that created a legacy far more tragic and irreversible than even this horrendous oil spill.

There may have been a few conservative ideologues who actually believed the small government, magic market mantras spouted by the likes of Reagan, Grover Norquist (I simply want to rduce [government] to the size where I can drag it into the bathroom and drown it in the bathtub) William Kristol and assorted industry-funded think tanks, but they were few and far between. 

The real reason this philosophy spread was because it was politically expedient, it was backed and funded by powerful interests who made campaign contributions, and few had the courage or conviction required to confront a fantasy that told people they didn't have to pay for the services they demanded.

Across our entire economy and society we are now reaping the harvest of that hypocrisy, and the fruits of that cowardice. 

To any remaining acolytes of Reaganism, the track record stands in stark rebuke.

The evidence mounts every day.  The BP oil spill, yes.  But also The Big Branch coal mining disaster; the sub-prime disaster; the AIG and various other Wall Street disasters; the growing income disparity between the rich and the rest of us; a global thermostat set on self-destruct; a globalized economy as volatile as a vial of nitro-glycerin - everywhere you look, you see more proof that the conservative mantra of small government and uber-free markets has completely failed. 

If one examines the record, it's pretty clear that Republicans and conservatives (effectively the same thing) never really cared much about small government.  In fact, government grew rapidly under Reagan, Bush I, and Bush II. The only time since Carter that government growth subsided was under Clinton.

Doubt that?  Here's the numbers.

If you rank all Presidents since Nixon by the number of government employees per 1000 citizens, here's what you'll find: Reagan tops the list with the most, and Bush II is next. Clinton, on the other hand, had the smallest government by number of employees.  The story is much the same for deficits: Reagan increased the federal deficit as a per cent of GDP by 10%, Bush I by 13%, and Bush II by an incredible 20%.  In contrast, Clinton lowered it by 10%.

Of course there are lots of ways to slice and dice the statistics, but any honest look at the numbers comes up with the same conclusion - Reagan, Bush I and Bush II talked about small government but presided over dramatic growth in the size of government, while Clinton actually made progress in reducing the size of government. 

And rather than having the courage to actually cut popular services, Republicans cut taxes and raised deficits to continue providing them, while making it virtually inevitable that someone, someday would have to shrink government - hopefully enough to drown it in the bathtub.  Ironically, Democrats - only slightly more interested in delivering good government than amassing power than Republicans are - did most of whatever spending cuts did happen.

So, if small government wasn't really the goal for conservatives, what was? 

Simple: weak government.  Government that couldn't constrain the vaunted private sector - the font of all good things according to conservatives' public pronouncements - the font of campaign contributions in reality as Paul Krugman pointed out in a recent column, and Thomas Frank noted in What's the Matter with Kansas?. 

And while Clinton made real progress in constraining government growth, he signed onto the Conservative notion of eviscerating government.  It was Clinton's economic team, after all, which led the charge to rescind the Glass Steagall Act - the jewel in the crown of financial deregulation, and the source of much of our misery now.  It was Clinton who  ended welfare and proclaimed the era of big government to be over.

It wasn't just Clinton. Democrats quickly became complicit in this epic hypocrisy. They formed the DLC and went after corporate campaign contributions, they triangulated, they became split-the-difference Democrats, adopting much of the conservative playbook, and legitimizing more of it.

Aside from the obvious ethical and moral issues, the problem with this strategy is that when the policy, philosophy or system fails, the triangulator owns a big share of the catastrophes that failure creates.

For example, back to the BP oil disaster.  Just weeks before it occurred, in a classic triangulation, Obama announced that he supported off-shore drilling.  Because he failed to take a stand then, he couldn't avoid taking some of the blame for the spill.  Had he made Republican deregulation an issue and opposed offshore drilling rather than cratering to the drill-baby-drill crazies - had he stood on principle - he wouldn't be in a defensive position, trying to pass off blame and criticism to BP.  Rather he would have made deregulation the issue, and he'd be leading a popular charge against a broken regulatory system and a failed political philosophy, putting conservatives in a defensive position. 

That's right, because of political cowardice and a too-clever-by-a-half strategy, the Obama administration is fending off blame for something Republicans, conservatives, and the drill-baby-drill crowd fought to put in place.

And this is just one example of a dynamic that has dominated politics since Reagan. 

You can't confront Wall Street when you've set up Goldman Sachs South in the US Treasury and the White House, stocking it with the very folks who created the problem.

You can't confront Health Care crazies when you've made back room deals with big Pharma, and preemptively ceded the victory to private industry. 

You can't confront the collapse of the educational system, if you've advocated tax cuts.  Look at California, which was at the vanguard of the tax cutting frenzy.  Their educational system went from number 1 in the country when Reagan took over to number 47, now. 

You can't get out of illegitimate and ill-advised wars when you've given them legitimacy.  Come on.  Does anyone really believe the US has a strategic stake in Afghanistan?  And even if you did, does anyone believe that occupying the hapless country with conventional military forces is the way to deal with it?  Let's face it, we doubled down on this war because Democrats thought it would be the best way to inoculate themselves against the dreaded "soft on defense" epithet.

In fact, Democrats have been so ready to run from name calling it's as if they're wearing track shoes and poised in starting blocks, the better to sprint from their convictions at the first whiff of a meanie. 

They've been so eager for power, that they stopped thinking about why the want it - it became an end, not a means.

If we'd been willing to stand on principle for the last three decades, we might have lost a few elections, but at least the debate would be framed, the battle lines clear.

And when the inevitable failures from the conservative hypocrisy came, Tea-partiers might have been pouring into the streets demanding that the rich pay their fair share of taxes and the corporations quit exploiting humanity and the planet so that a few CEOs might buy an extra 25,000 square foot vacation home in Barbados.  Indeed, they might even be demanding that government fulfill its role as guarantor of a civil society.

Now, instead, no one believes government has a role.

Bottom line: we're not having the debate this country so desperately needs to have because for decades, we've run from that debate, and to do so now would be to expose the full depth of that cowardice.   

That's why watching liberals and progressives falling all over themselves trying to figure out how to fix the blame on BP is such a tragedy. Even if they succeed the root cause of the disaster remains, and far more serious issues go unaddressed.

We are now fording difficult passages - as dangerous as any this country has ever faced - and until we confront the larger conservative failure, we will do so with the scorpion on our collective back. 

The countless failures of Reaganism are laid out like stepping stones across this broad river we must ford. 

We can see, on the other side, shimmering in the distance, the promised land - a land in which citizens run government, not corporations; in which the wealth of our collective endeavors is shared among us all, not ceded to the top 1%; a land in which we treat nature with the care and reverence our very survival demands, not as a spare parts shed and waste pile; a land in which government is the way we come together to meet the great challenges of the 21st Century, not a punch line to a cynical and manipulative speech given by corporate lackeys posing as politicians.

The choice is clear.  We could treat each of the national disasters facing us as discreet entities, in which case we attempt to swim the river with the scorpion on our back.  Or with a little courage and a little integrity, we could confront them as symptoms of the larger failures of conservatism that they are, in which case we simply step across the stones before us to reach the other side.

We have no choice.  Conservatism's failure is complete, the consequences of not confronting that failure too dear.  The time is now; cowardice is no longer an option. All we lack is a leader with the courage to take the first step.

Mr. Obama, will you be that leader?

John Atcheson's writing has appeared in the New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News, the Memphis Commercial Appeal, as well as in several wonk journals. His last article for Common Dreams was "Fear, Ignorance and the Summer of Our Discontent" on 10/4/09. He is currently at work on a fictional Trilogy that centers on climate change.  Atcheson's book reviews are featured on Climateprogress.org. Email to: [email protected]

What Is an Emergency?

by Robert L. Borosage

Posted: May 26, 2010 11:24 AM, Huffington Post

Congress is about to pass an additional $32 billion to pay for the war In Afghanistan. It will have overwhelming bipartisan support, with legislators eager to display their fealty to the troops in an election year.

At the same time, the Congress is struggling with a $23 billion bill to forestall the layoff of nearly 300,000 teachers next year, championed by Sen. Tom Harkin and Rep. George Miller. This faces a Republican filibuster and the opposition of many blue Dog Democrats, who argue that it shouldn't be considered emergency spending. (Harkin has now given up on passing it in the Senate directly. The only hope is that the House will pass it as part of the military supplemental and perhaps then the Senators will swallow it.)

What kind of country are we? In the worst economic recession in 70 years, competitive industrial nations must choose their priorities -- what gets saved, what must be sacrificed. No sensible leadership would choose to make children -- particularly the children of working and poor families -- pay the cost of the downturn.

The damage is already being done. Hawaii has gone to a four-day school week; districts in Kansas are headed there. Detroit is closing more than 40 schools. Kansas City wants to shutter more than 50% of its school buildings.

Indiana and Arizona have eliminated free all-day kindergarten. One third of districts are considering eliminating summer school this year. Nearly two-thirds anticipate increasing class size next year. Classes may reach 35 students in Chicago elementary schools.

This surely is how great nations decline. Like Rome and Britain before us, Washington now chooses to police the world, even as it cuts back the education of the nation's most vulnerable children. We fight two wars on the other side of the world, spend more defending South Korea from North Korea than the South Koreans do, increase military spending already nearly as great as the rest of the world combined while saying we can't afford vital investments at home.

Last month, an iconic article in the New York Times recorded the costs of this folly. The Times reported from Beijing that the Chinese were preparing a bid to build the bullet train from San Francisco to LA. The director of high speed rail in China, Zheng Jian, noted that "We are the most advanced in many fields, and we are willing to share with the U.S."

High speed rail requires financing, very sophisticated technology and advanced engineering -- and China is ready to supply the cash, the technology and the high end engineers and skilled technicians. They would hire Americans to assemble the parts and lay the track.

Why is China so far ahead? It is estimated that the U.S. will spend $13 billion over the next five years on high speed rail routes (and that only because the president insisted it be part of the recovery act). China will spend $300 billion in the next three years. It is opening 1200 miles of high speed rail track this year alone.

This of course is a stunning contrast to 150 years ago when the U.S. imported Chinese laborers to help build the transcontinental railroad. Then we were laying more rail line than the rest of the world combined, part of our rise to the world's industrial leader. Then we were satisfied with uniting the continental United States. Now we stand alone as the world's globocop. But our schools no longer lead the world. We've moved from a high-wage manufacturing economy to a low-wage service economy. Our trade deficit -- $2 billion a day before the collapse, is back up to over $1 billion and growing. We run a high tech trade deficit with China. We've come a long way. We can only hope that the Chinese treat our workers better than we treated the Chinese immigrants those many years ago.

P.S. Please don't give me lectures on our debt and the need to "pay for it." Conservatives in both parties don't demand we pay for the increased so-called "emergency" spending for Afghanistan. And they oppose many ways to "pay for it" that would be immensely popular with their voters, but not their donors: tax the big banks, slow speculation with a financial speculation tax, end the "carried interest" scam that has billionaire private equity managers paying a lower tax rate than their secretaries.

Nor is talk about waste in public education germane. If eliminating waste were the answer, the entire war in Afghanistan could be funded with the cost of weapons the Pentagon has purchased but cannot locate. Nor is this about reforming schools. It is hard to imagine a reform agenda that would begin by firing 300,000 teachers from the nation's weakest schools... without replacing them. This is about priorities and values. And does not auger well for this nation.

BP Used Riskier Method to Seal Oil Well Before Blast

By IAN URBINA

Published: May 26, 2010 by New York Times

WASHINGTON — Several days before the explosion on the Deepwater Horizon oil rig, BP officials chose, partly for financial reasons, to use a type of casing for the well that the company knew was the riskier of two options, according to a BP document.

Douglas Brown, the Deepwater Horizon’s chief mechanic, testifying. His lawyers, Steve Gordon, seated, and Jeff Seely, conferred.

 

The concern with the method BP chose, the document said, was that if the cement around the casing pipe did not seal properly, gases could leak all the way to the wellhead, where only a single seal would serve as a barrier.

Using a different type of casing would have provided two barriers, according to the document, which was provided to The New York Times by a Congressional investigator.

Workers from the rig and company officials have said that hours before the explosion, gases were leaking through the cement, which had been set in place by the oil services contractor, Halliburton. Investigators have said these leaks were the likely cause of the explosion.

The approach taken by the company was described as the “best economic case” in the BP document. However, it also carried risks beyond the potential gas leaks, including the possibility that more work would be needed or that there would be delays, the document said.

BP’s decision was “without a doubt a riskier way to go,” said Greg McCormack, director of the Petroleum Extension Service at the University of Texas at Austin. Several other engineers agreed with Mr. McCormack’s assessment of the BP document.

Andrew Gowers, a spokesman for BP, said that there was no industry standard for the casing to be used in deepwater wells and that the approach by the Deepwater Horizon had not been unusual. “BP engineers evaluate various factors for each well to determine the most appropriate casing strategy,” he said.

The role of financial and time pressures in the rig blast is one focus of a series of hearings by the Coast Guard and the Minerals Management Service that began Wednesday in Kenner, just outside New Orleans.

Douglas H. Brown, the chief mechanic for the Deepwater Horizon, testified Wednesday that he witnessed a “skirmish” on the rig between a BP well site leader and crew members employed by Transocean, the rig’s owner, the morning of the blast.

Mr. Brown said the disagreement followed BP’s decision to replace heavy drilling fluid with lighter saltwater before the well was sealed with a final cement plug.

“Well, this is how it’s going to be,” the BP official said, according to Mr. Brown.

Mr. Gowers declined to answer questions about workers’ accusations or about whether cost may have factored into the company’s decision to use the casing system it chose for the Deepwater Horizon.

BP executives will probably face tough questioning about cost-cutting measures on Thursday when they testify before the House Committee on Natural Resources. As more details come to light about the events that led to the explosion, investigators are trying to determine which decisions and incidents — or combination of them — may have led to the accident, which killed 11 workers.

For example, Representative Nick J. Rahall II, Democrat of West Virginia and the chairman of the committee, said BP executives would face questions about why they let workers from Schlumberger, a drilling-services contractor, leave the morning of the accident without conducting a special test on the quality of the cement work.

Engineers have described these tests, called cement bond logs, as an important tool for ensuring cement integrity.

The decision about the casings will also come up during the hearings.

Professor McCormack said that while the type of casing that BP chose to use was more expensive in the short term, it was ultimately the more cost-effective and versatile alternative because it would have allowed the company to more easily drill deeper in the same hole if they decide to do so later.

But, the BP records explain, the casing chosen by the company may also cause problems if drilling mud or cement is lost or pushed away from the well into porous rocks as it is pumped.

Federal and company records indicate that that is just what happened, on more than one occasion. The rig lost all of its drilling mud in an incident in March, and in the days immediately before the explosion, records show. The well experienced several other instances of minor losses of drilling fluid and gas kicks, according to interviews with workers from the rig.

The April 20 disagreement between the BP well site leader and Transocean officials is also a growing focus of the investigation.

At a briefing in Washington on Wednesday, investigators laid out a chain of events, beginning with an operational error, that appear to have led to the accident.

The findings are preliminary, and come from BP, which owns the lease on the well and has pointed fingers at other companies for the problems on the rig, including Transocean.

The BP officials said that rig workers apparently had not pumped in enough water to fully replace the buffer liquid between the water and the mud, which stayed in the blowout preventer, the stack of safety valves at the wellhead.

This thick liquid, which is about one-third solid material, may have clogged the pipe that was used for crucial “negative pressure” tests to determine whether the well was properly sealed. The result was a pressure reading of zero (because the pipe was plugged, not because there was no pressure in the well) and the workers apparently misinterpreted that result as indicating a successful test.

Rig workers declared they were “satisfied” with the tests and started to replace drilling mud in the pipe to the seabed with water. About two hours later, the blowout and explosion occurred.

Evidence began emerging Wednesday that BP officials may have had an incentive to proceed quickly.

A member of the federal panel investigating the cause of the blast said that before the explosion, the company had hoped to use the Deepwater Horizon to drill another well by early March, but was behind schedule.

BP applied to use the Deepwater rig to drill in another oil field by March 8, said Jason Mathews, a petroleum engineer for the Minerals Management Service.

Based on an estimate of $500,000 per day to drill on the site, the delay of 43 days had cost BP more than $21 million by the day of the explosion on April 20, Mr. Mathews estimated.

A Transocean official — Adrian Rose, the company’s health, safety and environmental manager — confirmed that BP leased the rig for $533,000 per day. He could not confirm where the Deepwater Horizon was planning to go next, but he said it was going to undertake another drill, probably for BP.

Reporting was contributed by Henry Fountain and Tom Zeller Jr. from New York, Robbie Brown from Kenner, La., and Matthew L. Wald from Washington.

A version of this article appeared in print on May 27, 2010, on page A1 of the New York edition.

Long-Term Unemployment: No Help for the 99ers

Published on Tuesday, May 25, 2010 by The Huffington Post

by Arthur Delaney

This week Congress will consider legislation to reauthorize extended unemployment benefits for the rest of the year. It's going to be an epic fight: Republicans in the Senate will likely do everything they can to stand in the way of a bill projected to add $123 billion to the deficit, forcing Dem leadership to round up a supermajority for a last-minute Friday vote before Congress adjourns for its Memorial Day recess.

Job seekers search for employment opportunities at a graduate recruitment fair at the ExCeL Centre in London in 2009. This week Congress will consider legislation to reauthorize extended unemployment benefits for the rest of the year. (AFP/File/Ben Stansall)

Too bad the jobs crisis, in a big way, has already left this bill in the dust. Hundreds of thousands of people have exhausted their extended unemployment benefits. In some states, laid-off workers can receive checks for 99 weeks -- and that's all they're going to get. This bill isn't for the "99ers" and there's no proposal on deck to give them additional weeks of benefits.

"What's frustrating is that our government doesn't seem to think this is an important issue," said Christy Blake, a 35-year-old mother of two in Fruitland, Md. "We didn't put ourselves here. It wasn't our choice. I have been diligently looking for work."

Blake told HuffPost she received her last biweekly $618 unemployment check in February. She said she lost her job as an accounting associate with the city of Fruitland in September 2008 (jobless Marylanders can get 73 weeks of benefits). She said she's three months behind on rent and has no idea how she'll pay the $205.63 electric bill that came with a May 28 cutoff warning. She said she's applied for jobs at Walmart, Target and McDonald's without any luck. She has no idea what to do.

Meanwhile, members of Congress are losing their appetite even for renewing existing benefits. Several members of the House and Senate have flirted with the idea that unemployment checks make people too lazy to look for work. Most recently, Rep. Kathy Dahlkemper (D-Pa.) told the Washington Post that businesses in her district wanted to start hiring but were getting few applicants because Congress had given the unemployed so many weeks of benefits.

"Now, whether that's true or not, I'm still trying to decipher," said Dahlkemper. "But I think it's something we really need to look at."

Blake is concerned about the situation: "I think it really stinks," she said. "It's beyond stinking."

More than a million people will probably be in Blake's boat by the end of the year. She's one of 19,000 in Maryland to have exhausted all available benefits, according to the state's labor department. As of last week, 65,400 people had exhausted benefits in New York -- up from 57,000 at the end of April. In Michigan, it's 34,900. In Illinois, 22,000. In Pennsylvania, 35,200. In California, 110,609. In Florida, the number had climbed to 130,000 before May and currently stands at 193,000.

People who've been out of work for longer than six months constitute 45.9 percent of the total unemployed. Those out of work at least a year make up 23 percent.

Only two-thirds of the country's 15.3 million unemployed receive benefits when they lose their jobs in the first place. Dean Baker, co-director of the progressive Center for Economic and Policy Research, said that while he supported extending benefits in principle, "It's a bit hard to push an argument that the benefits should be extended when so many people are getting nothing."

Some families ineligible for unemployment benefits can get on welfare, formally known as Temporary Assistance for Needy Families. The total number of TANF caseloads has risen to 4.6 million as of December after a steady monthly increase from 4.1 million the previous year. Policy experts say the program serves far fewer families than it should.

Pamela Robinette of Philadelphia told HuffPost she lost her job as an administrative assistant in April 2008 and received her final unemployment check in March. She can't turn to TANF -- her children are grown. "If I'm kicked out of my apartment, I can always live in my car," she said.

Robinette said she thought she could move in with her mother in Texas -- but her sister and daughter are already there. "I'm 53 years old -- to move back in with mommy after all this time, it's degrading," she said. "I think the American government is screwing its citizens."

After a Tuesday vote, the House will send the measure to the Senate, where Democrats will need to file a time-consuming cloture motion to proceed to a final vote at the end of the week. Aside from unemployment benefits, the bill includes tax breaks for individuals and businesses and $2.5 billion to extend a jobs subsidy program through 2010 that will have funded 185,000 jobs through September (Republicans are targeting the program; Democrats didn't stand up for it when they had a chance to extend its funding in March).

An enterprising layoff victim in California garnered more than 20,000 signatures for a petition demanding Congress give the long-term jobless additional weeks of benefits, but few members of the House or Senate have indicated that they support the idea.

UPDATE 6:50 PM: A Dem aide advises that the House vote will now happen on Wednesday instead of Tuesday.

Laura Bassett contributed to this article.

Copyright © 2010 HuffingtonPost.com, Inc.

Europeans Fear Crisis Threatens Liberal Benefits

From the New York Times

By STEVEN ERLANGER

Published: May 22, 2010

PARIS — Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.

Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.

Europeans have benefited from low military spending, protected by NATO and the American nuclear umbrella. They have also translated higher taxes into a cradle-to-grave safety net. “The Europe that protects” is a slogan of the European Union.

But all over Europe governments with big budgets, falling tax revenues and aging populations are experiencing rising deficits, with more bad news ahead.

With low growth, low birthrates and longer life expectancies, Europe can no longer afford its comfortable lifestyle, at least not without a period of austerity and significant changes. The countries are trying to reassure investors by cutting salaries, raising legal retirement ages, increasing work hours and reducing health benefits and pensions.

“We’re now in rescue mode,” said Carl Bildt, Sweden’s foreign minister. “But we need to transition to the reform mode very soon. The ‘reform deficit’ is the real problem,” he said, pointing to the need for structural change.

The reaction so far to government efforts to cut spending has been pessimism and anger, with an understanding that the current system is unsustainable.

In Athens, Aris Iordanidis, 25, an economics graduate working in a bookstore, resents paying high taxes to finance Greece’s bloated state sector and its employees. “They sit there for years drinking coffee and chatting on the telephone and then retire at 50 with nice fat pensions,” he said. “As for us, the way things are going we’ll have to work until we’re 70.”

In Rome, Aldo Cimaglia is 52 and teaches photography, and he is deeply pessimistic about his pension. “It’s going to go belly-up because no one will be around to fill the pension coffers,” he said. “It’s not just me; this country has no future.”

Changes have now become urgent. Europe’s population is aging quickly as birthrates decline. Unemployment has risen as traditional industries have shifted to Asia. And the region lacks competitiveness in world markets.

According to the European Commission, by 2050 the percentage of Europeans older than 65 will nearly double. In the 1950s there were seven workers for every retiree in advanced economies. By 2050, the ratio in the European Union will drop to 1.3 to 1.

“The easy days are over for countries like Greece, Portugal and Spain, but for us, too,” said Laurent Cohen-Tanugi, a French lawyer who did a study of Europe in the global economy for the French government. “A lot of Europeans would not like the issue cast in these terms, but that is the storm we’re facing. We can no longer afford the old social model, and there is a real need for structural reform.”

In Paris, Malka Braniste, 88, lives on the pension of her deceased husband. “I’m worried for the next generations,” she said at lunch with her daughter-in-law, Dominique Alcan, 49. “People who don’t put money aside won’t get anything.”

Ms. Alcan expects to have to work longer as a traveling saleswoman. “But I’m afraid I’ll never reach the same level of comfort,” she said. “I won’t be able to do my job at 63; being a saleswoman requires a lot of energy.”

Gustave Brun d’Arre, 18, is still in high school. “The only thing we’re told is that we will have to pay for the others,” he said, sipping a beer at a cafe. The waiter interrupted, discussing plans to alter the French pension system. “It will be a mess,” the waiter said. “We’ll have to work harder and longer in our jobs.”

Figures show the severity of the problem. Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. In France, the figure now is 31 percent, the highest in Europe, with state pensions making up more than 44 percent of the total and health care, 30 percent.

The challenge is particularly daunting in France, which has done less to reduce the state’s obligations than some of its neighbors. In Sweden and Switzerland, 7 of 10 people work past 50. In France, only half do. The legal retirement age in France is 60, while Germany recently raised it to 67 for those born after 1963.

With the retirement of the baby boomers, the number of pensioners will rise 47 percent in France between now and 2050, while the number under 60 will remain stagnant. The French call it “du baby boom au papy boom,” and the costs, if unchanged, are unsustainable. The French state pension system today is running a deficit of 11 billion euros, or about $13.8 billion; by 2050, it will be 103 billion euros, or $129.5 billion, about 2.6 percent of projected economic output.

President Nicolas Sarkozy has vowed to pass major pension reform this year. There have been two contentious overhauls, in 2003 and 2008; the government, afraid to lower pensions, wants to increase taxes on high salaries and increase the years of work.

But the unions are unhappy, and the Socialist Party opposes raising the retirement age. Polls show that while most French see a pension overhaul as necessary, up to 60 percent say working past 60 is not the answer.

Jean-François Copé, the parliamentary leader for Mr. Sarkozy’s center-right party, says that change is painful, but necessary. “The point is to preserve our model and keep it,” he said. “We need to get rid of bad habits. The Germans did it, and we can do the same.”

More broadly, many across Europe say the Continent will have to adapt to fiscal and demographic change, because social peace depends on it. “Europe won’t work without that,” said Joschka Fischer, the former German foreign minister, referring to the state’s protective role. “In Europe we have nationalism and racism in a politicized manner, and those parties would have exploited grievances if not for our welfare state,” he said. “It’s a matter of national security, of our democracy.”

France will ultimately have to follow Sweden and Germany in raising the pension age, he argues. “This will have to be harmonized, Europeanized, or it won’t work — you can’t have a pension at 67 here and 55 in Greece,” Mr. Fischer said.

The problems are even more acute in the “new democracies” of the euro zone — Greece, Portugal and Spain — that embraced European democratic ideals and that Europe embraced for political reasons in the postwar era, perhaps before their economies were ready. They have built lavish state systems on the back of the euro, but now must change.

Under threat of default, Greece has frozen pensions for three years and drafted a bill to raise the legal retirement age to 65. Greece froze public-sector pay and trimmed benefits for state employees, including a bonus two months of salary. Portugal has cut 5 percent from the salaries of senior public employees and politicians and increased taxes, while canceling big projects; Spain is cutting civil service salaries by 5 percent and freezing pay in 2011 while also chopping public projects.

But all three need to do more to bolster their competitiveness and growth, mostly by changing deeply inflexible employment rules, which can make it prohibitively expensive to hire or fire staff members, keeping unemployment high.

Jean-Claude Meunier is 68, a retired French Navy official and headhunter, who plays bridge to “train my memory and avoid Alzheimer’s.” His main worry is pension. “For years, our political leaders acted with very little courage,” he said. “Pensions represent the failure of the leaders and the failure of the system.”

In Athens, Mr. Iordanidis, the graduate who makes 800 euros a month in a bookstore, said he saw one possible upside. “It could be a chance to overhaul the whole rancid system,” he said, “and create a state that actually works.”

The Total Cost of War: 3 Trillion Dollars

Massive Race Divide: Blacks Will Never Gain Wealth Equality With Whites Under the Current System

Black Agenda Report / By Glen Ford

 

A new study shows African Americans are tumbling out of the nation's economic orbit on a tragic trajectory that will never let them achieve parity with whites.

 

May 21, 2010  |  

 

Photo Credit: stevendepolo

 

The gap between Black and white household [accumulated] wealth quadrupled from 1984 to 2007, totally discrediting the conventional wisdom that the U.S. is slowly and fitfully moving towards racial equality, or some rough economic parity between the races. Like most American myths, it’s the direct opposite of the truth. When measured over decades, Blacks are being propelled economically downward relative to whites at quickening speed, according to a new study by Brandeis University.

The gap between Black and white households ballooned during the 23-year study period, as white families went from a median of about $22,000 in wealth to $100,000 – a gain of $78,000. In the same period, Black household wealth inched up from a base of $2,000 per family to only $5,000. The sweat and toil of an entire generation had netted Black families only $3,000 additional dollars, while white families emerged from the period with a net worth of 100 grand that can be used to send a couple of kids to college, make investments, help out other family members, or contribute to the larger (white) community. The typical Black family has no such options. [The study did not take property ownership into account. If property were included, the disparity would be larger.]

Viewed another way, the median white family was 11 times richer than the median Black family in 1984 ($2,000 vs. $22,000). By 2007, the white household had become 20 times richer than its Black counterpart ($5,000 vs. $100,000).

Any way one measures it, the numbers show African Americans are tumbling out of the nation’s economic orbit, wealth-wise, on a trajectory that can never achieve parity with whites. I repeat: never.

On the campaign trail in 2007, Barack Obama flippantly declared that African Americans had “already come 90 percent of the way” to equality, with only 10 percent more to go. Whatever the future president was thinking, it wasn’t economics. The meter of progress is running backwards on Black America, toward greater inequality and relative poverty. Everything else you’ve heard is propaganda.

The Brandeis study, conducted by the university’s Institute on Assets and Social Policy, showed that upper income Blacks fell even farther behind their white peers than lower income Blacks. During the survey period, higher income Blacks saw their wealth drop from $25,000 to just $18,000, while their white counterparts wealth soared to $240,000.

Black folks have been integrated long enough to know that the white family didn’t get richer by a quarter million dollars because they were smarter than the Black family. Privilege, especially cumulative privilege over generations, works wonders, like compound interest only better. Whites are both collectively privileged and capable of bestowing an endless stream of privileges on each other, while Blacks are deliberately positioned outside of the stream, and are preyed upon as a group by powerful (white) financial forces that profit from the wealth differential.

more ...

The Challenge of Closing Tax Loopholes For Billionaires

by Robert Reich

Sunday, May 23, 2010

Who could be opposed to closing a tax loophole that allows hedge-fund and private equity managers to treat their earnings as capital gains – and pay a rate of only 15 percent rather than the 35 percent applied to ordinary income?

Answer: Some of the nation’s most prominent and wealthiest private asset managers, such as Paul Allen and Henry Kravis, who, along with hordes of lobbyists, are determined to keep the loophole wide open.
 
The House has already tried three times to close it only to have the Senate cave in because of campaign donations from these and other financiers who benefit from it.
 
But the measure will be brought up again in the next few weeks, and this time the result could be different. Few senators want to be overtly seen as favoring Wall Street. And tax revenues are needed to help pay for extensions of popular tax cuts, such as the college tax credit that reduces college costs for tens of thousands of poor and middle class families. Closing this particular loophole would net some $20 billion.
 
It’s not as if these investment fund managers are worth a $20 billion subsidy. Nonetheless they argue that if they have to pay at the normal rate they’ll be discouraged from investing in innovative companies and startups. But if such investments are worthwhile they shouldn’t need to be subsidized. Besides, in the years leading up to the crash of 2008, hedge-fund and private equity fund managers weren’t exactly models of public service. Many speculated in ways that destabilized the whole financial system.

Nor are these fund managers especially deserving, as compared to poor and middle-class families that need a tax break to send their kids to college. Nor are they particularly needy. Last year, the 25 most successful hedge-fund managers earned a billion dollars each. One of them earned 4 billion dollars. (Paul Allen’s personal yacht holds two luxury submarines and a helicopter. Henry Kravis is one of the wealthiest people in the world.)

Several of these private investment fund managers, by the way, have taken a lead in the national drive to cut the federal budget deficit. The senior chairman and co-founder of the Blackstone Group, one of the largest private equity funds, is Peter G. Peterson, who never tires of telling the nation it faces economic ruin if deficits aren’t brought under control. Curiously, I have not heard Peterson advocate closing this tax loophole as one way to further the cause of fiscal responsibility. 

Closing tax loopholes for billionaires may seem like a no-brainer, especially at a time when the nation is cutting back spending on the middle class — slashing budgets that fund child care, public schools, and public universities. Tens of thousands of teachers are getting pink slips.

But you can expect a huge fight.

There is also a moral issue here. Call me old fashioned but I just think it’s wrong that a single hedge fund manager earns a billion dollars, when a billion dollars would pay the salaries of about 20,000 teachers.

Hypocrite Alert: Republican Family Values Conservative, Mark Souder, Admits Bonking Staffer

by John Lawrence

Indiana Republican Congressman Mark Souder has resigned over an affair he was having with part time staffer Tracy Jackson. Ironically, Souder and Jackson made a video touting the virtues of abstinence for those other than conservative, family values Congressmen, I guess.  The Republicans seem to outdo themselves to see who can be the most hypocritical. Not only was he bonking Tracy on the side, he had the nerve to make a video with her recommending abstinence for everybody else. This takes "don't do as I do, do as I say" to new heights or depths as the case may be. Souder is marrried with children.

While Souder goes on and on about the evils of condoms and how bad Democrats are, his mistress, Tracy, fingers her pen probably thinking about what they're going to do as soon as they're off camera. Souder in his owlish way expounds about how abstinence only education prevents teenagers from having sex. I guess it doesn't do much for married Congressmen though. In this sham interview, Souder and Jackson decry methods other than abstinence which they highly recommend for teenage prom goers.

Here's the video:

The Washington Post reported:

Rep. Mark Souder (R-Ind.) has told his Republican colleagues that he will resign from the House following an affair with an aide. "I sinned against God, my wife and my family by having a mutual relationship with a part-time member of my staff," said Souder in a statement. "In the poisonous environment of Washington, D.C., any personal failing is seized upon, often twisted, for political gain. I am resigning rather than to put my family through that painful, drawn-out process... by stepping aside, my mistake cannot be used as a political football in a partisan attempt to undermine the cause for which I have labored all my adult life." One of the causes Souder is talking about is, of course, abstinence education. As Chairman of the Subcommittee on Criminal Justice, Drug Policy and Human Resources when Republicans held the majority in Congress, Souder was a warrior for abstinence-only sex education and a critic of other forms of sex education, and he repeatedly intervened to make sure abstinence advocates were represented -- even to the inclusion [sic] of other experts -- on panels about sexual health. This is an embarrassing moment for the cause Souder spent 16 years advocating for.

What a setback for abstinence only sex education! Souder has set back the cause he's been working for his entire life by light years. When will another champion of abstinence only sex education arise to take his place, to fill his shoes? How will the republic survive without strong abstinence only sex education? How will anybody ever be able to believe anything that Souder advocates again? Just think - 16 years Souder has been advocating abstinence only sex education, and not only can't he be abstinent, he can't  even confine his non-abstinence to just his wife. Just think how she must feel. Maybe he was practising abstinence with her while at the same time bonking his mistress. Oh, how the mind reels and what tangled webs we weave -- especially if you're a self-righteous, hypocritical Republican Congressman!

 

COMPARISON: U.S. vs. EUROPE’S ECONOMIES, TAXES & BENEFITS Part II

by Frank Thomas

Continued from Part I

PART II:  U.S. vs. DUTCH TAXES & BENEFITS

 

AMERICA’S DIVIDED TWO-TIER SOCIETY

 

Part II will detail differences in U.S. vs. Dutch personal income taxes/benefits and societal implications. Corporate tax differences are excluded. Combined U.S. federal/state company tax rates average higher at +-38% vs. OECD’s 30%. (On an “effective” corporate tax rate basis, this difference becomes negligible). Part II will put in proper perspective the conservative repetitive “fairy tale” that Europeans are drowning in taxes and stagnant economies … admittedly, Europe now has its 3 or 4 Californias in the intensive financial care ward.

 

TABLE 1 shows total progressive “effective” tax rates at various household income levels excluding all allowable deductions. A U.S. state income tax rate averaging 5% (net of federal tax credit) is included. The Netherlands has no such added  income tax. The Dutch maximum rate is 52% on incomes over $75,000 (€55,000) vs. U.S. maximum rate of 35% on incomes over $375,000 … which Obama proposes to increase to 39.5% on incomes over $250,000.   

 

TABLE 1 excludes sales/vat taxes, excise and use taxes, property taxes, estate taxes, gift taxes, unemployment, severance  taxes, etc. Despite sharp differences in specific taxes (e.g., fuel tax, property tax, sales and vat taxes) between the two countries, taken as a whole the total tax rate difference from these miscellaneous taxes as a % of income isn´t significant. U.S. state and local taxes, including individual and corporate income taxes,  added ±$700 billion or ±33% to total U.S. federal tax receipts of $2.1 trillion in F/Y2009. Comparable Dutch miscellaneous taxes added about 28% to total tax receipts in 2009. 

 

Note: 1 Euro = $1.35

Table I
	Progressive Tax Rates Up To 65
SCALE I:
Incomes Up To $25,000 Married Filing Jointly	United States	The Netherlands
Income Tax	11.6%	1.8%
Social Security	6.2% (a)	17.9% (b)
Medicare (Exceptional Med./Disability)	1.9%	12.2%
State Income Tax	5.0%	0.0%
GRAND TOTAL	24.7%	31.9%  = +29%
Above 65:		14.0%

 

(a) Plus 6.2% paid by the employer

(b) Also covers May paid vacation allowance of +-$1,200 per couple

 

_________________________________________________________________

SCALE II:
Incomes Up To $45,000	United States			The Netherlands
Income Tax		13.1%		5.2%
Social Security		6.2%		17.9%
Medicare  (Exceptional Med./Disability)		1.9%		12.2%
State Income Tax			5.0%	0.0%
GRAND TOTAL		26.2%		35.3%  = +35%
Above 65:				17.4%

 

_________________________________________________________________

SCALE III:
Incomes Up To $75,000	United States	The Netherlands
Income Tax	14.8%	20%
Social Security	6.2%	0%
Medicare (Exceptional Med./Disability)	1.9%	0%
State Income Tax	5.0%	0%
GRAND TOTAL	27.9%	20% = –28%
Above 65:		20% Lower

_________________________________________________________________

SCALE IV:
Incomes Up To $150,000	United States	The Netherlands
Income Tax	20.0%	35.9%
Social Security	4.5% (a)	0.0%
Medicare (Exceptional Med./Disability)	1.9%	0.0%
State Income Tax	5.0%	0.0%
GRAND TOTAL	31.4%	35.9%  = +14%
Above 65:		35.9%

(a) 6.2% Soc. Security tax is Capped at income of $108,000

NOTE:  Incomes Up To $375,000
--TOTAL Tax @ 39.5% U.S maximum rate on incomes above $250,000	37.9%	45.6% = +20%
--TOTAL Tax @47% Netherlands maximum rate on incomes above $75,000	37.9%	41.6% = +10%

Obama’s proposed increasing of the maximum tax rate back to 39.5% on incomes above $250,000 means the Dutch total tax rate will be 20% higher than American rate on an income of $375,000. The Dutch government may decrease the 52% maximum tax rate to ±47% on incomes above $75,000. If  both changes occur, the Dutch tax rate will be only 10% higher than the American rate on an income of $375,000. Irregardless, a 10-20% tax rate difference is hardly very dramatic.    

 

In brief, total tax rates before allowable deductions for a household couple in the Netherlands vs. the U.S. are:    

 

· 29% higher on incomes up to $25,000  

 

· 35% higher on incomes up to $45,000

 

· 28% LOWER on incomes up to $75,000

 

· 14% higher on incomes up to $150,000

 

· 10-20% higher on incomes up to $375,000 depending on whether U.S. maximum tax rate goes up to 39.5% on incomes over $250,000 and the Dutch maximum rate goes down to at least 47% on incomes above $75,000.

 

Furthermore:

 

· On incomes up to $45,000, over 90% of Dutch household taxes go to Social Security (AOW) and to Exceptional Medical & Disability expenses (AWBZ) i.e., the Dutch Medicare equivalent. NO Dutch AOW (17.9%) and AWBZ (12.2%) taxes are paid on incomes above $45,000, just a 42% wage tax on incomes between $45,000 and $75,000, increasing to 52% on incomes above $75,000.  

 

· Dutch tax rates are a meager 1.8% on incomes up to $25,000  and 9.4% on incomes between $25,000 and $45,000. This explains why the Dutch total tax rate is 28% LOWER than U.S. rate on incomes up to $75,000. Dutch marginal tax rates thus rise more quickly and

progressively to 52% on incomes above $75,000 compared to current U.S. 35% maximum rate on incomes above $375,000. Despite this, the Dutch total tax rate is only 14% higher than the U.S. rate on an income of $150,000!

 

· The Dutch tax  system broadens the tax base substantially on the principles of ability to pay and equitably sharing in society’s progress. And yet total marginal rates for various wage scales are still NOT outrageously higher than U.S. rates … even at quite high income levels.  This becomes increasingly obvious when one compares the benefits one gets with Dutch taxes … benefits that are out-of-pocket expenses for an American household. More on this in a moment.

 

· Medicare’s 1.9% payroll tax is paid out over one’s working lifetime until 65. The Netherlands’ equivalent AWBZ plan with a 12.2% payroll tax is paid out over one’s working lifetime up to a maximum income of $45,000. But here’s the real gigantic difference. Medicare coverage for exceptional medical and disability expenses doesn’t begin until age 65, whereas the AMBZ plan begins from the moment one starts paying into the program!

 

A first central point of above data is that clearly overall tax rates in Europe are higher than in the U.S. … although not as much as demagogues misleadingly proselytize. The European broad-based tax structures like in the Netherlands  also redistribute a lot back to everyone. They are broad-based in taking from the poor-middle classes as well as the rich. Simultaneously, they are generally funding progressive programs: high quality free public education and low-cost university education; universal basic health care that in Holland is 40% of the U.S. annual cost for a family of 4 (see Thomas-Lawrence study of U.S. vs. Dutch health care systems); state-of-the-art mass transit and inner-city transit systems, water, waste and disposal systems; child care and children’s allowances, paid parental leave and sick leave; a government paid-in-May vacation  allowance of   +-$1,200 for a household, support for the arts, etc.   

 

The Dutch are willing to pay for their social-capitalism because they know the supports are an integral part of their shared prosperity and success … in Steven Hill’s words, “a symbiotic balance between workers and their employers, between corporations and communities, and between the ‘the steady state society’ and social system.” In contrast, U.S. public spending on old age care is +-25% less per capita than in Europe while private spending is 2-3 times higher. Why? Because many Americans self-finance their own senior care. In fact, Americans are paying out-of-pocket and extra charges for many things beyond their taxes, i.e., prolonged unemployment, sick leave, parental leave, escalating health care premiums and copays, tuition costs, etc. The Center for Medicare and Medicade found that U.S. households in 2007 paid 31% of total health care expenses out-of-pocket amounting to an average of $2,300 per person. Americans fund out-of-pocket many of their social services at the state and local level, making  federal tax rates lower than other advanced European countries. Also, State and Local taxes are normally flat making them regressive since poorer people spend a higher proportion of their income.  

 

Making matters worse are the precipitous decline in federal and state taxes due to deep recession and state laws constraining tax increases. In 2009, total federal tax receipts of $2.1 trillion were $400 billion less than 2008, or 15% of GDP vs. 18.3% over past decades… the lowest level in the past 50 years! Corporate taxes dropped 50% to a tiny 7% of total taxes, individual taxes dropped 20% to 43% of total taxes, Social Security/Social Insurance taxes rose to 42% of total tax receipts.     

 

The U.S. – Netherlands tax comparison does not reflect US  Employee lost wages from employers paying much higher health insurance premiums … and recovering these costs by treating them as employee benefits replacing wage increases. But Europeans in advanced countries like the Netherlands get these benefits (plus normal wage increases) with hardly any out-of-pocket extras by simply paying their higher taxes.  

 

Success of the European solidarity and sharing culture shows up, for example, in an EU 15 average poverty rate of 5% (4% in the Netherlands) compared to 13% in the U.S. in 2008. The EU success story is also reflected in a 1980-2008 Dutch average unemployment rate of 3.2% vs. 4.1% in the States;  a Dutch average real GDP growth rate of 2.4% (with Consumption averaging 62% of GDP and Savings 10.5%) vs. 2.7% in the U.S. (with  Consumption averaging 71% of GDP and Savings 3% to Zero in 2005). U.S. Savings rates have been near nil due to stagnant wage growth encouraging excessive debt leveraging by lower-middle classes to maintain a declining standard of living … a self-destructing spiral intensified by fraudulent lending practices, floods of casino monies from sale of junk-packaged mortgages (CDOs) by finance institutions, and low interest rates. So family values and security have been severely damaged, hopefully not irrevocably, the past 30 years.

 

Steven Hill quotes Conservative leader of Norway’s Christian Democratic Party, Valgard Hangland:  “Americans like to talk about family values but we have decided to do more than talk.”  In Hill’s words, “It is difficult for the United States to put our money where our rhetoric is when doing so is derided as ‘welfare’ or ‘creeping socialism,’ instead of being seen as support for working families and family values, i.e., ‘workfare’ as in Europe.” The classic ultra-conservative dogma is that Americans are free to try for what they want (i.e., as if Europeans don’t have these freedoms) … to keep government from “mandating” anything like social supports/tax increases/fair commercial practices because we Americans want to have more choice in the free market place . But lack of government support and the inputs of fully participating Unions, Cooperatives, Community & Regional Banks actually limit choice … often quite a bit as the average citizen has little power on his or her own. As one person wisely concluded, “Neutralizing government’s role in society doesn’t really give you more choice as much as it gives the multinational employer more choice and power to limit your choices.”

 

A second central point of above data is the U.S.’s extraordinarily thin tax base compared to that of the Netherlands. This means extending the Bush tax cuts on incomes below $250,000 not only places more pressure on U.S. state and local taxes to make up tax revenue shortfalls but also increases America´s insecure dependence on the top 10% wage earners … further exacerbating “The Divided Two-Tier Society.” For the federal tax code is riddled with complexity and loopholes favoring the wealthy and only the wealthy know how to exploit them to the hilt. No progressive country in Europe, including the Netherlands as shown in my presentation of the Dutch tax system, has such a lopsided heavy taxation dependence on such a relatively few wealth builders.

 

Internal Revenue Service data show clearly that in 2007 the top 10% income class paid 70% of all federal taxes collected and the top 1% class paid more taxes than the bottom 95%! Now some conservatives cleverly, but lyingly, misuse this information to advance a number of self-serving policies like lowering (or at least maintaining current) taxes on the global-connected top 10% income class and increasing taxes on the bottom 50% wage earners.

 

What the ultra conservatives ignore is that when one talks about the top 10% and 1% classes, one must distinguish between WEALTH concentration as opposed to INCOME concentration when making claims of a disproportionate tax contributions. As my quote by former Wall Street economist Michael Hudson stated, the rich are less concerned about income than they are in building relatively tax cheap and/or even tax-free wealth by exploiting the many loopholes in our tax laws. So the same conservatives conveniently forget to mention the correlating disturbing facts that the top 10% own 70% of our nation’s wealth and the top 1% own more of our nation’s wealth than the bottom 95%. The same conservatives conveniently ignore the fact that the bottom 50%, and most in the bottom 80%, have been hammered the past 30 years with stagnant wages, job insecurity, and rising health care costs. A 2007 Internal Revenue Service report shows that a very high 50% of total U.S. taxpayers are in an income category of less than $33,000 (see details of report). A majority are on minimum subsistent wages of $7-8 per hour (versus +$11.00 per hour in the Netherlands). So how can they pay more taxes? As you can see, we have many complex, contra-productive Catch 22s built into our social-economic model.

 

In sharp contrast, in advanced European countries the top 10 % own less than 45% of a nation’s wealth. Dutch household tax scales are an example of European equitable income redistribution. The Dutch focus effectively and fairly on increasing the overall tax base to the benefit of all citizens. This has not hurt dynamic market forces or possibilities to earn attractive incomes. So what’s the answer to the U.S. dilemma? First, we Americans have to come to grips with the hard reality that taxes need to be raised broadly to bring our huge deficits under control. Spending cuts and economic growth will not do the job of bringing deficits down to less than 3% of GDP … nor will extending the Bush tax cuts to families earning less than $250,000.    

 

A more rational approach,difficult for obvious political reasons, would be to broaden the tax base, for example, by limiting the extension of Bush tax cuts to incomes under $100,000 rather than $250,000.  Not going to happen though. Of course, the maximum tax rate must go back to 39.5% for incomes over $250,000 … a must for many reasons but also in light of a 2006 law allowing high income taxpayers to transfer individual retirement accounts into so-called Roth I.R.A.s. Unlike regular I.R.A.s, no tax is due when money is withdrawn from a Roth… another insidious deal for federal tax revenues and deficits if tax rates are higher in coming years. But, as noted in Part I, closing tax loopholes and tax havens, levying taxes on the finance industry’s unproductice, speculative activities, developing a culture of tax compliance rather than tax evasion and avoidance is how the U.S. can and must achieve a much needed increase in declining federal tax revenues.

   

Over the past 35 years, I’ve watched the Dutch multiparty system act very sensibly and realistically in constantly fine-tuning and balancing its social capitalism between the interactions of free market forces and government measures. Given a projected 10 year budget shortfall of +-$38 billion, the Dutch are now discussing eliminating mortgage interest deductions over a 25 year period, reducing a well-paid unemployment benefit from 36 months to possibly 18 months, reducing the number of civil servants, raising minimum health care deductibles from $200 to a maximum of +-$600, possibly lowering the maximum progressive tax rate on personal income from 52% to 47%, etc. The Dutch will ultimately reach a consensus on policy actions while not undermining fundamental cultural values of ability to pay, equitable sharing of the nation´s economic progress and required tax funding in good and bad times.

 

America has got to get equally realistic about a budget cost system – even if cut back substantially, including a bankrupting Defense spending level that exceeds that of the rest of the world – that will not bring deficits down to 3% of GDP  … unless the tax base is broadened and tax revenue generating actions are taken along lines suggested in this paper and along creative lines suggested by others.

 

Summary: 

 

In short, the U.S. economy has become an engine of inequality driven by the profound illusion that GDP growth rate and a thin tax base with low taxes -- especially for the top 10% -- are adequate measures of societal well-being. The advanced countries of Europe, like the Netherlands, are doing just fine not buying blindly into such misconceptions of what constututes a generally healthy, happy society. Europeans have decoupled the icon ideal of infinite economic growth and low taxes from the reality that neither, by far, is the definitive, sustainable answer for quality of life and equitably shared social-economic progress.

 

Frank Thomas

The Netherlands

May 9, 2010

 

To be continued....

PART III CONCLUSION:  PROPOSED BROADENING OF INDIVIDUAL TAX SYSTEM

 

Mortgage Delinquencies, Foreclosures Break Records

by The Associated Press, May 19, 2010

 

The number of homeowners who missed at least one mortgage payment surged to a record in the first quarter of the year, a sign that the foreclosure crisis is far from over.

More than 10 percent of homeowners had missed at least one mortgage payment in the January-March period,  Wednesday. That number was up from 9.5 percent in the fourth quarter of last year and 9.1 percent a year earlier.

Those figures are adjusted for seasonal factors. For example, heating bills and holiday expenses tend to push up mortgage delinquencies near the end of the year. Many of those borrowers become current on their loans again by spring.

Without adjusting for seasonal factors, the delinquency numbers dropped, as they normally do from the winter to spring.

More than 4.6 percent of homeowners were in foreclosure, also a record. But that number, which is not adjusted for seasonal factors, was up only slightly from the end of last year.

Stocks slid Wednesday as investors remain concerned with the European debt crisis. The rising number of mortgages also drew some attention. The Dow Jones industrial average fell more than 160 points in early trading.

Jay Brinkmann, the trade group's chief economist, said the foreclosure crisis appears to have stabilized. Seasonal adjustments may be exaggerating the change from the previous quarter, he added.

"I don't see signs now that it's getting worse, but it's going to take a while," he said. "A bad situation that's not getting worse is still bad."

The number of American homeowners who have missed at least three months of payments or are in foreclosure has surged to around 4.3 million, Brinkmann estimated.

The Obama administration's $75 billion foreclosure prevention program has barely dented the problem. More than 299,000 homeowners had received permanent loan modifications as of last month. That's about 25 percent of the 1.2 million who started the program since its March 2009 launch.

About 277,000 homeowners, or 23 percent of those enrolled, have dropped out during a trial phase that lasts at least three months.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. But homeowners with good credit who took out conventional, fixed-rate loans are now the fastest growing group of foreclosures.

Those borrowers made up nearly 37 percent of new foreclosures in the first quarter of the year, up from 29 percent a year earlier.

The risky subprime adjustable-rate loans that kicked off the foreclosure crisis are making up a smaller share of new foreclosures. They made up 14 percent of new foreclosures in the January-March period, down from 27 percent a year earlier.

Terrorism is Not Just a Problem for US

by John Lawrence

Terrorism is not simply confined to the US as so many self-centered Americans seem to think. Russia, for example, has had far more major terrorist attacks than has the US. With the exception of the 9/11 attacks, the US has fared rather well. Russia has had several attacks on its Metro (subway) system, something the US has never experienced. They have also had a major attack on a school, a theater, a sports stadium, airplanes, passenger trains, government buildings, hospitals and apartment blocks. Terrorism is far more widespread in Russia than in the US. Yet the US acts as if terrorism was only a threat to itself, and all the world's terrorists were dead set on doing harm to the US. The world's victims of terrorism should band together, pool their resources and assets and cooperate to prevent future terrorist attacks.

Luckily, several terrorist attacks have been averted in the US either due to good police work, good intelligence or the ineptness of the terrorists. Still the US devotes huge sums of money pushing a string in Afghanistan on the theory that if we can stop them over there, it will protect the US homeland here. Nothing could be more ridiculous. Terrorists can spring from anywhere and can attack anywhere in the world. So spending billions of dollars to send troops to Afghanistan and elsewhere is just plain foolhardy. Instead the money should be put into real defense instead of fighting offensive wars which are only pissing off potential terrorists even more and making it more - not less - likely that they will perpetrate  terrorist attacks on American soil. Real defense means knowing who is in the US at all times and who is coming and going and where they are coming from or where they are going to. Persons in the US illegally should not be tolerated. Yet, as we know, terrorism can arise from US citizens themselves. That's why good intelligence and good police work are very important.

Here is a list of some of the terrorist attacks in Russia:

March 21, 2010: This week’s terrorist bombings on the Moscow metro killed at least 39 people and injured many more.

September 1-3, 2004:  Armed insurgents seize a school in Beslan, in the southern Russian Republic of North Ossetia, taking some 1,000 adults and children hostage. Russian security forces storm the school two days later. More than 330 people -- half of them children -- die in the resulting violence. Radical Chechen field commander Shamil Basayev takes responsibility for the raid.

 

August 31, 2004:  A female suicide bomber kills nine people outside a Moscow subway station. A 10th person later dies of injuries. Moscow Mayor Yury Luzhkov speaks to reporters the night of the blast: "This was a terrorist act. It was carried out by a woman suicide bomber. There was a large amount of explosives involved. [The bomb was] filled with various bolts and metal objects."

August 31, 2004:  A female suicide bomber kills nine people outside a Moscow subway station. A 10th person later dies of injuries. Moscow Mayor Yury Luzhkov speaks to reporters the night of the blast: "This was a terrorist act. It was carried out by a woman suicide bomber. There was a large amount of explosives involved. [The bomb was] filled with various bolts and metal objects."  

August 24, 2004: Two Russian passenger planes crash almost simultaneously, killing all 90 people on board. Female Chechen suicide bombers are later blamed for the crashes.

February 6, 2004: A suicide bombing kills at least 40 people on a subway train in Moscow. A Chechen rebel group claims responsibility. "There was an explosion in the second [metro] car," a woman who survived the blast said. "For a long time, we couldn't open the doors. Then, finally, the driver opened them, and we started walking. We walked for about 2 kilometers. There was panic and a lot of screaming."

December 9, 2003:  A suicide bomber kills five people near the Kremlin in Moscow. At least 13 people are wounded.

December 5, 2003: Forty  people are killed and more than 100 injured when a bomb explodes on a passenger train traveling between Kislovodsk and Mineralnye Vody in southern Russia.

August 1, 2003:  A suicide bomber driving an explosives-packed truck blows up a military hospital in Mozdok, North Ossetia, bordering Chechnya. The blast kills 50 people.

July 5, 2003: Two female Chechen suicide bombers kill 15 other people when they blow themselves up at an open-air rock festival at Moscow's Tushino airfield.

May 12, 2003:  Two suicide bombers drive a truck full of explosives into a government complex in Znamenskoe, in northern Chechnya, killing 59 people.

October 23-26, 2002:  Armed Chechen militants take 700 people hostage in Moscow's Dubrovka theater. Some 129 hostages and 41 guerrillas are killed when Russian special forces storm the building. Most of the deaths are caused by a gas used by the forces to incapacitate the hostage takers. 

The best strategy for combating terrorism is an international network of intelligence operations combined with truly defensive defense expenditures. Strong border, port and critical infrastructure protection, protection against cyber attacks, a national ID card and other measures will prevent more terrorist attacks than sending American troops into other countries ever will. As a byproduct the problems of illegal immigration and importation of drugs will be solved. For a fraction of the cost of fighting offensive wars the American homeland could be well protected. It's time to wake up and smell the coffee. The Pentagon budget and the Homeland Security budgets should be changed around. More should be devoted to Homeland Security than is devoted to the Pentagon. Terrorism is a tactic used not only by jihadis but by any group or individual who has a grievance and wants to cause havoc, and the US should assume a strictly defensive posture. This will actually cause the diminution of potential terrorist incidents as fewer civilians are killed by US troops abroad, one of the main causes of terrorism in the first place.
 

BP Stands for Bad Petroleum

by Robert Reich

Sunday, May 16, 2010

Saturday the White House warned BP that it expects the oil giant to pay all damages associated with the disastrous oil leak into the Gulf of Mexico, even if the costs exceed the $75 million liability cap under federal law. BP responded Sunday saying its public statements are “absolutely consistent” with the Administration’s request.

When you hear dueling public statements like these, watch your wallets. You can safely assume BP’s lawyers are already at work to ensure that the firm pays not a cent more than $75 million — not to taxpayers bearing cleanup costs, not to consumers whose gas bills will rise, not to businesses along the coasts that will lose a fortune. And BP won’t pay more unless or until there’s a law requiring it to.

BP has been making public statements about its supposed corporate social responsibility for as many years as it’s behaved irresponsibly. It’s the poster child for PR masquerading as CSR.

It was just eight years ago British Petroleum shortened its name to BP and began promoting itself as the environmentally-friendly oil company with a vision that went “Beyond Petroleum” to embrace solar cells and wind power. In a $200 million advertising campaign organized by Olgilvy & Mather, BP transformed its corporate brand insignia from a shield to the more wholesomely natural green, yellow, and white sunburst. BP’s chief executive, Lord John Browne, issued warnings about global warming and said the company had a social responsibility to take action.

Notwithstanding its new image, BP continues to be one of the largest producers of crude oil on the planet. Although it committed itself to devoting $8 billion to alternative fuels over ten years, the sum was tiny compared to BP’s annual profits from oil that have averaged over $20 billion and its annual capital expenditures of over $14 billion.

Nor has the firm distinguished itself by its commitment to the law. Several years before the Gulf oil rig explosion, an explosion at BP’s Texas City plant killed fifteen workers and triggered a $21.3-million fine from safety regulators.

In March 2005, corrosion of BP’s pipes and equipment on the North Slope in Alaska led to a spill of 270,000 gallons of oil, the largest spill ever recorded in that fragile territory. Critics said BP wasn’t spending enough money to prevent such spills. Only in 2006, after it was forced by the U.S. government to inspect all its pipelines with an automated device that crawled through the pipes, did the company discover so much additional corrosion and leakage it had to shut down a sixteen-mile feeder line to the Trans Alaska Pipeline.

In August 2006, Congress demanded BP executives appear in person to be held accountable. At the ensuing hearing, members from both sides of the aisle accused BP executives of crass negligence. Representative Joe Barton (R-Texas), chairman of the oversight committee, excoriated them: “If one of the world’s most successful oil companies can’t do simple basic maintenance needed to keep the Prudhoe Bay field operating safely without interruption, maybe it shouldn’t operate the pipeline.” Barton went on: “I am even more concerned about BP’s corporate culture of seeming indifference to safety and environmental issues. And this comes from a company that prides itself in their ads on protecting the environment. Shame, shame, shame.”

Committee members then grilled the BP executives about why the company had failed for as long as fourteen years to do the sort of internal inspection and maintenance on its pipelines that were performed every two weeks on the Trans-Alaska Pipeline, into which the BP pipelines feed. The BP executives solemnly promised to be more careful in the future.

But neither the members of Congress nor the BP executives mentioned the most pertinent fact: Frequent inspections of the Trans-Alaska Pipeline were required by law but no similar inspections were required on feeder pipelines such as those owned by BP. If the panel was serious about getting BP to change its ways it would have introduced legislation to close this loophole. The panel did not introduce such legislation because the hearings were for show. Barton and his colleagues on both sides of the aisle had pushed many bills favorable to the oil industry and weren’t about to impose any burdens on it.

Ad campaigns about corporate social responsibility are cheap. So are public scoldings by politicians about a corporation’s irresponsibility. Watch not what they say but what they do. The only way BP will pay more than $75 million — and the costs of the spill will easily top that — is if they’re required by law to do so.

CHANCE FOR SOMETHING REALLY NEW AFTER 65 YEARS!

by Frank Thomas

There is a totally new social-political landscape coming to the UK as result of the Cameron-Cleeg Coalition government accord ... a more authentic, mature approach to political policy making. This is something I've been waiting for for 50 years to come to America. And What is that something? That we rid ourselves of the PURITY IDEOLOGICAL political deathtrap game that for so long has completely immobilized good governance in America to the least common denominator .... and Good Luck to all the rest! A governance that puts ideaology ABOVE national interests. A governance that has sold its soul to the MARKET PLACE, divorcing itself from the Constitutional principle of government by, for, and of the people. Since President Reagan said, "government is the problem not the solution," America has descended into a self-perpetuating political DUOPOLY of DO NOTHING for MAINSTREET but EVERYTHING for WALL STREET elites and the job destroying Mega Multinationals ... both systemically sucking on our politicians' bought subservience to their special demands (e.g., tax favors) and nearly oligarchic control of our democratic processes.

Since WWII, England has also watched a dominant two-party system reign in power to such an extent that other political forces have had little chance of taking part in national government. Along come in insecure times, David Cameron, a center conservative and Nick Cleeg, a leftist liberal. Both in their own way find themselves in better harmony with each other than with the ideological purist caricatures in their respective parties. And therein lies the Cameron-Cleeg team's unique potential MAGIC to lead productively in a painful period by listening to the broader spectrum of everyday UK society fed up with being looked down upon by traditional establishment parties .... where politicians play the public in a two-party system operating at its disconnected, hypocritical best. Sound familiar to America's two-party decayed irrelevance, spawning a deep yearning for pragmatic, honest, authentic politics?
  
Both UK leaders have said in Plain English and connecting on an genuine emotional level that makes them more open to what others want .... "AWAY with programmed IDEOLOGY ... and IN with new Ideas, sensible actions and compromises in the interests of NATION FIRST and PARTIES SECOND." Both men have announced three universal values underlying their intended use of power to advance the common good above strict party ideology:  freedom, openness, and taking responsibility. Cameron finds his inspiration from the important reformer, Benjamin Disraeli from whom he gets his keen committment to individualism, regionalism and pragmatism. Disraeli once ironically quoted something I trust Cameron agrees with, "My idea of an agreeable person," said Hugo Bohun in Lothair, is a person who agrees with me."  

Cameron refreshingly is truly taking Disraeli's ironic twist to heart here in his choce of Nick Cleeg .... who is a left of center liberal but, like Cameron, is not a blind ideologist. Their mutual openess to new thinking is evident in the accord reached between the Conservatives and Liberal Christian Democrats. The bank system will be aggressively reformed. There will be a green investment bank. Taxes on lower income workers will be reduced, those on capital will be increased. Salaries of Ministers are likely to be decreased 5%. Excessive Debt and Deficits will be attacked with painful options equitably implemented.There remain sharp differences on European integration and immigration, for example. But in short, the Conservative Tories have come up with a more progressive, balanced policy accord than ever before in their history. Contrast this multifunctional, adaptable brainwave thinking of country before party and inflexible ideology with our empty, antiquated, paralyzed political system Obama's doing his level brilliant best to get working again for ALL Americans.
 
Standing side by side with his Vice Premier this week, Nick Cleeg, Premier Cameron forcefully predicted the new coalition government accord will bring a "seismic change" in UK governance. All true if both leaders do what they say and stay in their positions. Broad consensus governance based on Coalition arrangements is quite normal in the more advanced European countries .... the Netherlands viable multiparty system (5 give and take dominating parties) being a good example.The UK liberals have always been the enemies of conservatives but can now exert a very strong influence on government policy. Will the familiar jealous, destructive in-fighting power habits reincarnate? The bets are even. BUT, as a  liberal conservative who prizes common sense in politiics, I'm very excited and optimistic about Great Britain's chances for something really new. Possibly both leaders' youthfullness - the new government is presided over by people in their forties - will be a natural protection against falling back into old reflexes. That would be just GREAT ... for Everyone!                 

Regards,
Frank Thomas
The Netherlands

Wall St Loves its Derivatives

Lincoln to the Rescue

by Robert Reich

Tuesday, May 11, 2010

Right now, the biggest battle in bank reform is over a provision introduced by Senator Blanche Lincoln of Arkansas that would force the giant Wall Street banks to give up their lucrative derivative trading businesses if they want the government (i.e. taxpayers) to continue insuring their commercial deposits.

The five biggest Wall Street banks have had the derivatives market (derivatives are bets on whether the price of certain assets will rise or fall, bets thereby “derived” from asset prices) almost entirely to themselves. Last year their revenues from derivatives trading totaled a whopping $22.6 billion. Their advantage comes from their large size, plus government insurance of their commercial deposits that allows them to raise money more cheaply than other financial institutions.

Derivatives lie at the point where the basic saving-and-lending function of commercial banking meets the private casino of Wall Street investment banking. You and I subsidize the biggest players in the casino who, precisely because we subsidize them, have grown too big to fail. The Glass-Steagall Act once prevented the casino from using commercial deposits, but since 1999, when Glass-Steagall was repealed, the game has exploded. That’s part of the reason the giants on Wall Street could make wild bets that ended up threatening the entire economy, costing millions of Americans their jobs and savings, and requiring a massive taxpayer-financed bailout.

Lincoln wants to force the banks to put their derivatives into separate entities that aren’t subsidized by you and me. This is just common sense. Her move would also end the big banks’ monopoly over derivatives, thereby reducing their risk to the financial system. It would also cut dramatically into the big banks’ profits.

Obviously, the big banks are apoplectic about Lincoln’s measure and will do almost anything to strip it from the Dodd bill. The banks have 130 registered lobbyists, countless unregistered ones, 40 former banking staffers, and at least one retired senator (Trent Lott) crawling over Capitol Hill, arguing that Lincoln’s provision would be the end of civilization as we know it.

They also seem to have ensnared Paul Volcker. Late last week Volcker opined that commercial banks shouldn’t be barred from dealing in derivatives because derivatives are an important aspect of commercial banking; they hedge (that is, provide insurance against) risks associated with interest rates on loans. It’s an odd argument. If derivatives were as essential to the normal practice of lending as Volcker says, you’d expect every commercial bank to be dealing in them instead of just the five giant Wall Street behemoths.

As to the risk you and I might be left holding the bag again, Volcker says not to worry: His own rule now contained in the Dodd bill, preventing bankers from making bets for their own accounts, would take care of that. But Volcker’s rule would not erode the giant banks’ monopoly over derivatives trading — making them too big to fail. By contrast, Lincoln’s provision, by pushing derivative trading out of commercial banking, would remove the big banks’ artificial advantage, resulting in more competition and a better capitalized derivatives market.

Another argument being disingenuously used by Lincoln’s opponents is her measure would push derivative trading into unregulated shadow markets. That’s nonsense. Derivatives would have to be traded through a central clearinghouse or exchange, and every dealer in derivatives would still have to be registered and regulated by the Commodity Futures Trading Corporation or by the SEC.

So what are Lincoln’s chances? All the big guns are aiming at her. Lobbyists are lined up against her. Republicans and many Dems who want to do the Street’s bidding are eager to get rid of Lincoln’s measure. But she has two things going for her. First is the awkwardness for the White House if the President were to come out explicitly against her. For many weeks the Administration has talked about the importance of being tough on derivatives. The President has even said he’ll veto any bill that doesn’t go far enough regulating them. Now Lincoln is giving the White House a chance to prove its mettle or show itself to be pandering to the Street on one of the biggest reasons the Street almost melted down in the fall of 2008.

The second advantage Lincoln has is her measure passed her committee with so much momentum – including the votes of every Dem on the panel and one Republican – that it’s been included in Dodd’s overall financial reform bill. While it’s always possible for opponents of reform to hide when amendments are voted down, it’s much harder to hide when trying to strip a provision from a bill. Democrats who want to do so will have to join Republican Senators Judd Gregg, Saxby Chambliss, and Bob Corker, who already have introduced an amendment to accomplish this on behalf of their Wall Street patrons. The public will be able to identify which Senate Dems care more about Wall Street’s campaign donations than the public good. 

Volcker has given these Dems, and the White House, some cover. But the public is watching closely. Some cover may not be enough.

MMS Has Given Up Any Pretense to Regulating Oil Industry

From the New York Times:

U.S. Said to Allow Drilling Without Needed Permits

By IAN URBINA

Published: May 13, 2010

WASHINGTON — The federal Minerals Management Service gave permission to BP and dozens of other oil companies to drill in the Gulf of Mexico without first getting required permits from another agency that assesses threats to endangered species — and despite strong warnings from that agency about the impact the drilling was likely to have on the gulf.

Those approvals, federal records show, include one for the well drilled by the Deepwater Horizon rig, which exploded on April 20, killing 11 workers and resulting in thousands of barrels of oil spilling into the gulf each day.

The Minerals Management Service, or M.M.S., also routinely overruled its staff biologists and engineers who raised concerns about the safety and the environmental impact of certain drilling proposals in the gulf and in Alaska, according to a half-dozen current and former agency scientists.

Those scientists said they were also regularly pressured by agency officials to change the findings of their internal studies if they predicted that an accident was likely to occur or if wildlife might be harmed.

Under the Endangered Species Act and the Marine Mammal Protection Act, the Minerals Management Service is required to get permits to allow drilling where it might harm endangered species or marine mammals.

The National Oceanic and Atmospheric Administration, or NOAA, is partly responsible for protecting endangered species and marine mammals. It has said on repeated occasions that drilling in the gulf affects these animals, but the minerals agency since January 2009 has approved at least three huge lease sales, 103 seismic blasting projects and 346 drilling plans. Agency records also show that permission for those projects and plans was granted without getting the permits required under federal law.

“M.M.S. has given up any pretense of regulating the offshore oil industry,” said Kierán Suckling, director of the Center for Biological Diversity, an environmental advocacy group in Tucson, which filed notice of intent to sue the agency over its noncompliance with federal law concerning endangered species. “The agency seems to think its mission is to help the oil industry evade environmental laws.”

Kendra Barkoff, a spokeswoman for the Minerals Management Service, said her agency had full consultations with NOAA about endangered species in the gulf. But she declined to respond to additional questions about whether her agency had obtained the relevant permits.

Federal records indicate that these consultations ended with NOAA instructing the minerals agency that continued drilling in the gulf was harming endangered marine mammals and that the agency needed to get permits to be in compliance with federal law.

Responding to the accusations that agency scientists were being silenced, Ms. Barkoff added, “Under the previous administration, there was a pattern of suppressing science in decisions, and we are working very hard to change the culture and empower scientists in the Department of the Interior.”

On Tuesday, Interior Secretary Ken Salazar announced plans to reorganize the minerals agency to improve its regulatory role by separating safety oversight from the division that collects royalties from oil and gas companies. But that reorganization is not likely to have any bearing on how and whether the agency seeks required permits from other agencies like NOAA.

Criticism of the minerals agency has grown in recent days as more information has emerged about how it handled drilling in the gulf.

In a letter from September 2009, obtained by The New York Times, NOAA accused the minerals agency of a pattern of understating the likelihood and potential consequences of a major spill in the gulf and understating the frequency of spills that have already occurred there.

The letter accuses the agency of highlighting the safety of offshore oil drilling operations while overlooking more recent evidence to the contrary. The data used by the agency to justify its approval of drilling operations in the gulf play down the fact that spills have been increasing and understate the “risks and impacts of accidental spills,” the letter states. NOAA declined several requests for comment.

The accusation that the minerals agency has ignored risks is also being levied by scientists working for the agency.

Managers at the agency have routinely overruled staff scientists whose findings highlight the environmental risks of drilling, according to a half-dozen current or former agency scientists.

The scientists, none of whom wanted to be quoted by name for fear of reprisals by the agency or by those in the industry, said they had repeatedly had their scientific findings changed to indicate no environmental impact or had their calculations of spill risks downgraded.

“You simply are not allowed to conclude that the drilling will have an impact,” said one scientist who has worked for the minerals agency for more than a decade. “If you find the risks of a spill are high or you conclude that a certain species will be affected, your report gets disappeared in a desk drawer and they find another scientist to redo it or they rewrite it for you.”

more...

BP's BFF

What Do Wall St, Mining and Oil Rig Disasters Have in Common: Deregulation

by John Lawrence

Recent disasters on Wall Street are directly attributable to the lax regulations and lax regulatory atmosphere of the regulatory agencies who go one step farther and don't even enforce the limp regulations still on the books. Instead regulators at the SEC spend their days watching porn. Meanwhile at the Minerals Management Service (MMS), instead of regulating the mines and oil rigs, they were having sex and cocaine parties with the employees of corporations they were supposed to be regulating!

Corporations spend millions of dollars on lobbyists whose purpose is to change the laws in order to reduce regulations on corporations. And then regulatory agencies under George W  Bush were staffed by folks who were dedicated to non-regulation as a matter of principle. So what to do with all their free time spent not doing their supposed jobs? Why not party with the very folks you're supposed to be regulating or watch porn?

Norway demands that off shore oil rigs have a device which can remotely shut off oil flow if necessary. Dick Cheney decided that such a device, which would have shut off the flow of oil that is polluting the Gulf, was unnecessary on American oil rigs. The reason was that the device cost $500,000., a pittance compared to oil company profits. The following is from an article in the Wall Street Journal:

The oil well spewing crude into the Gulf of Mexico didn't have a remote-control shut-off switch used in two other major oil-producing nations as last-resort protection against underwater spills. The lack of the device, called an acoustic switch, could amplify concerns over the environmental impact of offshore drilling after the explosion and sinking of the Deepwater Horizon rig last week. The accident has led to one of the largest ever oil spills in U.S. water and the loss of 11 lives. On Wednesday federal investigators said the disaster is now releasing 5,000 barrels of oil a day into the Gulf, up from original estimates of 1,000 barrels a day. U.S. regulators don't mandate use of the remote-control device on offshore rigs, and the Deepwater Horizon, hired by oil giant BP PLC, didn't have one. With the remote control, a crew can attempt to trigger an underwater valve that shuts down the well even if the oil rig itself is damaged or evacuated. ... Nevertheless, regulators in two major oil-producing countries, Norway and Brazil, in effect require them. Norway has had acoustic triggers on almost every offshore rig since 1993. The U.S. considered requiring a remote-controlled shut-off mechanism several years ago, but drilling companies questioned its cost and effectiveness, according to the agency overseeing offshore drilling. The agency, the Interior Department's Minerals Management Service, says it decided the remote device wasn't needed because rigs had other back-up plans to cut off a well. ... Industry critics cite the lack of the remote control as a sign U.S. drilling policy has been too lax. "What we see, going back two decades, is an oil industry that has had way too much sway with federal regulations," said Dan McLaughlin, a spokesman for Democratic Florida Sen. Bill Nelson. "We are seeing our worst nightmare coming true."

In addition to catering to oil corporation demands for lax regulations and limp regulatory enforcement, the US extracts a relative pittance in royalties for US taxpayers requiring only 12.5% of oil company profits compared to 50% in Norway. Norway's Government Pension Fund is entirely funded by royalties from oil. But the US taxpayers receive a paltry sum from oil royalties while oil companies rack up record profits.

(1) A 2007 Government Accounting Office (GAO) report on Gas and Oil Royalties found: "In fiscal year 2006, oil and gas companies received over $77 billion from the sale of oil and gas produced from federal lands and waters, and the Department of the Interior's Minerals Management Service (MMS) reported that these companies paid the federal government about $10 billion in oil and gas royalties. (Royalties are usually about 12.5 % to 16.7% of the final value.) "Based on results of a number of studies, the U.S. federal government receives one of the lowest government takes (percentage of cash flow) in the world. Collectively, the results of five studies presented in 2006 by various private sector entities show that the United States receives a lower government take from the production of oil in the Gulf of Mexico than do states--such as Colorado, Wyoming, Texas, Oklahoma, California, and Louisiana--and many foreign governments." For example: The states above receive royalties of between 51% to 57%; United Kingdom: 52%; Norway: 76%; Australia: 61% and Alaska: 53%. (GAO-07-676R Oil and Gas Royalties, 2007)

The two most profitable US corporations were Exxon Mobil and Chevron making a combined total of $69 billion in 2009. Compared to these profits only about $7.6 billion went to the US Government (er, uh, TAXPAYERS) for oil, gas and coal royalties. US taxpayers are clearly getting the shaft while private corporations get record profits. But then when a disaster occurs as it did on Wall St and as it did in the Massey Energy mining disaster and the disaster in the Gulf, US taxpayers are called upon to spend billions bailing out the corporations or cleaning up the mess. Meanwhile, the oil companies tie up their portion of the expense in court. Recipients of damage claims for the Exxon Valdez disaster had to wait 20 years to collect and by then Exxon had managed to get the damages reduced to practically nothing and some of the claimants had already died. I predict that the same will be true for the disaster in the Gulf. By law (thanks to oil company lobbyists) the liability of the oil companies is only $75 million, and US taxpayers are on the hook for the rest which could mount up to $14 billion by some estimates. So when BP says repeatedly that they will pay all legitimate claims, don't you know that in the back of their spokesman's mind is the specter of prolonged court hearings and that $75 million limit?

With regard to the above referenced GAO report ...

"This report shows that the U.S. has one of the most lenient royalty collection systems in the world and calls into question whether taxpayers are getting a fair return for the resources they own," said Rep. Nick Rahall, D-West Virginia and chairman of the House Natural Resources Committee. Bottom line... The industry buys our oil cheap and often pays us for it by giving some back... And only then when they feel like it. Sweet deal. The information above only scratches the surface of royalty mismanagement and oil industry malfeasance. Given their past record, should we assume the oil industry has only our best interests at heart in the future? One would think the issue of oil and gas royalty underpayment and payment abuse would be good political campaign fodder for Democrats this year but the silence is deafening. (Not so for the Republican enthusiasm for the Drill Here, Drill Now.) John McCain's recent epiphany on offshore drilling, with no stated restrictions, should land him straight in the cross-hairs. Obama, should he decide to push the issue, can show his creds by touting his sponsorship of S.115 The Oil SENSE Act (01/2007). The bill called for the suspension of royalty relief, the repeal of certain provisions of the Energy Policy Act of 2005, and to amend the Internal Revenue Code of 1986 to repeal certain tax incentives for the oil and gas industry. (The bill died in committee.)

FINALLY: Drones to Patrol Border!

Published on Tuesday, May 11, 2010 by the Austin American Statesman (Texas)

Predator Drones to Fly Over Texas-Mexico Border by Fall

by Tim Eaton

After years of political pressure from Texas politicians, U.S. Rep. Henry Cuellar said Monday that he expects the federal government to deliver unmanned aircraft to watch over the border with Mexico by this fall.

If approved, the unmanned aircraft in Texas would add to the federal government's existing border effort, which includes a handful of other unmanned aircraft, 20,000 Border Patrol agents, about 650 miles of border fence and 41 mobile surveillance systems, according to Customs and Border Protection. (Ross D. Franklin/2007 AP)

Cuellar, a Democrat from Laredo, said he has had discussions with top officials from the U.S. Customs and Border Protection's office of air and marine operations, and they agreed to the timetable, subject to Federal Aviation Administration approval to allow the surveillance planes — often referred to in the political vernacular as "Predator drones" — to fly over Texas.

Laura Brown, an FAA spokeswoman, said the administration is "working as quickly as we can on this."

Cuellar said the FAA told him that regulators' main concern has been with Texas' heavy airplane traffic — both private and commercial.

If approved, the unmanned aircraft in Texas would add to the federal government's existing border effort, which includes a handful of other unmanned aircraft, 20,000 Border Patrol agents, about 650 miles of border fence and 41 mobile surveillance systems, according to Customs and Border Protection.

The plane, which is made by General Atomics Aeronautical Systems and officially called a Predator B, is able to spot illegal border activity and send images in real time to border officials.

At that point, Border Patrol agents could be dispatched, according to Customs and Border Protection.

Cuellar — along with Sens. John Cornyn and Kay Bailey Hutchison and Gov. Rick Perry — has been trying to bring the unmanned aircraft to Texas for years.

Cornyn and Perry, both Republicans, have been among the most vocal critics of the regulators' pace.

"Washington needs to quit fiddling while the border region of America burns," said Perry, who has been calling for Predators since 2005.

Also last week, Cornyn said that the FAA's pace "borders on foot-dragging."

Cuellar has refrained from using harsh words directed at the FAA.

Instead, he invited FAA Administrator Randy Babbitt and Alan Bersin, the commissioner of Customs and Border Protection, to his office on May 20 to make sure an agreement can be reached.

"My interest in this is to get this done as quickly as possible," he said.

Cuellar, who leads the House Homeland Security Subcommittee on Border, Maritime and Global Counterterrorism, has asked the FAA to give priority to Texas' request.

Cuellar and Customs and Border Protection officials said a home for a Texas-based Predator already has been identified at Naval Air Station-Corpus Christi.

Kimberly Kasitz, a spokeswoman for General Atomics, said one unmanned aircraft costs $10 million to $12 million.

Discussions in Washington have centered on bringing one Predator to Texas to be deployed along the border with Mexico to fight drug trafficking, human smuggling and violent Mexican drug cartels.

The Texas plane is still under construction, Cuellar said. If it is not ready by the time the FAA approves its flight, then one would be borrowed from another location, Cuellar said. He would not say where because of security concerns.

Places with unmanned aircraft systems in the U.S. include Arizona, which has three; North Dakota, which has two; and Florida, with one.

Unmanned aircraft have grown quickly in popularity in the defense and surveillance sectors, said Peter W. Singer, a senior fellow at the Brookings Institution and the author of "Wired for War: The Robotics Revolution and Conflict in the 21st Century."

Since 2003, the military has acquired about 7,000 unmanned aircraft that are flying surveillance and combat missions in overseas wars, Singer said, and it happened "in a bureaucratic blink of an eye."

And even today, each branch of the military remains eager to obtain more.

"Basically, the Air Force is buying them as fast as they can," Singer said.

Meanwhile, Customs and Border Protection has said it intends to increase unmanned aircraft systems across the country this year, and it expects a complete network of the unmanned planes all along the border by 2015.

Officials boasted about the Predators' effectiveness in a fact sheet published in February 2009. They reported that Predator B planes have flown more than 1,500 hours and contributed to the seizure of more than 15,000 pounds of marijuana and the apprehension of more than 4,000 undocumented people.

But more can be accomplished with the unmanned aircraft, Cuellar said Monday.

Discussions already have taken place about turning the Predator's high-resolution cameras, which Cuellar said could read a label on a bottle of water from 19,000 feet, on to Mexico to track movements of drug cartels.

But there are still a lot of sovereignty issues, Cuellar added, so any advancement of the idea would be up to Mexican government officials.

Additional material from The Associated Press.

© 2010 Statesman

The Greek Bailout

John,

You asked me about the financial horrors of Greece. I never had the slightest doubt Europe would come to the support of Greece and the Euro. Many continental pension funds have invested in Greece. So there were some obvious self-interest motivations besides the real fear other EU lands would be infected by Greece's financial disease. Also, this was a prime test of Europe's founding principles of SOLIDARITY and SHARING. The Netherlands, a small country of 16.5 million, unabashedly came forward with a committment €26 billion ($35 billion) plus €4.8 billion ($6.5 billion) to Greece as part of a total €750 billion ($1 trillion) fund to support the Euro and Greece. The IMF also is a major contributor and will be a leading force in laying down and monitoring very tough reform conditions for Greece.

The Dutch and Germans, among others,  have been almost ruthless in setting down very tough reform pre-conditions Greece must meet before it will receive significant funds. Nevertheless,  it's is still a possibility that Greece culture is in a hopeless condition of enslavement to excessive social handouts and corruption ... much like the incurable cocaine addict. The painful result in this event could well be Greece's dismissal from the EU federation. I don't think this ultra-doom scenario is probable. But we shall see how effective Greece's current leaders are over the next two years to painfully implement changes to get their house in order. They have some breathing space now. Ireland and Hungary are now showing signs of a definite turn-around from financial disaster under severe pressure from the IMF and EU authorities. Greece, however, represents a quite other dimension of Debt chaos, social-welfare addiction, and corruption permeating all levels of it society.
         

I should also add that the EU's tremendous financial facility, besides restoring confidence in the EU financal system and Greece's recovery,  will also offset the greedy financial underworld that has been engineering fears and short selling processes on a grand scale to create panic over the Euro and Greece's financial salvation ....and Portugal's and Spain's salvation. So the money-market speculative thieves can reap fast buck billions, much like John Paulson and Goldman Sachs did in the global CDOs classically esoteric financial ripoff game. 

The daring step-forward dimension the EU has finally taken will be discussed and analyzed for decades. We are witnessing a critical point in Europe's history wherein coming to terms with its own independent destiny by not abandoning its unique social-economic model of the "steady as you go society" where people matter most is crucially at stake. Of course we've witnessed the wavering hesitators and nervous participants in the Greece bailout dilemma like Germany, UK, and France who were inclined to abandon Greece to market forces. But, in the end, Europe's interconnectedness, cohesion and solidarity is showing force of character to rise above this enormous strenous test of wills and committment  to sound unifying principles embodied in the unspoken faith of the founding EU Fathers and alive to this day, "We are all in this life together."

Regards,

Frank Thomas

The Netherlands

 

7 People Arrested After Foreclosure Protest at Stony Ridge Home

May 7th, 2010 12:56 PM

The Wood County sheriff's department removes Keith Sadler from his home on Fremont Pike in Stony Ridge, Ohio, Friday, May 7, 2010. Sadler locked himself in his house for several days before being evicted Friday morning. Sadler had vowed to stay until a moratorium was declared on foreclosures. (AP Photo/The Blade, Dave Zapotosky)

 

Toledo Blade

STONY RIDGE, Ohio - Seven people were arrested during the forced evacuation of a Stony Ridge house early Friday, including the homeowner who spent the week barricaded inside with several protesters in an attempt to resist eviction because of foreclosure.

Those arrested may appear in Perrysburg Municipal Court as early as 1:30 p.m. Friday on misdemeanor charges of obstructing justice and trespassing, Wood County Sheriff Mark Wasylyshyn said.

Many of those arrested are volunteers with the Toledo Foreclosure Defense League and had bound themselves to the homeowner, Keith Sadler, with locked chains, group spokesman Lance Crandall said. He identified those arrested as: Mr. Sadler, 53; Connie Smithengale, 20; Bryer Baumgartner, 19; Nicholas Botek, 23; Jessica Angelov, 20; Daniel Orange, 25; and Johnathan Kutsch, 22.

Authorities broke down the front door of the U.S. 20 home about 6:30 a.m. Friday, Mr. Crandall said. About 30 protesters stood in the pouring rain and chanted "Keith's house" as Mr. Sadler was carried out by his hands and feet and placed into a Wood County sheriff's vehicle just before 8 a.m.

Protesters then moved to the Wood County jail, where those arrested were held early Friday.

Last year, State Bank and Trust Co. of Defiance foreclosed on the house, then bought it at a sheriff’s sale in March for $33,333, court records show. Mr. Sadler was supposed to be out of the house by midnight Monday but said he would not leave his home voluntarily.

Mr. Sadler, who mostly has worked in factories, said he made his mortgage payments for 12 years after buying the house from his father but fell behind last year after he was off work from Dana Corp. for medical reasons.

The defense league involved in the protests with Mr. Sadler wants to see a moratorium on foreclosures and evictions.

Mr. Sadler had lived in the home for 20 years.

John Paulson Earned $3.7 Billion Last Year on One Trade!

by John Lawrence

Hedge Fund manager John Paulson helped to design the Abacus fund for Goldman Sachs and filled it with a bunch of garbage. This fund was then peddled to unwary investors while Paulson shorted it. As a result, when the garbage in the fund went south, the investors lost $1 billion and Paulson's gamble netted him $3.7 billion. But that isn't even the worst of it. Taxpayers who bailed out the system actually paid Paulson the $3.7 billion - as if he needed it. Timothy Geithner's insistence that taxpayers bail out all of Wall Streets gambling casino bets netted Paulson the full amount of his bet, not a penny less. Now don't you think that the taxpayers could have been saved a few billion dollars if Paulson was just given back the amount of money he originally paid to make his bet? He would have been made whole. He would have been as well off as he was before he made the bet. How would that have brought down the system? But using taxpayer money to pay him off under the pretext that not doing so would bring down the system has netted taxpayers a lot of debt.

Now recently when someone fat fingered a trade and the market lost 1000 points in a few minutes the DOW decided to nullify all trades within a certain period. So those that gained big from this hyper frequency program trading and those who lost big were denied in the first case excessive profits and in the latter case excessive losses. Don't you think that the same thing could have been done in the recent financial crisis? But no, with the tax payers on the hook, every bet was paid under dire threat that not doing so would bring down the system. AIG was bailed out in order to pay off Goldman Sachs and John Paulson. The people that engineered this whole debacle should have just been given the money back that was used to place the bet as essentially Wall Street did when the DOW hit a snag.

It seems next to impossible to figure out how much Paulson paid for the credit default swaps (CDOs) he bought from AIG that placed his bet against the Abacus fund. He did give Goldman Sachs some money to set up the fund, and then he gave AIG some money to place his bet. But he basically paid little and did little netting himself huge profits.

So what was in the Abacus fund? CDOs or collateralized debt obligations. This is where mortgages are sliced and diced, mixed up and put back togather in various combinations. It's as if you ordered a pizza with a plain cheese pizza being equivalent to a plain 30 year mortgage. But instead of ordering a plain cheese pizza, you ordered a slice of pepperoni, a slice of sausage and mushroom, two slices of the works and three slices of Hawaiian. Then you told the pizza maker to throw all these pieces of pizza in a box and shake the box vigorously. The jumble inside would then be equivalent to a CDO. Then having done this and having sold off the box of pizza to a variety of customers, you went to a bookie and placed a bet about how many of the pizza consumers would get sick as a result of eating the pizza.

But it gets even worse. If you can control the ingredients in the pizza, you tell the pizza maker to use pepperoni that has been sitting around outside the refrigerator for three days, pineapple that has been sitting in an opened can for a week, olives from a third rate producer and so on. Then you place a bet on how many of the consumers of the pizza would get sick. When you control the ingredients in a product as Paulson did, you have insider knowledge as to how well that product will perform in the marketplace or, in the pizza metaphor, how many people will get sick. And then when your bet pays off and you go to the bookie to collect - in this case AIG - they tell you that they don't have the money to pay you but, not to worry, they will get the money from the government ^i.e. the taxpayers, because, if the government doesn't pay up, the whole system will melt down.

However, I think that what the government should have done is just to have given back the original amount of the bets. No one would have gained and no one would have lost. Everyone would have been made whole. It's just that some wouldn't have reaped huge profits as John Paulson did at taxpayer expense.

Why Local Economies Matter

Published on Monday, May 10, 2010 by Share the World's Resources (STWR)

 

by Anna White

Around the world, there is a growing movement to pull back from the relentless march of corporate globalisation by re-rooting economic and social activities at the community level. From the burgeoning popularity of farmers' markets and food co-ops to the revitalisation of community banking, people are organising themselves to reclaim the economy from large profit-driven corporations and instead build sustainable, local alternatives.

While the term ‘localisation' has never gained popular currency (perhaps because it is so easily misunderstood), it is worth considering a broad definition for this trend towards small-scale, community-oriented businesses. In Localization: A Global Manifesto, Colin Hines defines localisation as "a process which reverses the trend of globalisation by discriminating in favour of the local". It is important to note, however, that this does not mean "walling off the outside world" through nationalistic protectionism (see Micahel Schuman, Going Local: Creating Self Reliant Communities in a Global Age). Nor does it mean creating communal autarky, with self-sufficient groups cutting themselves off from the monetary economy. International trade, travel and cultural exchange would continue, but locally-controlled, diversified economic activity would reorient production and service provision towards meeting the needs of the community first.

Why Localise?

Individuals and organisations who are already working to strengthen their communities and local economies are doing so for a multitude of reasons. This is not an ideologically driven movement that fundamentally rejects the global in favour of the local, nor is it based on one blueprint solution or economic model. Rather, it is an organic process motivated by a number of interrelated factors.

Economic globalisation has gradually increased the power of multinational corporations and ‘too-big-to-fail' banks, not only over the means of production and distribution of goods and services, but also over the entire democratic and social process. In light of the recent financial crisis, where governments spent billions of taxpayer dollars on bailing out the banks that were partly responsible for causing the crisis, the  overbearing influence of the corporate and financial services sector has never been clearer.

In response, people around the world are moving to reclaim local control over the economy through alternative business practices and banking. Campaigns such as Move Your Money aim to revitalise community banking so that finance is redirected towards local needs rather than speculative profits and bonuses. Alternative business structures such as cooperatives and community-supported agriculture also encourage local ownership and production, thereby closing the divide between owners and workers or producers and consumers upon which the corporate model thrives.

A growing awareness of the ecological impacts of a globalised, fossil-fuel dependent economy is also inspiring people to ‘go local'. With the twin spectres of climate change and peak oil looming, people are recognising an increasing need for localised production and distribution in order to build a viable alternative to the current environmentally destructive, export-driven model. Projects such as Transition Towns and Ecovillages are largely motivated by a belief that sustainable living requires resilient, diversified local economies. Many of the strategies adopted by these communities are not new; community gardens and local currency schemes, for example, have long been used to ensure local resilience.

For many people, the motivation to rebuild local economies goes beyond practical concerns about the unstable and unsustainable nature of the globalised economy. It is rooted in a deep dissatisfaction with the lifestyle and values promoted by a system obsessed with efficiency, competition and consumerism. Re-rooting economic activities at a local level offers a way to rebuild the community ties that have been eroded by a tendency towards competitive individualism in society. In the words of David Korten, author of Agenda for a New Economy: From Phantom Wealth to Real Wealth, the broader goal of a localised economy is to shift "its favoured dynamic from competition to cooperation, and its primary purpose from growing the individual financial fortunes of the few to building living community wealth to secure the health and well-being of everyone."

Promoting Small-Scale on a Large-Scale

Currently, the shift towards the local remains a fringe, grassroots process, made up of small-scale initiatives as diverse as the cultures and environments in which they are taking place. As Helena Norberg-Hodge argues in her contribution to The Case against the Global Economy: And For a Turn Toward the Local, for these efforts to translate into a wholesale shift in the mainstream economy, they must be accompanied by policy changes at both the national and international level.

With politicians pandering to the interests of corporations in the never-ending pursuit of economic growth, policy support for local economies remains near to nonexistent. Many government policies, such as ensuring the availability of cheap fuel, liberalising markets, subsidising agribusiness and bailing out the big banks, essentially act as a form of corporate welfare in support of large-scale, profit-driven multinationals at the cost of small-scale community ventures. The same is true at the international level. Agreements under GATS and the World Trade Organisation bar governments from discriminating in favour of the local, all in the name of free trade and the logic of economic competition.

Yet if economies are geared towards meeting local needs first, rather than becoming ever more efficient at producing goods for export-oriented trade on international markets, the logic of competition and ‘comparative advantage' flies out the window. The only question that remains is how to untangle government priorities that currently favour of big business and globalised finance, and to gain political and popular public support for a more diversified global economy geared toward localisation. In order to build a new paradigm for development, one that empowers communities and works within the ecological limits of the planet, the rules of the game need to fundamentally change.

‘Going local' offers a way for people to push for transitional economic alternatives from the ground up, but individuals, communities and civil society must come together to form a powerful political movement demanding that the necessary shift toward local empowerment takes place through national and international policy measures. As multiple and interrelated global crises reveal the socially and environmentally destructive nature of the current globalised economy, the time for such a movement has never been more propitious - an opportunity that we all must make the most of.

Further Resources

Business Alliance for Local Living Economies

Go Local - Yes! Magazine

The E. F. Schumacher Society

Move Your Money

The New Rules Project - Institute for Local Self-Reliance

Transition Culture

This work is licensed under a Creative Commons License

Anna White is the editorial assistant at Share The World's Resources. She can be contacted at anna(at)stwr.org.

After Religion Fizzles, We’re Stuck with Nietzsche

Published on Monday, May 10, 2010 by TruthDig.com

 

by Chris Hedges

It is hard to muster much sympathy over the implosion of the Catholic Church, traditional Protestant denominations or Jewish synagogues. These institutions were passive as the Christian right, which peddles magical thinking and a Jesus-as-warrior philosophy, hijacked the language and iconography of traditional Christianity. They have busied themselves with the boutique activism of the culture wars. They have failed to unequivocally denounce unfettered capitalism, globalization and pre-emptive war. The obsession with personal piety and “How-is-it-with-me?” spirituality that permeates most congregations is undiluted narcissism. And while the Protestant church and reformed Judaism have not replicated the perfidiousness of the Catholic bishops, who protect child-molesting priests, they have little to say in an age when we desperately need moral guidance.

I grew up in the church and graduated from a seminary. It is an institution whose cruelty, inflicted on my father, who was a Presbyterian minister, I know intimately. I do not attend church. The cloying, feel-your-pain language of the average clergy member makes me run for the door. The debates in most churches—whether revolving around homosexuality or biblical interpretation—are a waste of energy. I have no desire to belong to any organization, religious or otherwise, which discriminates, nor will I spend my time trying to convince someone that the raw anti-Semitism in the Gospel of John might not be the word of God. It makes no difference to me if Jesus existed or not. There is no historical evidence that he did. Fairy tales about heaven and hell, angels, miracles, saints, divine intervention and God’s beneficent plan for us are repeatedly mocked in the brutality and indiscriminate killing in war zones, where I witnessed children murdered for sport and psychopathic gangsters elevated to demigods. The Bible works only as metaphor.

The institutional church, when it does speak, mutters pious non-statements that mean nothing. “Given the complexity of factors involved, many of which understandably remain confidential, it is altogether appropriate for members of our armed forces to presume the integrity of our leadership and its judgments, and therefore to carry out their military duties in good conscience,” Archbishop Edwin F. O’Brien, head of the Archdiocese for the Military Services, wrote about the Iraq war. The U.S. Conference of Catholic Bishops, on the eve of the invasion, told believers that Iraqi President Saddam Hussein was a menace, and that reasonable people could disagree about the necessity of using force to overthrow him. It assured those who supported the war that God would not object.

B’nai B’rith supported a congressional resolution to authorize the 2003 attack on Iraq. The Union of American Hebrew Congregations, which represents Reform Judaism, agreed it would back unilateral action, as long as Congress approved and the president sought support from other nations. The National Council of Churches, which represents 36 different faith groups, in a typical bromide, urged President George W. Bush to “do all possible” to avoid war with Iraq and to stop “demonizing adversaries or enemies” with good-versus-evil rhetoric, but, like the other liberal religious institutions, did not condemn the war. 

A Gallup poll in 2006 found that “the more frequently an American attends church, the less likely he or she is to say the war was a mistake.” Given that Jesus was a pacifist, and given that all of us who graduated from seminary rigorously studied Just War doctrine, which was flagrantly violated by the invasion of Iraq, this is a rather startling statistic.

But I cannot rejoice in the collapse of these institutions. We are not going to be saved by faith in reason, science and technology, which the dead zone of oil forming in the Gulf of Mexico and our production of costly and redundant weapons systems illustrate. Frederick Nietzsche’s Übermensch, or “Superman”—our secular religion—is as fantasy-driven as religious magical thinking.

There remain, in spite of the leaders of these institutions, religiously motivated people toiling in the inner city and the slums of the developing world. They remain true to the core religious and moral values ignored by these institutions. The essential teachings of the monotheistic traditions are now lost in the muck of church dogma, hollow creeds and the banal bureaucracy of institutional religion. These teachings helped create the concept of the individual. The belief that we can exist as distinct beings from the tribe, or the crowd, and that we are called on as individuals to make moral decisions that can defy the clamor of the nation is one of the gifts of religious thought. This call for individual responsibility is coupled with the constant injunctions in Islam, Judaism and Christianity for compassion, especially for the weak, the impoverished, the sick and the outcast.

We are rapidly losing the capacity for the moral life. We reject the anxiety of individual responsibility that laid the foundations for the open society. We are enjoined, after all, to love our neighbor, not our tribe. This empowerment of individual conscience was the starting point of the great ethical systems of all civilizations. Those who championed this radical individualism, from Confucius to Socrates to Jesus, fostered not obedience and conformity, but dissent and self-criticism. They initiated the separation of individual responsibility from the demands of the state. They taught that culture and society were not the sole prerogative of the powerful, that freedom and indeed the religious and moral life required us to often oppose and challenge those in authority, even at great personal cost. Immanuel Kant built his ethics upon this radical individualism. And Kant’s injunction to “always recognize that human individuals are ends, and do not use them as mere means” runs in a direct line from the Socratic ideal and the Christian Gospels.

The great religions set free the critical powers of humankind. They broke with the older Greek and Roman traditions that gods and Destiny ruled human fate-a belief that, when challenged by Socrates, saw him condemned to death. They challenged the power of the tribe, the closed society. They offered up the possibility that human beings, although limited by circumstance and human weakness, could shape and give direction to society and their own lives. These religious thinkers were our first ethicists. And it is perhaps not accidental that the current pope, as well as the last one, drove out of the Catholic Church thousands of clergy and religious leaders who embodied these qualities, elevating the dregs to positions of leadership and leaving the pedophiles to run the Sunday schools.

These religious institutions are in irreversible decline. They are ruled by moral and intellectual trolls. They have become arrogant and self-absorbed. Their sins are many. They protected criminals. They pandered to the lowest common denominator and illusions of personal fulfillment and surrendered their moral authority. They did not fight the corporate tyrants who have impoverished us. They refused to denounce a caste of Christian heretics embodied by the Christian right and have, for their cowardice, been usurped by bizarre proto-fascists clutching the Christian cross. They have nothing left to say. And their aging congregants, who are fleeing the church in droves, know it. But don't think the world will be a better place for their demise.

As we devolve into a commodity culture, in which celebrity, power and money reign, the older, dimming values of another era are being replaced. We are becoming objects, consumer products and marketable commodities. We have no intrinsic value. We are obsessed with self-presentation. We must remain youthful. We must achieve notoriety and money or the illusion of it. And it does not matter what we do to get there. Success, as Goldman Sachs illustrates, is its own morality. Other people's humiliation, pain and weakness become the fodder for popular entertainment. Education, building community, honesty, transparency and sharing see contestants disappeared from any reality television show or laughed out of any Wall Street firm.

We live in the age of the "Übermensch who rejects the sentimental tenets of traditional religion. The Übermensch creates his own morality based on human instincts, drive and will. We worship the "will to power" and think we have gone "beyond good and evil." We spurn virtue. We think we have the moral fortitude and wisdom to create our own moral code. The high priests of our new religion run Wall Street, the Pentagon and the corporate state. They flood our airwaves with the tawdry and the salacious. They, too, promise a utopia. They redefine truth, beauty, morality, desire and goodness. And we imbibe their poison as blind followers once imbibed the poison of the medieval church.

Nietzsche had his doubts. He suspected that this new secular faith might prefigure an endless middle-class charade. Nietzsche feared the deadening effects of the constant search for material possessions and personal hedonism. Science and technology might rather bring about a new, distorted character Nietzsche called "the Last Man." The Last Man, Nietzsche feared, would engage in the worst kinds of provincialism, believing he had nothing to learn from history. The Last Man would wallow and revel in his ignorance and quest for personal fulfillment. He would be satisfied with everything that he had done and become, and would seek to become nothing more. He would be intellectually and morally stagnant, incapable of growth, and become part of an easily manipulated herd. The Last Man would mistake cynicism for knowledge.

"The time is coming when man will give birth to no more stars," Nietzsche wrote about the Last Man in the prologue of "Thus Spoke Zarathustra." "Alas! The time of the most contemptible man is coming, the man who can no longer despise himself."

"They are clever and know everything that has ever happened: so there is no end to their mockery." The Last Men indulge in "their little pleasure for the day, and their little pleasure for the night."

The consumer culture, as Nietzsche feared, has turned us into what Chalmers Johnson calls a "consumerist Sparta." The immigrants and the poor, all but invisible to us, work as serfs in this new temple of greed and imperialism. Curtis White in "The Middle Mind" argues that most Americans are aware of the brutality and injustice used to maintain the excesses of their consumer society and empire. He suspects they do not care. They don't want to see what is done in their name. They do not want to look at the rows of flag-draped coffins or the horribly maimed bodies and faces of veterans or the human suffering in the blighted and deserted former manufacturing centers. It is too upsetting. Government and corporate censorship is welcomed and appreciated. It ensures that we remain Last Men. And the death of religious institutions will only cement into place the new secular religion of the Last Man, the one that worships military power, personal advancement, hedonism and greed, the one that justifies our ruthless callousness toward the weak and the poor.

© 2010 TruthDig.com

Chris Hedges writes a regular column for Truthdig.com. Hedges graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times. He is the author of many books, including: War Is A Force That Gives Us Meaning, What Every Person Should Know About War, and American Fascists: The Christian Right and the War on America.  His most recent book is Empire of Illusion: The End of Literacy and the Triumph of Spectacle. 

Congressman Gutierrez and Comprehensive Immigration Reform

by John Lawrence

Illinois Congressman Luis Gutierrez has been on the media recently talking about comprehensive immigration reform. While giving lip service to stronger border protrction, what comprehensive immigration reform seems to mean to Congressman Gutierrez is a comprehensive plan to keep illegal immigrants inside the borders of the US and working at the jobs they now have. Gutierrez will provide these illegal immigrants with a comprehensive plan to keep them here and well employed. He will make them jump through hoops as long as they are not sent back to Mexico. He will make them pay a fine, learn English, make sure they have no criminal background and on and on. Just please don't send them back to Mexico.

What's so bad about being sent back to Mexico? It's not the end of the world. Deportation, which sounds sort of harsh, is just another name for repatriation which sounds a whole lot nicer. In an era of large scale and long term unemployment, illegal immigrants seem to be well employed albeit at low end jobs. Nevertheless, those jobs are jobs American citizens could be doing with the result that government expenditures on unemployment checks would diminish. Nevertheless, while Gutierrez doesn't want any illegal immigrants deported or repatriated, I would favor a case by case approach that would allow some to stay here based on certain criteria while requiring others to go. The fact that illegal immigrants have children born in the US who are American citizens shouldn't in and of itself give the parents the right to stay. If they don't want their family to be broken up, they can take the children with them. They would have the right to come back to the US when they are of legal age. Or they could make arrangements for their children to stay in the US with a legal guardian. What's wrong with that?

Congressman Gutierrez and others promote the myth that the jobs taken by illegal immigrants are jobs Americans don't want to do. Really? If I was long term unemployed, I think I'd take about any job offered to me including fruit picking, meat cutting, construction work or dish washing. I especially would take it if told that, if I didn't, my unemployment benefits would be cut off. Gutierrez wants to perpetuate the myth that only illegal immigrants are capable of doing these menial jobs. But so many college educated people do menial jobs.

Take me, for example. With a BS degree and two Masters Degrees, I am self-employed as a window cleaner and loving it. I didn't need any credentials or licensing or training whatsoever for this job. It's physical work and I learned from experience as I went along. This is not to say that window cleaning requires no talent whatsoever. But mostly what it requires is on the job training. You might say I'm a self taught window cleaner. Many others with college degrees have worked as taxi drivers or waiters and waitresses or cooks or maids or house cleaners. There's absolutely nothing demeaning about these jobs unbless one is demeaned by one's employer. That's why I recommend self-employment to the greatest extent possible. Many former stockbrokers, having seem the error of their ways, are now self-employed as gardeners and landscapers, jobs which a lot of illegals are also employed in.

The idea that menial work in and of itself is degrading is pure hogwash. At a recent windowcleaning convention I noticed the name of one of the companies there was "Unemployed Actors Windowcleaners." Many of the jobs that illegals do are socially necessary work. I feel that I'm contributing more to society as a window cleaner than I was when I worked in the military-industrial complex as an engineer and computer programmer. There I felt I was a parasite helping to make the US a bigger and stronger national security state and consuming resources that could have been better employed making the world a more peaceful and developed place. Mostly the military-industrial complex wastes resources sucking them out of the economy, resources that could be used to repair and improve infrastructure, build schools, hospitals, libraries, public transportation and parks both here and abroad.

The idea that menial work is somehow beneath Americans is absurd. Just as unemployed people should be forced to take menial jobs or lose their unemployment benefits, employers should be forced to hire American citizens or be fined or face jail. The unemployment rate among black youth is 50%, for black men about 20%, for those with no qualifications about 50%, for legal Latino men about 15%. Certain Americans tend to deplore those American citizens who are high school dropouts or who otherwise have no qualifications. How many qualifications do illegal immigrants have who come here to work in the hotel or restaurant or agricultural industries? It's not as if their Mexican college degrees got them ahead. It's time to stop pooh poohing every American citizen who doesn't have a college degree and saying, "Well, if you only went back to school you wouldn't find yourself in such an unemployed situation." For that matter many young Americans with college degrees are also unemployed.

The emphasis insofar as comprehensive immigration reform is concerned should not be, as Congressman Gutierrez wants it to be, on keeping illegals here and keeping them in their jobs. The emphasis should be first and foremost on protecting the border and stopping illegal immigration in the first place. Resources need to be shifted from the fruitless wars in Iraq and Afghanistan and redeployed along the border. R&D budgets need to be shifted towards real defense or Homeland Security. Drones should be patrolling the border, not bombing innocent civilians in Pakistan. The 1000 or so military bases abroad need to be brought home and planted along the border. The Pentagon should be devoted to border protection instead of the military-industrial complex as now constituted. Secondly, the illegals that are already here should be dealt with and this should happen in a humane manner even if many of them need to be repatriated to the countries where they do hold legal citizenship.

The White House Should Stop Pandering to the Street and Support Three Critical Banking Reforms

by Robert Reich

Friday, May 7, 2010

The White House opposes three important financial reforms that have drawn bi-partisan support in the Senate. It should reverse course.
 
1. Require the Fed to disclose the entities it lends to. There’s no reason the public should be kept in the dark about who benefits when the Fed departs from its traditional interest-setting role and chooses to provide credit (or in Fed parlance, “open its discount window”) to particular companies or entities. To the contrary, a well-functioning capital market and a well-functioning democracy depend on full disclosure about who the Fed picks for such special treatment and why.

Senator Bernard Sanders, Independent of Vermont, pushed an amendment requiring that the Fed be subject to a public audit that reveals which specific companies and entities the Fed is supporting with extra loans. The measure drew support on both sides of the aisle, including conservative Republicans like David Vitter of Louisiana. But Sanders’s amendment met stiff opposition from the White House and the Fed. Both argued that it would undermine the Fed’s independence. That’s a red herring.  Fed’s independence is important when it comes to basic decisions about monetary policy and short-term interest rates, but not about which companies and entities get special treatment.
 
Bowing to the pressure, Sanders has agreed to alter his proposal. He says his new amendment would still force the Fed to disclose many of its steps to bail out banks. But why shouldn’t all of the Fed’s special machinations be disclosed? And why limit disclosure only to the banks that the Fed supports and not other firms or entities? Sanders shouldn’t retreat on this.
 
2. Require big banks to spin off their derivative businesses. Derivatives got us into the mess and Wall Street’s biggest banks are still wielding them like giant poker games. That’s because they’re enormously lucrative for the banks. But they’re also dangerous to the economy because bad bets can lead to meltdowns, especially if they’re backed only by flimsy promises to pay up rather than real capital. The credit default swap business continues to be out of control. To this date, no one knows how big it is, where it is, and who has promised what.

Senator Blanche Lincoln, Democrat of Arkansas, has pushed an amendment that would force big banks to spin off most of their derivative businesses — bringing derivatives into the open and insulating them from the kind of proprietary trading that can cause so much havoc. But the Administration thinks Lincoln is going too far and has instructed its allies in the Senate not to go along. Lincoln should stick to her guns.
 
3. Cap the size of the biggest banks. You don’t have to be a rocket scientist to understand that the best way to reduce financial risks that could (and almost did in the fall of 2008) bring down the entire economy is to spread risk-taking over thousands of small banks rather than centralize it in four or five giant ones. The giants already account for a large percentage of the entire GDP. Because traders and investors know they’re too big to fail, these banks have a huge competitive advantage over smaller banks. This advantage will make them even bigger in coming years, and make the economy even more vulnerable to them.

That’s why Senators Sherrod Brown of Ohio and Ted Kaufman of Delaware have proposed breaking up the nation’s biggest banks by imposing caps on the deposits they can hold and put limits on their liabilities. The proposal has drawn support from Republican Senators Tom Coburn (Okla.), John Ensign (Nev.) and Richard Shelby (Ala.).

But the White House has let Senate Dems know it’s against the proposal, and the Senate this past week voted it down, 33-61. Twenty-seven Democrats opposed this common-sense measure. Brown and Kaufman should do everything they can to make sure the public understands what they’re trying to do, and reintroduce their amendment.
 
The White House dismisses all three of these three measures “populist,” as if that adjective is the equivalent of “irresponsible.” But in fact, these amendments are necessary in order to restore trust in our financial system. They would reduce Wall Street’s tendency to take huge risks, pocket the wins, and fob off the losses on the public.

Wall Street’s lobbyists have been fighting these amendments tooth and nail. The Street is willing to accept the Dodd bill that emerged from the Banking Committee, but no more. Goldman Sachs CEO Lloyd Blankfein told Congress last week he is “generally supportive” of the Dodd bill — which should be evidence enough of how weak it really is. The bi-partisan amendments just introduced would give it the backbone it needs. The White House should reverse course and support them. Senate Dems (and Republicans) who want to be remembered for reining in rather than pandering to Wall Street should, too.

The (Almost) Crash of Wall Street

by Robert Reich

Thursday, May 6, 2010

Ninety minutes before the end of the trading day today, the U.S. stock market almost melted down The Dow Jones Industrial Average dropped nearly 1,000 points. The market regained ground before the end, like a giant 747 narrowly averting a crash landing, but the questions of the day are: What happened? And What does it mean?

At this point no one knows why. Some say it was sudden burst of worries about Greece’s debt and the increasing possibility of a default that might cause a run by global investors. Others point to a “trading error.” Giant high-speed computers generate millions of trade based on instructions embedded in computer programs designed to move fast enough to beat everyone else. So when there’s a glitch in one of them it can immediately spread to all the other programs designed to move just as fast. Some say it was an erroneous trade entered by someone at a big Wall Street bank who mistyped an order to sell a large block of stock, and that the big drop in that stock’s price (Procter & Gamble?) triggered “sell” orders across the market.  

Regardless of why it happened, it’s further evidence that the nation’s and the world’s capital markets have become a vast out-of-control casino in which fortunes can be made or lost in an instant — which would be fine except for the fact that most of us have put our life savings there. Pension funds, mutual funds, school endowments — the value of all of this depends on a mechanism that can lose a trillion dollars in minutes without anyone having a clear idea why. So much of the market now depends on computer programs and mathematical models that no one fully understands, so much trading is in the hands of a few people whose fat thumbs or momentary carelessness might sink the economy, so much of global wealth now depends on who can move their money quickest at the slightest provocation — that we are toying with financial disaster every day. The luck or foolishness of a few traders, and inside knowledge and information that some possess and others don’t, combined with ultra high-speed computers, put us all at the whim of a system whose risk is way out of proportion to any public benefits.

The financial reforms being considered on Capitol Hill are steps in the right direction. But the “systemic risk” now embedded in our capital markets is higher than ever, and will require far greater understanding and vigilance than now being considered.

Apple Isn’t the Problem. Wall Street’s Big Banks are the Problem.

by Robert Reich

Tuesday, May 4, 2010

Why is the Federal Trade Commission threatening Apple with a possible lawsuit for abusing its economic power, but not even raising an eyebrow about the huge and growing economic (and political) muscle of JP Morgan Chase or any of the other four remaining giant banks on Wall Street?

Our future well being depends more on people like Steve Jobs who invent real products that can improve our lives, than it does on people like Jamie Dimon who invent financial products that do little other than threaten our economy.

Apple’s supposed sin was to tell software developers that if they want to make apps for iPhones and iPads they have to use Apple programming tools. No more outside tools (like Adobe’s Flash format) that can run on rival devices like Google’s Android phones and RIM’s BlackBerrys.

What’s wrong with that? Apple says it’s necessary to maintain quality. If consumers disagree they can buy platforms elsewhere. Apple was the world’s #3 smartphone supplier in 2009, with 16.2 percent of worldwide market share. RIM was #2, with 18.8 percent. Google isn’t exactly a wallflower. These and other firms are innovating like mad, as are tens of thousands of independent developers. If Apple’s decision reduces the number of future apps that can run on its products, Apple will suffer and presumably change its mind.

On the other hand, the four largest U.S. financial institutions are so big and the rest of the economy so dependent on them that if one of them makes a bad decision it can take us all down. Between them they hold more than $7 trillion in assets, over half the size of the entire U.S. economy.

So why is the FTC nosing around Apple and not around Wall Street? Because the Federal Trade Commission Act allows the agency to stop “unfair methods of competition” almost anywhere in the economy except in the financial sector. Banks are explicitly excluded.

Another reason for financial reform.

And how are we doing on that front? Senate Dems and Republicans have just agreed to jettison a $50 billion fund in the financial reform bill that would have been used to wind down operations of a failing bank. Republicans had created a smokescreen by alleging that the fund could be used for more bailouts. They don’t want the public to see the real problem – that the biggest banks are so big that if one or two gets into trouble, the Fed or the Federal Deposit Insurance Company will almost certainly have to bail them out in order to protect the financial system. And this implicit guarantee allows them to make even riskier bets that generate even bigger profits – enabling them to grow even larger.

The only way to make sure no bank is too big to fail is to ensure no bank is too big. The biggest banks should be broken up. Senators Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del) have introduced an amendment that would do exactly that. And a growing number of House members are getting ready to do the same.

Hands off Apple. But cut the big banks down to size

The Rebirth of Regulation

by Robert Reich

Monday, May 3, 2010

What do oil giant BP, the mining company Massey Energy, and Goldman Sachs have in common? They’re all big firms involved in massive plunder. BP’s oil spill is already one of the biggest and most damaging in American history. Massey’s mine disaster, claiming the lives of 29 miners, is one of the worst in recent history. Goldman’s alleged fraud is but a part of the largest financial meltdown in 75 years.

All three of these companies are also publicly-held, which means that much of the financial costs of these failures will be passed on to their shareholders, many of whom are already watching their stock prices plummet. Prominently among those shareholders are pension funds and mutual funds held by people like you and me.

That may seem fair. After all, shareholders benefitted when BP made big profits extracting oil without paying attention to a possible blowout, when Massey Energy got fat earnings from its careless coal mining operations, and when Goldman Sachs did wonderously well for its own stock holders by allegedly defrauding others. In fact, it was pressure from their shareholders seeking the highest possible returns — and their executives, whose pay is linked to the firms’ share performance — that led all three companies to cut whatever corners they could cut in pursuit of profits.

But profits aren’t everything, which is why we have regulations that are supposed to be enforced. So a key question in each of these instances is: Where were the regulators?

Why didn’t the Department of Interior’s Minerals Management Service make sure offshore oil rigs have backup systems to prevent blowouts? One clue: You may remember MMS’s wild drinking parties exposed during the Bush era.

Where was the Mine Safety and Health Administration before the Upper Big Branch mine exploded? MSHA says it fined the company for a whole string of violations, but the law didn’t allow fines high enough to deter the company. Which raises the next question: Given Massey’s record, why didn’t the Bush-era MSHA seek to change the law and increase the penalties?

Why didn’t the Securities and Exchange Commission spot fraud on the Street when it was happening? Well, as we all now know, the Bush SEC was asleep at the wheel.

But don’t blame it all on George W. For thirty years, deregulation has been all the rage in Washington. Even where regulations exist, Congress has set such low penalties that disregarding the regulations and risking fines has been treated by firms as a cost of doing business. And for years, enforcement budgets have been slashed, with the result that there are rarely enough inspectors to do the job. The assumption has been markets know best, and when they don’t civil lawsuits and government prosecutions will deter wrongdoing.

Wrong.

When shareholders demand the highest returns possible and executive pay is linked to stock performance, many companies will do whatever necessary to squeeze out added profits. And that will spell disaster – giant oil spills, terrible coal-mine disasters, and Wall Street meltdowns – unless the nation has tough regulations backed up by significant penalties, including jail terms for executives found guilty of recklessness, and vigilant enforcement.

After thirty years of deregulation, it’s time for the rebirth of regulation: Not heavy-handed and unncessarily costly regulation, but regulation that’s up to the task of protecting the public from companies and executives that will do almost anything to make a buck.

Death Toll: Natural disasters 29 (and Counting), Man Made Disasters 36, Terrorists 0

by John Lawrence

With the proliferation of natural disasters like the recent Nashville, Tennesee, floods and man made disasters like the oil rig explosion and the West Virginia mine explosion taking a far greater toll on American lives than terrorism, maybe it's a good idea to reevaluate our priorities. Natural disasters are far more likely to account for more casualties going forward than terrorism is, and we should be prepared for them instead of considering each one some kind of rare event or Act of God that no one could have anticipated or predicted. Massive snowstorms and rainstorms which produce massive flooding are becoming normal events due, no doubt, to global warming. Global warming results in more moisture in the atmosphere. In fact water vapor in the global atmosphere has increased about 5% over the 20th century and 4% since 1970. Monster snow storms like Snowmageddon and Snowpocalypse which hit Philadelphia and Baltimore this winter are caused by excess moisture in the air due to global warming. Although global temperatures have increased they are still cold enough to produce snow and ice storms. 

There are also an increased number and size of tornadoes like the one that hit Yazoo City, Mississippi, on April 24 that left 10 people dead. Disaster preparedness needs to be put on a par with anti-terrorism measures because natural disasters are causing far more deaths and destruction of property. And after each disaster, the Federal government has to step in and provide relief. That means that the taxpayers are on the hook for increasing amounts of money which is only borrowed and added to the national debt because not enough is budgeted for these increasingly more common events. President Obama announced after the oil rig disaster that British Petroleum would pay the full amount for the cleanup which is expected to reach $10 billion, but subsequently it has been pointed out that, because of a loophole in the law, actually BP is only on the hook for $75 million and guess who bears the rest of the cost? The US government aka the taxpayers. No wonder national deficits are increasing. While record amounts go to the military industrial complex each year, far too little is budgeted for the events that actually take the worst toll on American lives - natural and man made disasters. While record precipitation is bad for areas prone to flooding, it actually has produced something beneficial for California - large snow packs in the Sierra Mountains from which emanates California's water supply.

As far as man made disasters are concerned, most of them are caused by deregulation. Stricter regulatory standards might have prevented both the mine disaster in the Upper Big Branch mine and the oil rig disaster. Both companies fought off stricter safety standards which would have cost them more money to implement. Massey Energy had a panoply of violations which it managed to evade paying any penalties for or correcting do to loopholes in the law which allowed them to continue violating as long as they challenged them in court. British Petroleum lobbied against systems which might have provided a more fail safe shut off of the gushing oil. Now they will undoubtedly get out of paying for it due to another loophole in the law no doubt placed there by oil company lobbyists.

The Department of Homeland Security, which is responsible for both terrorism and natural disasters, has to have its budget beefed up while at the same time decreasing the military budget. There needs to be a realignment between the US' actual needs for protection and its imagined needs. As natural disasters take an increasing toll, the monetary cost (hundreds of millions in property damage from the Nashville floods alone) needs to take prority over military spending. The cost of cleaning up natural disasters cannot just simply continue to be added to the defict and the national debt. BP will probably tie up their portion of the responsibility for the oil rig disaster in court with the result being that taxpayers will foot most of the bill. Exxon Mobil tied up the Exxon Valdez disaster in Prince William Sound and over 20 years later has not paid the full amount for the aftermath which was court ordered. Exxon Mobil has dragged its feet in paying the costs of damages to local fishermen while making record profits for itself. The original amount of punitive damages to be paid to the fishermen was $5 billion. That amount was reduced to 4 billion, raised back up to $4.5 billion, then cut to $2.5 billion, then further reduced to $507 million. A Supreme Court ruling is expected soon on whether Exxon should pay interest on this payment after 20 years of waiting. BP will likely use the courts to leave taxpayers holding the bag for the spillage in the Gulf especially since we have belatedly found out that the law limiting their liability is on their side.

Meanwhile, Exxon Mobil made record profits in 2007 ($40.61 billion) and 2008 ($45.2 billion) as it continued to shortchange Alaskan fishermen. It also paid no US taxes in 2008.

Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS: Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas. Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005.”

So US corporations (and no doubt BP will follow suit) continue to make record profits while dumping any losses on US taxpayers just as Wall Street bankers did. While other countries such as Norway tax the profits on oil drilling 50% thereby generating profit for the national treasury, the US foolishly just gives away the oil leases so that all profits go to the corporations while the majority of the losses are paid by US taxpayers. No wonder the US has an immense national debt! And global warming produced natural disasters (unbudgeted for) will only continue to get worse adding even more. While the Times Square bomber didn't manage to kill a single person and was caught immediately thanks to excellent police work by the FBI and others not to mention citizen vigilance, which helped to prevent an event which could have produced a number of casualties, the casualties and property damage due to excessive precipitation and high winds continues to mount. Do we have our priorities straight when we continue to allocate billions to the military-industrial complex and paltry amounts to Homeland Security? Homeland Security in addition to being responsible for terrorism and natual disasters is also reponsible for protecting our borders against illegal immigration. Although illegal immigration continues to take its toll on American society, relatively paltry amounts are allocated to it while fantasy wars of aggression continue to be fought abroad. And the cost of supporting over 1000 military bases on foreign soil continues to mount.

The Homeland Security budget for 2010 is $55 billion while the miltary budget is about $1 trillion - orders of magnitude greater. US budget priorities are totally out of whack. While good intelligence and police work has done much to protect US citizens from terrorist attacks, the wars in Iraq and Afghanistan have only increased their liklihood due to killing of civilians and stoking the fires of resentment towards the US who are considered to be foreign invaders. Protection against terrorist attacks which have killed very few US citizens and caused very little property damage compared to natural disasters primarilyshould consist of defensive not an offensive measures. The Times Square bomber was caught in part due to a fingerprint database. His finger prints matched those left on the Nissan Pathfinder. A national ID card including links to a fingerprint database would do more to prevent terrorism than the combined efforts of the Army, Navy, Marines and Air Force because terrorists are just as likely to be American citizens as foreign citizens. And it would identify people in the country illegally at the same time. A national database of student visa holders would have prevented the 9/11 attacks since a lot of them had overstayed their student visas. It can be shown categorically that defensive measures can and will prevent future attacks at a fraction  of the cost of military adventurism which is only increasing their liklihood.

But the real wild card here - and something which can bankrupt the US unless it's figured into the annual budget - is preparedness for natural disasters. Increased moisture in the atmosphere caused by global warming will continue to produce massive rainstorms, snowstorms, hurricanes and tornadoes, increased casualties and billions of dollars of property damage, much of which will be borne privately by American citizens who will become destitute in the process. As if the recession in and of itself weren't enough to devastate the middle class! The US hasn't even recovered from Hurricane Katrina 5 years ago! The US can expect to be devastated by ongoing natural disasters. In order to prevent a fiscal disaster as well we have to budget and plan for them.

COMPARISON: U.S. vs. EUROPE’S ECONOMIES, TAXES & BENEFITS, Part 1

AMERICA’S DIVIDED TWO-TIER SOCIETY

 

by Frank Thomas, the Netherlands

 

American pundits and politicians of a doctrinaire conservative mindset enjoy stirring the public’s fears and prejudices with their fabrications about “Socialist Europe’s”astronomically high taxes and resultant stagnant economic and job development. Steven Hill’s exhaustive truth-seeking study of the social-economic/tax-benefit differences between America and the more advanced European countries debunks these mythical misrepresentations. Drawing on over 30 years of living and working for international Dutch firms, here are some  personal review reflections on European vs. American social-economic ways.

 

PART I: Social-Economic Disparities

 

Since WWII,  Europe has been nourishing an entirely different social-capitalism I would sum up as follows:

 

Europe long ago embraced the humanistic ethic that “WE” the Community in equitable balance with “I” the Individual where people matter most offers the best hope for productive, innovative interchange and broad-based social-economic advancement. European nations recognize their societal interdependence and need for prudent, strong, supportive social-nets balancing with free market forces. This attitude has led to a culturally deep communitarian contract of Solidarity and Sharing … a social capitalism that constantly refines the mix of free market mechanisms and government intervention for bettering the common good … a social capitalism that dismisses the selfish EGO centric  capitalistic paradigm of ‘survival-of-the-fittest and growth at any cost’  as obsolete paradigms destroying the essence of democratic consensus-building, fair play, and broad sharing of risks in a world of increased uncertainty.       

 

For decades, European multiparty proportional representation founded on an    inclusion of all qualified parties has been a powerful democratic force for engaging people in political debate and free-market ideas. In a give-and-take process of consensus building, issues are debated, reconstructed, agreed and voted on thereby determining “bottom-up” the social capitalist model for support institutions and tax-benefit structures desired and needed by individuals and families. Hence, government’s role in any advanced country’s social market economy has not been THRUST upon citizens against their freewill … as so many members of the U.S. conservative community deceitfully preach to the uninformed and gullible.

 

Contrast this to our government’s two-party, mind-numbing paralysis in responding to lower-middle-class needs amidst systemic economic instability and a huge wealth disparity. Europe’s multiparty democracies are responding with more ideas, fairness, and equality in the struggle for a decent living standard and shared prosperity for all … “the steady state society” as Steven Hill so well puts it … where the conservative right does not automatically and idiotically hyperventilate against prudently managed, social-support systems and equitable wealth distribution … and related policies and programs Europeans know act as economic stabilizers in bad times, improve the quality of life for middle classes and the poor, and have not resulted in loss of property rights, liberty or degree of European individual and family self-determination lyingly, almost religiously proclaimed by America’s ideologically programmed conservatives. 

 

In Truman’s and Eisenhower’s time and into the 60s, America progressed harmoniously with a melding of Edmund Burke and  Alexander Hamilton’s conservative individualistic ideals that also recognized government’s role in countering the passions of men who will override the ethical dictates of shared humanity, reason, and justice in pursuit of greedy self-aggrandizement –  balanced Burkian-Hamiltonian values Europe ironically has long ago institutionalized as common-place today. The emphasis on compromise for the common good was alive and well in Truman’s and Eisenhower’s time. Anyone earning above $200,000 was taxed at a progressive rate of 93%. Corporations also paid a higher percentage of the total federal tax burden then than now. And yet GDP growth rates were in a healthy +4% range and were thus not negatively affected by higher taxes on corporations or the wealthy. And the middle-class prospered in a way never seen since.     

 

But a “ME FIRST” capitalist panacea of privatize, financialize, and disindustrialize took over in the 80s. An extreme reverse redistribution of income and wealth is the result, as more and more Americans are slowly, painfully waking up to. Today, the top 10% wealth class owns 70% of all U.S. personal wealth – compared to 44% in Germany … and the top 1% wealth class in America own more than the bottom 95%! (from my own and Steven Hill’s studies). The top 10% reinvest proceeds from selling their stocks, bonds, real estate, and businesses into purchasing more assets and exotic financial trading instruments around the world – adding little if anything to the U.S. production and job generation base. And the top 10% often recycle their gains with largely tax-free income from previous transactions.     

 

In other words, the top 10% wealth builders keep on accumulating and trading relatively tax-free while 80% of American households are trapped in an increasingly tense, financial survival lifestyle. So is our evolving oligarchical democracy, i.e., “A Divided Two-Tier Society,” ruthlessly testing the explosively dangerous boundary lines of class polarization and destabilization.  We have adopted an economy and tax-avoidance  morass that promotes speculative, leveraged financial assets over growth in industrial production .    

 

Monopolies and multinationals, like the top 10% wealth class, resort to creative tax avoidance  by means of non-transparent  transfer-pricing accounting and offshore tax haven techniques that minimize and even eliminate reported taxable income. Little wonder corporate income tax revenues are a miniscule 10-12% of total federal tax revenues today. Recent government studies show thousands of firms paying no taxes! Then there’s the endless takeover and acquisition projects – high-leveraged financed by low-grade (junk) bonds with gigantic interest and other acquisition writeoff deductions leading to neglible reported taxable income. This obsessive corporate tax-avoidance culture multiplies as corporate investments and income earned therefrom by step 1 manipulated tax-avoidance wizardry, can also often be tax-sheltered in a step 2 phase, and then a step 3 phase, etc.    

 

Complex tax-avoidance options have been crippling U.S. tax generation systems for some time. Result? Total federal tax revenues are declining from a historical average of 18% of GDP to a recent low of 15% … while Defense, Social-Security and Medicare spending has been expanding  at 3 times the annual inflation rate. This dynamic is clearly not sustainable.    

 

Fast-big-bucks scams by the deregulated  financialization of our society has  brought less inclination to invest in new means of production, new products and enterprises. Instead, tax laws make debt leveraging more profitable by marketing innovatively complex, non-transparent  financial products and  ignoring risks to the entire financial system and general public – an approach contributing NOTHING to internal production, innovation or industrial job-generating prosperity at grass roots America. Just the opposite!  The level of worker exploitation has risen dramatically as evidenced by fact the real median hourly wage rate of private, non-agricultural workers in 2006 was the same as in 1967 – despite an enormous growth in wealth and productivity over the same period.

 

In 2000-07, workers’ median hourly wages rose -0.1% while productivity grew 2.2%. So the lower and middle classes are victims of a predator economic system in TWO ways: firstly, by multinational firms permanently eliminating jobs and threat of same to currently employed via outsourcing, automation, robotisizing, and secondly, by decades of stagnant worker wage growth in the race to the bottom that is economically marginalizing more and more of the middle class.

 

The economic squeeze comes in many forms. The financial superstructure  dominating our economy accelerates unproductive Debt to finance the deficits and bailouts emanating from endemically risky, if not patently corrupt,

investment adventures at the hands of global financial conglomerates. Then Saint Mainstreet Taxpayer is forced to come in and socialize losses from Wall Street’s destructive monopoly-finance-capitalism of casino-leveraged investments … and having the opportunity now flush with cash of promoting ever more devious forms of rewarding themselves while exploiting the masses, directly and indirectly.   

 

Michael Hudson, a former Wall Street economist, described the sordid social-economic state of a democracy encouraging speculation and relatively tax-free wealth accumulation by the few:  “The U.S. tax system favors speculative gains and absentee ownership. Ironic as it may sound, really wealthy people prefer not to make  any income at all. They prefer to focus on total returns, which they take in the form of capital gains. This is why hedge fund billionaires pay a much lower tax than their secretaries. Real estate is still our largest sector – most of its market price consisting of the land’s site value – rather than industry and other means of production. Given the existing loopholes, I would prefer not to tax corporate profits or even income at all, if the government could tax the free lunch of economic rent at its source … (economic rent includes income extracted without playing a necessary role in production).

 

The discussion of WHAT to tax therefore should take precedence over how highly to tax the scant reported income that wealthy people are obliged to declare from the FIRE sectors – finance, real estate, and insurance … a realistic discussion can’t begin until people define just what progressive taxation means. It has to start with defining some kinds of income and investment as more economically productive than other. This would end tax subsidies for debt leveraging and financial speculatioon.”  AMEN to that!

 

In this regard, a “financial transactions tax” or “FTT” as UK is implementing – urged by Thom Hartmann, John Lawrence and others for some time – on all stock and bond trades is a step in the right direction. So is the International Monetary Fund’s recent provocative idea of  a “Financial Activities Tax” or “FAT.” This is a tax on extraordinary financial trading profits … like the billion dollar profit earned by the hedge fund manager who cooperated with Goldman Sachs in packaging his fund’s mortgages into CDOs for promotion to investors by Goldman while latter concealed the obvious junk nature of the mortgages and then went short on them. Taxes to assure ‘fair trade’ as opposed to unlimited free trade (and to temper U.S. job destruction by multinationals) are another revenue option.   

 

Republicans and Democrats have done little to correct systemic tax avoidance by special tax privileges and obscene low-taxed wealth accumulation by financial product gimmickry … i.e., Junk Economics.  We all know the core cause  of our governmental laissez-faire dysfunctions is the lobbyist purchase of our body politic’s loyalty to powerful interests – the financial sector being the biggest contributor. This ‘democratic cancer’ has long reached epidemic proportions with special interest groups collectively infusing millions into recurring political campaigns by candidates of both parties. Lobbyists – many of whom are influence-for-hire ex-Congressmen – and their bailed-out, bonus happy clients have ipso facto supplanted our representative constitutional democracy “of,  by, and  for the people.”    

 

An incestuous, hidden  power center of money pandering people buying the allegiances of elected and to-be-elected political representatives contrasts disgracefully with the Dutch political system … where corporations and wealthy individuals can contribute a maximum of +-$7,000 to a party and never directly to a political candidate! Until fundamental 180 degree reforms from top to bottom are made in influence funding of the U.S. political process and in a tax system that rewards financial capital rather than tangible industrial capital, all other reforms now under discussion will ultimately be of token sustainable value and long-term effectiveness.    

 

Part II  explores the conservative right’s propaganda that Europe’s  social capitalism entails exorbitant taxes fostering stagnant growth, innovation, and persistently high unemployment rates – complete INANITY, of course,  promulgated by some well-known U.S. multi-millionaire media demagogues and sham news punchline pundits.     

To illustrate the disparities, Part II will examine the essential details of the true differences between U.S. vs. Dutch income taxes and benefits. Out of this analysis, quite another reality emerges of the conservative tale of Europeans  drowning in government taxes.

 

Part II: U.S. vs. Dutch Taxes & Benefits

 

To be continued…

 

How to Halve Unemployment Rate: Replace Illegal Workers by US Citizens

by John Lawrence

In 2005, illegal migrants accounted for about 5% of the civilian labor force, or 7.2 million workers out of a labor force of 148 million. Today the official unemployment rate is around 10% although the unofficial unemployment rate is much higher. The unemployment rate for black youth is around 50%, and for high school drop-outs, homeless and ex-felons approaches 100%. As of January 2010, 6.3 million people were among the long term unemployed, those out of work for 6 months or longer. What to do? With 15 million Americans out of work, half that number could be put back to work replacing illegal immigrants.

Approximately 19% of illegal workers were employed in construction jobs, 15% in production, installation and repair, and 4% in farming. The Pew report also shows that illegal immigrants comprise 24% of all workers in farming, 17% in cleaning, 14% in construction and 12% in food preparation. Within those categories, unauthorized migrants tend to be concentrated in specific jobs: They represent 36% of all insulation workers, 29% of all roofers and drywall installers, and 27% of all butchers and other food-processing workers.

They tend to be concentrated in the hotel, restaurant, agricultural, construction and child care industries. They make our beds, pick our fruit, cut and pack factory produced meat, mow our lawns and tend our children. There's no reason that unemployed Americans couldn't be doing these jobs. In fact employers hiring illegals could be given a choice - replace illegals with US citizens or go to jail. Let them figure out how to do it. If Mexicans can migrate from Jalisco or Chihuahua, Americans can migrate from Chicago to the San Joaquin Valley. And the very segment of the population that has the highest unemployment rate - those with low job skills - are the ones most appropriate to replace illegal immigrant labor which is also mainly taking low skilled jobs.

About 24 percent of immigrants use some form of public assistance compared to 15 percent of native U.S. households. So they are a drag on the public sector in addition to taking jobs that US citizens could be doing. And not all of them have come here to work. In 2006 28% of prisoners in federal prisons were illegal aliens, according to the United States Justice Department. The notion that illegals are simply doing the jobs that Americans don't want to do is a myth. Illegals are concentrated in a few states like California, Arizona and Texas. In other states legal US citizens are doing the same jobs. And it's also a myth that, if US citizens did the same jobs, prices would go up. Studies have shown that there would be an insignificant increase in prices.

One of the stupidest contradictions is that, in an era of high unemployment, businesses can't seem to get enough illegal immigrant labor. What's up with that? US citizens begging for jobs. Jobs go begging for illegal immigrant labor? Immigration reform should put a stop to it and facilitate the hiring of US citizens who are low skilled and having a hard time finding employment. Increasingly they are becoming homeless. A program called the "Transition from Illegal to Legal Labor" Act could be part of a comprehensive approach to immigration reform. And legal Hispanic US citizens make up a large segment of the unemployed. You'd think that they would be the first to get in line behind immigration reform that would give them jobs and send illegal Hispanics packing.

While Obama and most liberals seem to place high value on formal education and college degrees, most of the jobs that illegals perform require neither, and most of the American citizens in desperate need of employment have neither. They need to be provided for and put back to work. The recidivist rate for ex-felons would go down if they could only find jobs when they get out which most of them can't so a life of crime seems to be the only alternative. For many inner city black and Latino youth that seems to be the case also. Gangs and drug dealing offer a greater chance at the American dream than honest labor. These segments of the population need to be given a chance to do an honest day's work for at least minimum wage. Right now businesses that hire illegals are paying them less than minimum wage and, of course, they have no workplace protections or rights whatsoever.

So immigration reform could kill two birds with one stone - lowering high unemployment and getting rid of illegals in low skilled jobs. They would not have the incentive to come to the US illegally if they couldn't get jobs. And if there were still jobs available after replacing illegal labor with legal labor, Mexicans could be brought in legally under a bracero program. This would also save their lives, many of which have been lost navigating the deserts and swimming the American canal. The egregious contradiction between high employment for non-US citizens and high unemployment for US citizens is a ridiculous situation that makes the US a laughing stock in the eyes of the world. Empire decline is caused by a failure to adjust appropriately to changing conditions.

 

CEO Lloyd Blankfein in Role of Goldman Apologist

by John Lawrence

Goldman CEO Lloyd Blankfein was on Fareed Zakaria GPS Sunday in an attempt to exonerate Goldman from any wrongdoiing during the recent financial crisis. According to Blankfein, Goldman was little more than an innocent bystander to the crisis. Goldman was just a simple little "market maker," not a major player duping people out of their money. In Blankfein's view, Goldman just simply set up deals where those interested in going long were introduced to those interested in going short. They were just a broker, in other words, (or a bookie) who brought these parties together. Yes, Goldman structured deals at the request of its clients, but these deals were freely entered into by professsional, sophisticated investors who knew what they were doing. There were those who sought risk in the market and there were those who sought to hedge their risks. Surely, Goldman is not the bad guy that it has been portrayed to be by the media.

Yes, ..., er uh Mr. Blankfein, you don't think that Goldman had anything to do with selling toxic securities that your research operations surely told you were bad investments? You don't think that you palmed off on investors certain securities, and then Goldman bet against those securoities? Oh no, says Mr. Blankfein. Any security could have risen or fallen at any particular time. Even when a security's value was dropping like a rock there were those who were willing to bet that all of a sudden it would start rising again. Goldman was simply the middle man. So uh, Mr. Goldman, you don't think that you had any responsibility to tell these idiots that certain investments were bad investments? Oh no, these investments could regain value at any time and that's what their investors were betting on. There were people who sought risk in the market, they hungered for risk, and who was Goldman to tell them that they shouldn't satiate that hunger?

So, Mr. Blankfein, your role is simply that of a gambling casino in which all parties know the odds, and some, being mature adults and of sound mind, are willing to take on a lot of risk in order to make a potential killing although the most likely scenario is that they will probably lose their shirts and others are just looking to hedge their bets. Yeah, that's it. So when prominent hedge fund manager John  Paulson came to you with his design for a portfolio which he subsequently shorted and ultimately made $3.7 billion dollars, you obligingly set up the Abacus fund, and those investors who invested in that portfolio, who subsequently lost $1 billion fully well knew what they were doing? They knew Mr. Paulson had designed it. They knew Mr. Paulson then shorted it. They knew it was junk. Well, uhhh.

Did Mr. Blankfein relish the prospect of the markets being reined in so that supposedly professional, institutional investors would be protected in future from their own idiocy and propensity to gamble? No, not if it represented a lost revenue opportunity for Goldman. In other words financial reform shouldn't result in any diminished opportunities for Goldman to make money any more than a gambling casino should protect its customers from losing all their money playing blackjack.

But who are these institutional investors. Well, pension funds, municipalities, state governments, foreign governments. You mean to tell me, Mr. Blankfein, that pension fund managers are gambling with the money that's supposed to be there to pay former employees' pensions? Well, yes, it's not up to Goldman to tell investors, even those responsible for the health and welfare of pensioners who count on their monthly pension check, what to do. It's not up to Goldman to protect professional, institutional, sophisticated investors from their own stupidity or inability to size up the value of a potential investment.

And does Mr. Blankfein have any concern about the millions of ordinary people who lost their houses and their jobs because of all of Goldman's dealings while Mr. Blankfein himself made $68 million in 2007 as the market melted down? Well, here Mr. Blankfein launched into an elaborate personal history that centered on his growing up in public housing, his father being unemployed and then later working nights at the Post Office and how insecure all this made him feel. Did this show any empathy for the millions of people who were hurt in the financial crisis? Of course not. It only showed Mr. Blankfein's enormous empathy for his own personal plight and that of his family. Not a word about anyone that was suffering from the meltdown of the current financial crisis in which people lost homes, jobs, marriages due to Wall Street shenanigans. I guess Mr. Blankfein is suggesting that they all go to work for the Post Office like his father did and work their way up to Mr. Blankfein's position. They too could, from humble beginnings, aspire to make $68 million a year.

The problem here, of course, is that Goldman is not simply an innocent market maker. Goldman is also a participant in the market and as such is looking out primarily for Goldman. You don't suppose that there is a little advertising going on telling clients that they should buy something that Goldman knew was not in their client's best interests? But, caveat emptor! Well, that goes on all the time in the capitalist marketplace. People advertise products that they know are not in their customers' best interests, but it's not their responsibility to protect their customers from making foolish decisions. Their only responsibility is to maximize their own profits.

And Goldman after all is an insider. They have many more resources at their disposal than does the average institutional investor. They have quants, PhDs in mathematics, who analyze everything. They are able to hypertrade, they have the fastest computers and can execute deals in microseconds. They can think many chess moves ahead. In short they have access to much more information and the smartest brains in order to insure that Goldman always comes out on the long end of the stick. Goldman knows more than you do; Goldman is in it to make money. And if you lose money because you're not as smart as Goldman, then that's simply part of the game, a game played fair and square according to Goldman. In short if you can't stand the heat, you better get out of the kitchen. Pension funds better fire poorly performing managers and hire someone else. However, I don't think that any city or state can afford to pay their pension fund manager as much as Goldman pays their "talent." So just as a casino is set up to make money for itself and the occasional lucky gambler, Goldman is set up to make money for itself and, if pension funds end up on the wrong side of a bet, that's tough luck. Goldman wins, you lose - fair and square; it's not Goldman's fault.

Mr Blankfein is attempting to rehabilitate Goldman's reputation with the general public, something it didn't have to worry about until recently because it never had to deal with the general public, only with institutional investors and the very rich. Since Mr. Goldman admits that Goldman's business is a confidence game, he now realizes that instead of just paying lobbyists, politicians' campaign funds and quants, he now has to be concerned that some of the public angst does not bleed over into the class of rich investors and pension fund managers. It just doesn't look good that Goldman set up a deal that it then peddled to investors but shorted itself. It appears that Goldman bet against securities that it was telling its investors were good investments. Even though the investors, supposedly, had access to all the analyists' information regarding the deal, it still seems that Goldman rigged the deal in such a way that they made money knowing in all probablility that its investors would lose money. It's a little like selling a house with a faulty wiring system and then taking out a fire insurance policy on the house or taking out a life insurance policy on an employee who smokes 6 packs a day.

Perhaps Goldman should start advertising on Meet the Press or Face the Nation or Fareed Zakaria GPS like Exxon Mobil, Chevron and Boeing do. You know, feel good advertisements. These other advertisers are not really trying to sell products; some of them like Goldman don't have commercial outlets or store fronts either. But they want the general good will of the public, just like Goldman does now. And it would guarantee that none of these shows or networks would be too critical of Goldman Sachs going forward.

European Capitalism Superior to American Capitalism?

How Europe Avoided an Economic Crisis that is Anywhere Near as Bad as Ours

By Richard Clark (about the author)  

Published by OpEdNews.com, May 1, 2010 at 08:16:21

What follows is a synopsis of an article by Steven Hill that recently appeared in The Nation -- http://www.thenation.com/doc/20100510/hill. That article was adapted from Hill's eyeopening recently published book, Europe's Promise: Why the European Way Is the Best Hope in an Insecure Age. (http://www.europespromise.org/).

Contrary to what rightwing American critics would have us believe, Europe has the largest economy in the world, producing nearly a third of the world's GDP. Indeed, its economy is almost as large as those of the United States and China combined. Europe has more Fortune 500 companies than the United States and China put together, and Europe had a higher per capita growth rate from 1998 to 2008 than the United States. Long denigrated by US pundits as the land of high unemployment, the EU currently even has a slightly lower unemployment rate than the United States. Indeed, the World Economic Forum in 2008-09 ranked Denmark, Sweden, Finland, Germany and the Netherlands among the top ten most competitive economies in the world. They are also ranked at or near the top of most lists for quality of life, health care and social benefits. That's not a coincidence, since the participation of workers on all corporate boards of directors allows for both economic vibrancy and more egalitarian social policy. And while the United States also ranks high in competitiveness, it is near the bottom among most-developed countries in health care, social benefits and quality of life.

Sweden, Germany and other European countries are proof that you can have it all -- but only if you have the right institutions to facilitate both a powerful economic engine and the supportive institutions and benefits to harness that engine and keep employees and families healthy and productive. These distinctly European advances may be the most important innovations in the world economy since the invention of the modern corporation, since they encourage free enterprise combined with economic democracy and worker consultation that does not unduly burden entrepreneurship and commerce. The advances allow businesses to be both competitive and socially responsible.

In effect, Europe has reinvented the corporation. Yet the latest critiques of capitalism by leading authors like Naomi Klein, Noam Chomsky and the producers of the popular film The Corporation tend to view all corporations and all capitalisms as the same. American progressives, while searching for effective responses to globalization, appear to be mostly unaware of these intriguing European inventions. Movements to revoke the charters of offensive corporations, while having gut-level appeal, have failed to recognize that European corporations are fundamentally different animals from their "disaster capitalism" US counterparts.

Now, a year and a half after an economic earthquake shook the world, new economic models are beginning to find traction in America. Alternatives to Wall Street capitalism, the epicenter of the temblor, are suddenly getting a new hearing in the United States, whether it's Paul Volcker calling for reinstatement of Glass-Steagall regulation of the banking sector, the United Steelworkers announcing an alliance with the Mondragon cooperatives in Spain to develop manufacturing cooperatives in the United States, or Cleveland-based efforts to establish worker-owned co-ops in distressed communities [see Alperovitz, Howard and Williamson, "The Cleveland Model," March 1, in The Nation].

If Americans want to learn about cooperatives, Europe is a great place to start.Those co-ops produce an estimated 12% of the GDP of the European Union and involve, directly or indirectly, at least 60% of the population. Besides the Mondragon co-ops in Spain, in which 256 companies employ 100,000 people in industry, retail, finance and education, there's also Coop Italia, which operates the largest supermarket chain in Italy, employing 56,000 with more than 6 million members; housing co-ops like Poland's TUW; and the Co-operative Group in Britain, which is the world's largest consumer-owned business, with 4.5 million members.

In Europe, practices unfamiliar to Americans, such as co-determination, supervisory boards and works councils, have been crucial in helping to harness capitalism's tremendous wealth-creating capacity so that its prosperity is broadly shared.

Co-determination has several features, one of which allows workers to elect representatives to corporate boards of directors known as supervisory boards. Supervisory boards then oversee company managers, who handle day-to-day operations. In Germany, the world's second-largest exporter and fourth-largest national economy, fully half of the boards of directors of the largest corporations -- Siemens, BMW, Daimler, Deutsche Telekom and others -- are elected by workers. In Sweden, one-third of a company's directors are worker-elected. To understand the significance of this, imagine if Wal-Mart were legally required to allow its workers to elect a third to half of its board, who would then oversee the CEO. Imagine how much that would change Wal-Mart's behavior toward its workers and supply chain. It's hard for Americans even to conceive of such a notion; indeed, when I ask Americans at my lectures how many of them have heard of worker-elected supervisory boards, usually no hands go up. Yet most European nations employ some version of this as a regular feature of their economy.

Co-determination means that elected worker directors should sit side by side as equal decision-makers with stockholder representatives, supervising management, is a little-known yet unprecedented extension of democratic principle into the corporate sphere.

Research shows that employee representation on corporate supervisory boards, contrary to fears that it would cause tension or render decision-making too cumbersome, has actually fostered cooperation between management and workers. This, in turn, has benefited the businesses as well as the workers. Workers have input, even into important decisions, so companies are less plagued by labor strife and internal schisms. And workers are well compensated, with high salaries and the most generous social support systems in the world.

One study of Swedish businesses found that two-thirds of executives viewed co-determination as "very" or "rather" positive, because it contributed to a positive climate, made board decisions "deeply rooted among the employees" and facilitated implementation of "tough decisions." Eight of ten chairmen were satisfied with the arrangement and felt it was not important to reduce worker representation. An EU directive establishing a continent-wide framework for board-level employee representation went into effect in October 2004, firmly rooting supervisory boards in Europe's economic culture.

The other pillar of co-determination is known as works councils, which are just what the name implies -- elected councils at businesses, through which employees gain significant input into working conditions. Works councils, which are separate from labor unions but often populated by trade unionists, have real clout. They enjoy veto power over certain management decisions pertaining to treatment of employees, such as redeployment and dismissal. They also have "co-decision rights" to meet with management to discuss the firm's finances, work and holiday schedules, work organization and other procedures. In addition, they benefit from "consultation rights" in planning the introduction of new technologies and in mergers and layoffs, as well as in obtaining information useful in contract negotiations, such as profit and wage data. In some nations, including Germany, Sweden and France, works councils have acquired even more rights and greater influence.

German law stipulates that factory-wide workers' assemblies must be held at least four times a year, at which a management representative must report on the plant and the business. The head of the works council also reports, and workers use these assemblies to promote their views and, if necessary, criticize company decisions in front of management.

In 1994 the EU issued a pioneering directive on works councils, stipulating that every multinational with at least 1,000 workers, and at least 150 workers in two or more EU nations, must negotiate agreements with works councils. Other nations have supplemented that directive by requiring councils in every workplace. Studies by Princeton's Jonas Pontusson and others have concluded that works councils contribute to efficiency by improving communication, which in turn improves the quality of decisions and legitimizes decisions in the eyes of workers. The studies also found that works councils are associated with lower absenteeism, more worker training, better handling of grievances and smoother implementation of health and safety standards. It turns out that when workers are given a degree of consultation, it makes them more satisfied and more productive.

In Germany works councils and supervisory boards can take substantial credit for the fact that, while the US unemployment rate has more than doubled during this economic crisis, Germany's has barely increased. That's because Chancellor Angela Merkel was heavily influenced by works councils and labor unions, and by the culture of consultation in general, to adopt a policy called Kurzarbeit, or "short-time work," in which, instead of laying off millions, employees agreed to spread the pain by working shorter weeks. Most of the lost wages have been made up from a special fund squirreled away during more prosperous times. As a result, more Germans have money in their pockets, and communities and households haven't been decimated by layoffs like they have been in the United States. (Despite the advantages, when Larry Summers, one of Barack Obama's closest economic advisers, was asked why the president didn't pursue short-time work to stem the economic bleeding, he dismissed the idea, saying the White House wanted to create new jobs, not preserve old ones.) But of course there's absolutely no reason why we couldn't do both!

Co-determination has proved crucial to Europe's economic success and its broadly distributed wealth. The practical effect of co-determination is that corporate managers and executives must confer extensively with employees and unions about a range of issues, even about the future direction of the company. Co-determination reflects European "socialized capitalism," with its communitarian values, long-term strategic vision and emphasis on manufacturing, much the way huge executive bonuses, quarterly earnings and a bloated financial sector reflect America's Wall Street capitalism. Socialized capitalism has both produced and benefited from the culture of consultation, which has also contributed to the creation of cooperatives and resulted in a vibrant small-business sector that produces two-thirds of European jobs, compared with only half of US jobs.

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Let's follow the European example

If Arizona Got It Wrong, the US Can Learn From This and Get It Right!

by John Lawrence

There is much blather these days about Arizona's new immigration law. According to some accounts it is practically turning Arizona into a police state where any Latino can be stopped, questioned and demanded to "show his papers." Add to this the many hazards of driving while black and being strip searched while Muslim and you have a veritable stew of unwelcome intrusions into the private lives of, well, just about everybody. All of a sudden there is a grave concern over civil rights.

But the concern for civil rights has to be balanced with a concern for public safety. Illegal immigration is inevitably tied in with the drug wars on the border and gang violence in the inner cities, not to mention the unfairness to legal immigrants and the violation of US laws. Terrorism is inevitably tied to the Muslim religion since they have been the primary source of it including the 9/11 fly-in at the World Trade Center. Does this make every Latino a drug runner and every Muslim a terrorist? Of course not. Any more than it makes every black male a pimp. Remember one of the biggest terrorist acts on US soil was the bombing of the Oklahoma Federal building by Timothy McVeigh, a white European descended American citizen. However, I would venture to say that the preponderance of illegal immigrants are Hispanic, the preponderance of terrorists are Muslims and the preponderance of convicted criminals are black. I hope this doen't make me a racist. It's just facing facts.

So as long as the police abide by acceptable procedures, I have no problem with their IDing people in the normal course of their duties. Of course, proper ID should be issued to everyone. That's the state's and the country's responsibility. And there should be guidelines for the police about the conditions under which they can stop anyone. Why shouldn't they be the same as the conditions under which they can stop someone suspected of criminal behaviour? I don't hear anyone complaining that the apprehension of criminals is turning Arizona or the US into a police state. With proper guidelines citizens need not fear that they are losing their civil rights or that Arizona or the US is becoming a police state.

We can no longer afford the luxury of having people in the US walking around without proper ID. That went out the window with the advent of terrorism. If there had been proper checking on the expiration of student visas and those who had overstayed them, 9/11 would never have happened. Also some citizen vigilence regarding flight lessons by non-citizens who weren't interested in learning how to land planes wouldn't have represented government intrusion into people's civil rights in my opinion. Under certain conditions everyone should be willing and able to show ID. Every time the police stop someone now, they demand ID and run it through their computer to do a criminal background check. Why would it be any more onerous to the person who has been stopped presumably under routine and reasonable guidelines to have his background checked for citizenship at the same time? "Show me your papers" can be replaced by "Show me your ID" as long as the state or country provides one and doesn't make people haul their birth certificate around. And checking everyone's ID for citizenship eliminates profiling. You don't want a national ID card? Then haul your birth certificate if you feel that's preferable. And remember Timothy McVeigh was apprehended at a routine traffic stop.

It's high time for the US to have a counterfeit-proof national ID card. You have to balance the problems caused by criminals, terrorists and yes, illegals, with everyone's civil rights, and this balance has to be manifested in an intelligent way, but the increased threats from these quarters demand it. It can be done in such a way as to minimize inconveniences and intrusions to law abiding, legal citizens, non-citizens in the country legally, and non-terrorists, but in an age where crime, terrorism and illegal entry into the US are threats to the welfare of average citizens, precautionary measures need to be taken. 

Homeland Security in all its aspects should be stepped up, and military adventurism abroad should be stepped down. As the "Defense" budget is reduced (actually it's the military industrial fantasy defense budget), the budget for Homeland Security should be increased. Border and port protection should predominate over military adventurism abroad. Defensive procedures should take the place of offensive wars on foreign soil. Intelligence operations should be the main line of defense against domestic and foreign enemies. Intelligence operations have detected and foiled numerous attempts at terrorism on American soil and abroad.

Terorists, unfortunately, are just as likely to emanate from American as foreign soil. They are just as likely to be American citizens as non-citizens. For all these reasons, a national ID card is entirely appropriate. But as the government goes about its business of protecting average, law abiding Americans, it is just as important that it not be overbearing in the process. Efforts at protecting the American people should not infringe on the civil rights of the American people or cause them undue inconvenience. We are already inconvenienced to an extent by the airport check-in procedure and security checks at public events. Most Americans accept this as necessary and reasonable for their protection. They also should accept other reasonable procedures to weed out criminals, terrorists and illegal immigrants. Legal immigration should proceed and be expedited under reasonable guidelines and procedures while at the same time stopping illegal immigration in its tracks.

Some Emininently Sensible Suggestions About Immigration

Pitting Worker Against Worker

Posted on Apr 30, 2010 by Alternet

AP / Bob Bird

By Moshe Adler

Editor’s note: In this May Day special feature, economist Moshe Adler argues that the answer to our immigration, labor and broader economic problems is more immigration and more welfare for all.

All that is wrong with our immigration and labor policies—for the two cannot be separated—is on full display in New York City, where it plays out every day in the city’s small grocery stores. Virtually all of the workers in these stores are undocumented Latin American immigrants. Yet in the adjacent supermarkets, the same jobs are held by American-born workers of all colors. The usual excuse that these are jobs that “Americans won’t do” obviously doesn’t apply. What is the explanation then?

In 2002, then-New York state Attorney General Eliot Spitzer discovered the answer: The small grocery stores pay their workers about half the minimum wage. And what did he do about it? Not much. In exchange for a promise from the grocery store owners not to do it again, he forgave them for their past wage theft. What Spitzer did not do was hire workers to enforce the minimum wage law. (This would have required tax money, and he had his eye on the governorship.) Instead, Spitzer devised a plan by which the merchants would pay for the enforcement themselves. Nothing came of it. Eight years later, the workers in these small grocery stores are still overwhelmingly undocumented immigrants and there is little doubt that their employers continue to steal their wages.

Do illegal immigrants depress the wages of other workers? Of course they do. Supermarket owners will refuse to pay much higher wages than the wages that their competitors pay. Yet the law is not enforced, either against the illegal immigrants, although they swell the ranks of those who seek employment, or against the employers, even though they hire these immigrants at illegally low wages. What is a worker to do?

The academic literature about whether immigration depresses wages is contradictory; some studies find that it does, while others find it does not. But all of these studies suffer from the same methodological problem, which is that interpreting them requires broad assumptions that may not actually hold. These assumptions are significant enough that each camp can continue to dismiss the other. When I present these studies to those of my students who are union construction workers, they laugh them off. They have no use for complex mathematical models when they can drag anybody to construction sites that employ illegal immigrants at low wages—and they know firsthand that this puts direct downward pressure on their own wages. This is what employers tell them. “You are too expensive,” they hear all too often.

Once we admit there is a problem, must we back draconian, Arizona-like measures against illegal immigrants? On the contrary. If illegal immigrants did not need to fear discovery, the small grocers would not be able to pay them illegally low wages. But legalizing immigrants would not end the problem that immigration creates for underpaid workers, because immigration changes the makeup of the work force to the disadvantage of workers with low levels of education in particular.

Immigration does not have any effect on the share of workers with college degrees, regardless of the level of degree. The percentage of workers with a bachelor degree, for instance, is 22 percent among U.S.-born workers, but it is also the same 22 percent in the entire work force, which includes immigrants (both legal and illegal). The percentage of workers without a high school diploma, however, is 6 percent among U.S.-born workers, and 9 percent in the entire work force. This is an increase of 50 percent in the share of workers with low levels of education, an increase that certainly has an effect on wages.

Of course, more workers means greater demand for goods and services and, therefore, more jobs, but here is where balance matters. If the growth in the labor force is weighed against one group, that group will suffer. When the additional workers are paid low wages, the negative effect is larger, because the economic stimulus that poor workers generate is small. In 1950, a worker without a high school degree earned 60 percent of the pay of a worker with a college degree. By 2000, the wage of the worker without a high school degree decreased to just 8 percent. There is no doubt that globalization and the loss of manufacturing jobs had a lot to do with this deterioration, but there is also no doubt that immigration—which is the flip side of globalization—was also a contributing factor.

How can we deal with the imbalance that immigration creates? One way would be to open our immigration doors even wider in order to increase the share of immigrants with high levels of education, and to permit immigrants who are professionals to practice their professions. Many of us have had a taxi driver who was a doctor or an engineer in the old country. With more immigration of the highly educated, the relative position of workers with low levels of education will improve. 

Another way would be to enforce the existing labor laws in order to prevent employers from playing immigrants against citizens, and to add government programs that address the problems that immigration creates for underpaid workers, regardless of whether they are immigrants or not. American workers who walk every day into coal mines put the lie to employers’ claim that there are jobs “Americans won’t do.” But workers must be able to support themselves and their families. The minimum wage law should be enforced—and the minimum wage raised—in order to turn all the jobs that currently only destitute immigrants are willing to do into jobs that can support families.

But the problems that immigration creates can and should also be addressed directly. An example of how to do this is provided by Israel, because there the problem of immigration is even larger than it is in the United States. In the U.S., 39 percent of the population growth in the years 1990-2004 was due to immigration. In Israel during the same period, 86 percent of the population growth was due to immigration.

Of course, the concern in the U.S. is not about all immigrants, just about illegal immigrants. In Israel, on the other hand, virtually all of the immigrants are legal, as long as they are Jews. While this policy is objectionable in all kinds of ways, it’s nevertheless a useful case study in terms of immigration, since the immigrants to Israel are often poor. (Most of them, 80 percent in the years 1990-2004, came from the former Soviet Union.) So how does Israel deal with this influx of destitute immigrants? By letting them have enough time and enough income to find where they are most needed, they don’t add an imbalance to the work force as a whole.

Jews who immigrate to Israel receive welfare for 18 months, which in Israel is not called welfare but “assured income.” Immigrants also get subsidized mortgages if they wish to buy apartments, or rental subsidies for five years if they wish to rent. As for the makeup of the work force, immigrants get free vocational training and university students get stipends. Finally, free health insurance is available to immigrants for six months. The end result is that immigrants are absorbed with little or no opposition from workers: The work force grows, but so does the demand for labor. Some immigrants become construction workers, for instance, but the demand for housing and therefore for construction workers grows as the new immigrants are housed. 

Needless to say, giving these benefits to immigrants only would never be acceptable to workers who are themselves poor. But what if all poor workers got education, training, subsidized housing, and health care? These policies would be costly, but simply ignoring the problem and unleashing the immigrants on the low-wage job market without assuming any responsibility for the consequences is cruel not only to immigrants but also to low-wage, hardworking citizens. The problem of immigration cannot be separated from the problem of labor, and it’s time we dealt with both.

Moshe Adler teaches economics at Columbia University and at the Harry Van Arsdale Center for Labor Studies at Empire State College. He is the author of the book “Economics for the Rest of Us: Debunking the Science That Makes Life Dismal,” recently published by The New Press.

"Small" Government Caused the Mining and Oil Rig Disasters

by John Lawrence

Small government means getting government out of people's (corporations') lives. That means deregulation since regulation is getting government into our lives. But I want government snooping and regulating corporations' lives in order to avoid disasters like the recent mining and oil rig diasters which were caused by small government. Massey Energy repeatedly ignored mining violations because it was cheaper to pay fines than to fix the violations. Their lobbyists had drilled holes in regulations that allowed them to put off paying fines for practically ever. New York State Comptroller Thomas DiNapoli, overseer of New York's Common Retirement Fund, which owns 303,550 shares of Massey stock, valued at $14.1 million said "Massey's cavalier attitude toward risk and callous disregard for the safety of its employees has exacted a horrible cost on dozens of hard-working miners and their loved ones." Oil rig owners were anxious to get big government with their awkward regulatory apparatus out of their lives too so they wouldn't have to put into place expensive (and profit lowering) safety devices that would have averted the tragedy in the gulf.

In the deregulatory environment fostered by the Reagan and Bush administrations, profits were put ahead of people. One tool for accomplishing this is deregulation or "small" government. Actually the dichotomy between small and big government is largely a myth created by the right wing in order to "keep government out of (corporations) lives." After all corporations are people too, right, as determined by the recent Supreme Court decision in Citizens United. The Dred Scott decision said that persons were property; the Citizens United decision said that properties were persons.

The right wing creates a myth and then sells it to the American people on a bumper sticker. They tout the virtues of 18th century American life to which they all aspire. Only problem is this ain't the 18th century. Wake up and small the coffee. The crucial issue here is not big government vs small government; it's smart government vs dumb government. And with the Republicans (and Republican lite Bill Clinton) in charge for the last 30 years, what we've gotten is dumb government. Obama represents a turn to the smart (as opposed to the left or the right) but even he's not Superman. He can't change 30 years of Republican rule and philosophy overnight. He can't even get his own people into position as exemplified by Republican filibustering of Obama's appointments!

Small government is also exemplified by the asleep-at-the-switch SEC who watched porn while Rome (er, America) burned. Bush told them regulation, we don't need no damned regulation. Watch porn instead! If any of these supposed "regulators" were doing their jobs, we wouldn't have had the likes of Bernie Madoff bilking people out of billions of dollars or Goldman's toxic investments being sold to pension funds or harmful drugs being foisted on the American people. In Europe they abide by the "precautionary principle." That means that a drug isn't placed on the market until it is proven safe. In the US they place a drug on the market until it's proven unsafe. In the US they say what the hell, let's place profits ahead of people. Let 'er fly. Put the damn drug on the market, and let's see what happens. If the lawsuits that result from it are less than the profits, it's a winner!

So while politicians fulminate and bloviate over small government vs big government, smarter societies are only concerned about smart government vs dumb government. They don't politicize every football that comes down the pike. They don't allow big money to control elections and, via lobbyists, to control legislation. They don't try to fool the public by creating bumper sticker myths that they then get the public fighting over, thereby distracting them from the real issues. They allow their public sectors to make a profit instead of always running debts like the good ole US. They have an ethos of "we're all in this together" instead of the American ethos of "everyone for his damn self."