California Free Press

Yes, America Still Needs Unions

Posted on Feb 23, 2011 by truthdig

By Joe Conason

“There was once a need for unions, but they’ve outlived their purpose,” said a nice lady interviewed on the radio in Tennessee just the other day. Annoyed by the spectacle of tens of thousands of teachers, firefighters, cops and other public employees rallying to protect their rights in Wisconsin, she was saying what more than a few Americans think about the labor movement.

They ought to think again—unless they want their children and grandchildren to become the peons of a corporate oligarchy.

Behind the vague notion that unions are somehow obsolete is the suggestion that workers—and their families—are amply protected by the law’s provisions prohibiting child labor and mandating minimum wages, safe working conditions, overtime pay and all the other standards that we now take for granted.

But if you listen carefully to “conservatives” of the ilk of Wisconsin Gov. Scott Walker and billionaire financier David Koch, you’ll learn that they want to do away with most if not all of those advances, hard won by the labor movement and its allies over the past century. Their core belief is that the state should never interfere with capital—and therefore every law defending workers or consumers is a constitutional abomination. Their ultimate project is to return this country to the absolute dominion of the wealthy that existed before the rise of the Progressive Movement and the New Deal.

Politicians like Walker know better than to articulate their goals so unappealingly. Invariably, they prefer to talk about fiscal responsibility and balanced budgets, hoping that nobody will notice (in Wisconsin or Washington) how they squander vast sums on tax breaks for the wealthy while demanding “sacrifice” from the middle class and the poor. Breaking unions is the only way, they tell us, to restore jobs and ensure prosperity.

But if you thumb back through the pages of our economic history over the past hundred years or so, a number of obvious facts stand out. First, the United States enjoyed a far better distribution of income and a steady improvement of our productivity and power when the labor movement was strong. Second, labor always struggled to expand human and civil rights for everyone, whether or not they happened to belong to unions. And third, the success of labor’s effort toward a more equitable society ensured broad prosperity for decades. As labor’s power diminished, income and wealth skewed upward—and helped drive the economy into stagnation and recession.

So Americans not only display ingratitude when they denigrate unions, which have done so much to improve the lives of ordinary people, but ignorance as well. Even in its terribly weakened condition, the labor movement remains a bulwark against the kind of corporate tyranny that would swiftly make serfs of the rest of us.

This week, a prankster pretending to be David Koch phoned Gov. Walker and recorded their chummy, obnoxious, highly revealing conversation. Hearing the governor eagerly agree as his top contributor rambled on about union “bastards” was like listening to a conversation between a robber baron and a servile politician of the Gilded Age. Here was the new version of the unvarnished “conservatism” that ruled us before our forebears learned to stand upright, join together and fight for democracy.

It is more than a funny coincidence that the Wisconsin uprising echoes the revolutionary democratic fervor currently sweeping across North Africa and the Mideast.

Common to every dictatorship, from the fascist and communist despots of the 20th century to their counterparts in today’s authoritarian societies, is the impulse to forbid workers from organizing. The legacy of those who established those rights with their blood and toil, both here and abroad, is not ours to surrender to bullies such as Walker and Koch. Like all of our liberties, it is a trust to be guarded—by every means available.

© 2011 Creators.com

 

Five Tricks Corporations Use to Avoid Taxes

From Businesspundit

The US corporate income tax rate is 35%. Yet this year, Google, which made $5.5 billion in revenues, only paid an effective tax rate of 2.4%. Indeed, it’s not unusual for a corporation to pay only 6-7% in effective taxes.

Such numbers put you and me and most small businesses to shame. What gives?

It turns out that tax credits aren’t the only trick corporations use to evade taxes. From Intel to Bath & Body Works, most big American corporations have a subsidiary and income shifting scheme that radically skews the amounts they end up paying the IRS. Here are five of the main components that help corporations write pint-sized IRS checks.

Subsidiaries

Why make profits in your home state when you can move them somewhere with lower income taxes? Such is the rationale of many American companies headquartered in high-tax states. Strategies like the so-called Las Vegas Loophole let companies move profits to subsidiaries located in states like Nevada, which has no corporate income tax.

Chain retailers are among the corporations that love to set up subsidiaries. Wal-Mart, for example, set up an out-of-state subsidiary that “collects ‘rent’ from Wal-Mart stores, enabling the chain to disguise (an estimated $7.3 billion in profits over four years) as expenses,” according to this article. By paying itself rent via a real estate investment trust (REIT), Wal-Mart avoids additional taxes while keeping money inside the corporation.

Another trick is to create a trademark holding company in a state that doesn’t tax intangible assets like trademarks. Home Depot has a paper subsidiary in trademark-tax-free Delaware. This subsidiary collects large trademark use fees from Home Depot stores in other states, writes NewRules. Home Depot deducts those fees as a business expense, and voila, its taxes dive.

Transfer pricing

About half of the 50 US states have adopted combined reporting rules to clog the subsidiary loopholes mentioned above. Combined reporting requires companies to list all of their sources of profit, regardless of state, before figuring out their state tax burden.

For many companies, however, national combined reporting requirements aren’t an issue—they just create subsidiaries in international tax shelters like Ireland and the Cayman Islands. A tool called transfer pricing lets companies make profits in tax havens while allocating expenses to higher-tax countries, writes the OECD Observer.

A company can apply transfer pricing to a variety of financial categories, including interest rates, service charges, share sales, and depreciation. This fickleness makes transfer pricing a continued point of intense scrutiny for governments around the world.

Google’s “Double Irish” strategy is one popular transfer pricing scheme. Google created two companies in Ireland to execute this maneuver. One pays royalties to use intellectual property (expenses that reduce income tax in Ireland). A second, located in Bermuda, collects those royalties. The meat in Google’s sandwich is the Netherlands, where profits go on their way from Ireland to Bermuda.

“Irish tax law exempts certain royalties to companies in other EU- member nations,” according to the excellent Bloomberg article that describes Google’s acrobatics. “A brief detour to the Netherlands avoids…Irish withholding tax.”

If you think the federal government would want to sink its teeth into those profits by implementing an international combined reporting requirement, think again. The feds would rather get what they can without changing the law: Google and the IRS negotiated for three years before coming to “an arrangement” that let the company execute its transfer pricing strategy, according to Bloomberg.

Nowhere income

States can only tax corporations with physical facilities, or a “nexus,” within the boundaries of the state. Otherwise, federal law doesn’t let states tax corporations, according to NewRules. Just selling goods or services in a state without having a factory or other facilities there translates to no state taxes.

Corporations have leveraged this rule to the point of having “nowhere income” that is not taxable in any state. NewRules illustrates with an example: “…if Nails Inc. has all of its property and payroll in two states, but just 10% of its sales in those states, then it will pay state income taxes on only 70% of its profits: (100 + 100 + 10)/3. The other 30% will go untaxed.” Taxes are even easier to avoid in states where sales are more heavily weighted than, say, payroll or property, according to NewRules.

Nowhere income becomes more elaborate if you can pull it off internationally. Intel did just this in the early 2000s, according to CTJ.org. The company declared “millions of dollars in profits from selling US-made computer chips as Japanese income for US tax purposes.” This exempted it from US taxes. Meanwhile, a US-Japan tax treaty required Japan to “treat the profits as American.” That meant Intel didn’t have to pay Japanese tax, either.

Income shifting

No transfer pricing-subsidiary scheme is complete without income shifting. This happens when a company transfers or licenses its intellectual property to a subsidiary in a tax shelter. Any foreign profits based on that technology are taxed according to the subsidiary country’s tax law.

According to US tax rules, such subsidiaries must pay an “arm’s length” amount for those rights, the same mutually-agreed-upon amount any unaffiliated company would pay for them. So parent companies set that amount low to avoid tax burden, writes CTJ.org.

The nature of the loophole means that the feds can’t get lost taxes back, either. Bloomberg writes that “…multinationals that shift profits overseas are deferring U.S. income taxes, not avoiding them permanently. The deferral lasts until companies decide to bring the earnings back to the U.S. In practice, they rarely repatriate significant portions, thus avoiding the taxes indefinitely.”

Tax havens

Some tourist havens, notably Bermuda and Ireland, also happen to be stellar tax havens. “58% of offshore profits are now recorded in tax havens,” according to this FinFacts Ireland article. US operations, for example, have recorded more than $25 billion in profits in tiny Bermuda, which doesn’t charge any taxes, writes FinFacts.

It doesn’t matter that most of those multinationals’ sales happened in higher-tax countries like Germany, the US and the UK. Wherever tax rates are low, multinational profits rise, sometimes exponentially. That translates to tens of billions of dollars the US Treasury doesn’t get its hands on. US corporations, meanwhile, enjoy enviable tax rates, while the tax havens that house them benefit from the injection of foreign capital.

War on the Middle Class

 

Shock Doctrine, U.S.A.

by Paul Krugman

Published February 24, 2011 by the New York Times

Here’s a thought: maybe Madison, Wis., isn’t Cairo after all. Maybe it’s Baghdad — specifically, Baghdad in 2003, when the Bush administration put Iraq under the rule of officials chosen for loyalty and political reliability rather than experience and competence.

As many readers may recall, the results were spectacular — in a bad way. Instead of focusing on the urgent problems of a shattered economy and society, which would soon descend into a murderous civil war, those Bush appointees were obsessed with imposing a conservative ideological vision. Indeed, with looters still prowling the streets of Baghdad, L. Paul Bremer, the American viceroy, told a Washington Post reporter that one of his top priorities was to “corporatize and privatize state-owned enterprises” — Mr. Bremer’s words, not the reporter’s — and to “wean people from the idea the state supports everything.”

The story of the privatization-obsessed Coalition Provisional Authority was the centerpiece of Naomi Klein’s best-selling book “The Shock Doctrine,” which argued that it was part of a broader pattern. From Chile in the 1970s onward, she suggested, right-wing ideologues have exploited crises to push through an agenda that has nothing to do with resolving those crises, and everything to do with imposing their vision of a harsher, more unequal, less democratic society.

Which brings us to Wisconsin 2011, where the shock doctrine is on full display.

In recent weeks, Madison has been the scene of large demonstrations against the governor’s budget bill, which would deny collective-bargaining rights to public-sector workers. Gov. Scott Walker claims that he needs to pass his bill to deal with the state’s fiscal problems. But his attack on unions has nothing to do with the budget. In fact, those unions have already indicated their willingness to make substantial financial concessions — an offer the governor has rejected.

What’s happening in Wisconsin is, instead, a power grab — an attempt to exploit the fiscal crisis to destroy the last major counterweight to the political power of corporations and the wealthy. And the power grab goes beyond union-busting. The bill in question is 144 pages long, and there are some extraordinary things hidden deep inside.

For example, the bill includes language that would allow officials appointed by the governor to make sweeping cuts in health coverage for low-income families without having to go through the normal legislative process.

And then there’s this: “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).”

What’s that about? The state of Wisconsin owns a number of plants supplying heating, cooling, and electricity to state-run facilities (like the University of Wisconsin). The language in the budget bill would, in effect, let the governor privatize any or all of these facilities at whim. Not only that, he could sell them, without taking bids, to anyone he chooses. And note that any such sale would, by definition, be “considered to be in the public interest.”

If this sounds to you like a perfect setup for cronyism and profiteering — remember those missing billions in Iraq? — you’re not alone. Indeed, there are enough suspicious minds out there that Koch Industries, owned by the billionaire brothers who are playing such a large role in Mr. Walker’s anti-union push, felt compelled to issue a denial that it’s interested in purchasing any of those power plants. Are you reassured?

The good news from Wisconsin is that the upsurge of public outrage — aided by the maneuvering of Democrats in the State Senate, who absented themselves to deny Republicans a quorum — has slowed the bum’s rush. If Mr. Walker’s plan was to push his bill through before anyone had a chance to realize his true goals, that plan has been foiled. And events in Wisconsin may have given pause to other Republican governors, who seem to be backing off similar moves.

But don’t expect either Mr. Walker or the rest of his party to change those goals. Union-busting and privatization remain G.O.P. priorities, and the party will continue its efforts to smuggle those priorities through in the name of balanced budgets.

Dylan Ratigan on the Need for Infrastructure Investment

The Republican Shakedown

by Robert Reich

Wednesday, February 23, 2011

 

You can’t fight something with nothing. But as long as Democrats refuse to talk about the almost unprecedented buildup of income, wealth, and power at the top – and the refusal of the super-rich to pay their fair share of the nation’s bills – Republicans will convince people it’s all about government and unions.

Republicans claim to have a mandate from voters for the showdowns and shutdowns they’re launching. Governors say they’re not against unions but voters have told them to cut costs, and unions are in the way. House Republicans say they’re not seeking a government shutdown but standing on principle. “Republicans’ goal is to cut spending and reduce the size of government,” says House leader John Boehner, “not to shut it down.” But if a shutdown is necessary to achieve the goal, so be it.

The Republican message is bloated government is responsible for the lousy economy that most people continue to experience. Cut the bloat and jobs and wages will return.  

Nothing could be further from the truth, but for some reason Obama and the Democrats aren’t responding with the truth. Their response is: We agree but you’re going too far. Government employees should give up some more wages and benefits but don’t take away their bargaining rights. Private-sector unionized workers should make more concessions but don’t bust the unions. Non-defense discretionary spending should be cut but don’t cut so much.

In the face of showdowns and shutdowns, the “you’re right but you’re going too far” response doesn’t hack it. If Republicans are correct on principle, they’re more likely to be seen as taking a strong principled stand than as going “too far.” If they’re basically correct that the problem is too much government spending why not go as far as possible to cut the bloat?

The truth that Obama and Democrats must tell is government spending has absolutely nothing to do with high unemployment, declining wages, falling home prices, and all the other horribles that continue to haunt most Americans.

Indeed, too little spending will prolong the horribles for years more because there’s not enough demand in the economy without it. 

The truth is that while the proximate cause of America’s economic plunge was Wall Street’s excesses leading up to the crash of 2008, its underlying cause — and the reason the economy continues to be lousy for most Americans — is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums. American’s aren’t buying cars (they bought 17 million new cars in 2005, just 12 million last year). They’re not buying homes (7.5 million in 2005, 4.6 million last year). They’re not going to the malls (high-end retailers are booming but Wal-Mart’s sales are down).

Only the richest 5 percent of Americans are back in the stores because their stock portfolios have soared. The Dow Jones Industrial Average has doubled from its crisis low. Wall Street pay is up to record levels. Total compensation and benefits at the 25 major Wall St firms had been $130 billion in 2007, before the crash; now it’s close to $140 billion.

But a strong recovery can’t be built on the purchases of the richest 5 percent.

The truth is if the super-rich paid their fair share of taxes, government wouldn’t be broke. If Governor Scott Walker hadn’t handed out tax breaks to corporations and the well-off, Wisconsin wouldn’t be in a budget crisis. If Washington hadn’t extended the Bush tax cuts for the rich, eviscerated the estate tax, and created loopholes for private-equity and hedge-fund managers, the federal budget wouldn’t look nearly as bad.

And if America had higher marginal tax rates and more tax brackets at the top – for those raking in $1 million, $5 million, $15 million a year – the budget would look even better. We wouldn’t be firing teachers or slashing Medicaid or hurting the most vulnerable members of our society. We wouldn’t be in a tizzy over Social Security. We’d slow the rise in healthcare costs but we wouldn’t cut Medicare. We’d cut defense spending and lop off subsidies to giant agribusinesses but we wouldn’t view the government as our national nemesis.

The final truth is as income and wealth have risen to the top, so has political power. The reason all of this is proving so difficult to get across is the super-rich, such as the Koch brothers, have been using their billions to corrupt politics, hoodwink the public, and enlarge and entrench their outsized fortunes.  They’re bankrolling Republicans who are mounting showdowns and threatening shutdowns, and who want the public to believe government spending is the problem. 

They are behind the Republican shakedown. 

These are the truths that Democrats must start telling, and soon. Otherwise the Republican shakedown may well succeed.

Social Security Taxes Fall Unfairly on the Poor Self-Employed

by John Lawrence

Ever since Ronald Reagan, on Alan Greenspan's advice, raised social security (FICA) taxes on the self-employed by 50% in 1984, the poor self-employed, while having enough deductions and exemptions to pay no income tax have been stuck with paying 14.1% of their business income on FICA taxes no matter if they were below the poverty line or not. Take my own case as an example. Here are my FICA taxes for years in which I paid no income tax:

Year	Business Income	Income Tax	FICA Tax	Poverty Line
1998	$3358.	0	$474.	$8050.
2002	$6995.	0	$988.	$8860.
2004	$3666.	0	$518.	$9310
2005	$1764.	0	$249.	$9570.
2007	$16350.	0	$2310.	$10,210.

As can be plainly seen for four of the five years, I was clearly below the poverty line for an individual, yet I paid 14.1% of my income in FICA taxes. Self-employed people pay both the employer's and employee's share of FICA taxes. They pay at a nominal 15.3% rate, but the IRS in its infinite wisdom multiplies business income by 0.92 before taking the 15.3% making the FICA tax rate effectively 14.1%.

Fortunately, I have other income besides my self-employment income which brings me up way above the poverty line, but for the poor slobs with income and tax statistics such as the above and with no other source of income, they are paying through the nose in FICA taxes even if they have enough other tax write-offs and expenses to bring their net income tax down to zero. This is an example of how onerous and regressive FICA taxes really are for the self-employed. And Republicans claim they are supportive of small business. Phooey! Small business starts out with the self-employed and they are taxed to the hilt thanks to Alan Greenspan and Ronald Reagan.

Here is what Dr. Ravi Batra had to say:

The other reason [why George W Bush has destroyed 3 million manufacturing jobs] is a huge rise in taxes on small business. The Republicans are right when they say raising taxes kills the economy and jobs, but they forget that they are the ones who raised such taxes. This perhaps comes as a shock to you. What! The Republicans raising tax rates, and that too on small business? Nobody would believe that. Aren't they the party of tax cuts? They are, indeed, but only for the wealthy. They have crippled the small business person with the largest tax rise that occurred on self employment under President Reagan.

This is a good example of how tax money is redistributed from the poor to the wealthy. It would be one thing if all that money was going into the Social Security Trust Fund to be used when the baby boomers retired which was the advertised purpose. But no, that money taken from the poor was used to reduce taxes on the wealthy while not accruing as much of a deficit as would have accrued otherwise. Now that the baby boomers are actually starting to retire, the Republicans, instead of using all that money in the trust fund to pay their social security benefits, want to privatize social security on the grounds that the government can't afford to pay it any more especially if taxes have to be raised on the wealthy in order to pay it. So Americans have been bamboozled, and the self-employed in particular have been taken for a ride and carjacked!

Anyone below the poverty line should pay no FICA taxes at all! It is literally money taken out of the pockets of the poor which they cannot afford to pay. On a $7000. self-employment income the poor self-employed pay $1000 or one seventh of it to FICA taxes, and then there is no assurance that they will ever receive a payout in terms of social security especially if they are young, or they won't receive a payout until they are 70 or 75. They keep raising the retirement age, don't you know. So there is no respect for the fact that poor people have been paying this regressive tax for years in order that the rich can have their tax breaks. There is no social contract. Instead the poor are screwed in terms of the money they have to pay in and then they are screwed by being threatened with no social security in their old age.

The poor have been screwed with regressive taxes for 30 years or more. Now that it is coming time to pay the piper in terms of raising taxes on the wealthy to provide for the fact that money needs to be taken out of the social security trust fund to pay retirees, the deficit hawks don't want to raise taxes on the wealthy in order to do it. Why starting this year is social security adding to the deficit? Because the money coming into social security in terms of FICA taxes is less than the money being paid out to recipients. Until this year more money was coming in than was being paid out, and this excess was "borrowed" in order to reduce taxes on the wealthy. It just was used in the general fund instead of being put in a "lockbox" as Al Gore wanted to do. In place of the amounts borrowed special non-negotiable Treasury bonds (basically worthless IOUs) were placed in the social security trust fund to be redeemed, supposedly, when the payouts to recipients exceeded the income in terms of FICA taxes. That day has now arrived and, instead of Republicans gladly being willing to redeem those special Treasury bonds backed, supposedly, by the "full faith and credit of the American government," they want to privatize social security. In other words, as far as Republicans are concerned, the "full faith and credit of the American government" is a farce when it comes to the redemption of the $2.5 trillion in the social security trust fund. They used the excess when more was coming in than was going out to reduce taxes on the welathy; now they want to reneg, when more is going out than is coming in, because that would either increase the deficit or mean that taxes on the wealthy would have to be raised. It's that simple.

And court cases have established that American citizens have no direct claim on the monies they have contributed to the social security trust fund. This makes it possible that Republicans, by changing the rules on social security payouts, can bypass the necessity for ever paying out one dime of the monies in the social security trust fund that are backed (supposedly) by the "full faith and credit of the American government."

It’s Time to Support Our Employees

By Rocky Neptun

The greatest threat of the 21^st Century is not terrorism or religious fanaticism or nationalism….. it is concentrated power – both political and economic – within the corporate state. That very power, concentrated in an elite, an oligarchy, whether national or local, is an interlocking system of wealth, politics, media, and corporations whose major purpose is to destroy the ability of individual citizens to organize together for the common good through the mechanism of government.

   Their goal is unregulated greed, poverty wages, the right to pollute, the ability to sell dangerous drugs and unsafe products, the isolation and powerlessness of each citizen to vote or bargain or even plead in the media for a better life for their children. Theirs is a feudal world, where the rich and CEO’s are the new Barons and Earls, and people are trapped in stratified classes, almost castes, without access to education or economic opportunity.

    They seek hierarchy, where they and their children will always be on top of the pyramid. A return to the social tyranny of Dickens’ day, when to be poor was a moral sin, a personal failure and a crime against society. They pretend to favor a “market” system, knowing full-well there is no more competition in monopoly capitalism, where large corporations have bought off most politicians and judges and, like Wal-Mart, have the power to overrule city councils.

   God bless the rich, is their motto; no one should have enough to eat, a warm place to sleep, medical aid, a good education, unless they have the money to pay for it. They see virtue in selfishness, weakness in sharing.  They would fight social responsibility, whether it’s feeding a child or saving our human species from extinction because of global warming.

   From Washington, D.C to Madison, Wisconsin to San Diego, the goal of the corporate state is to destroy community government and its regulatory power for the common good. Martin Luther King, Jr. is long gone, the Civil Rights movement tamed, the national unions defanged and almost irrelevant with over 40 years of corporate bought anti-union legislation and managerial intimidation, the Democratic Party, run by opportunists and political whores has drummed its left-wing into submission or flight, people of faith who once fought systemic injustice, what St. Paul called “social sin” as opposed to individual sin, now hide, writing an occasional check for charity and what was once the “liberal class,” as Chris Hedges calls it, has become a useless hodge-podge of designer causes, identity ghouls and mouse warriors fighting injustice in their underwear with e-mails.

   The last bulwark against the corporate state, the last vestige of an organized group of people of conscience, who see value in the public commons – whether it is libraries, free recreational facilities, public schools, health clinics, public transportation, unadulterated food, safe working conditions, clean air and water, or a safe haven for those to fragile, mentally or physically, to survive in dog-eat-dog corporatism – are the public employee unions. That is why they are under attack in Madison and San Diego.

   The newly elected Governor of Wisconsin, elected with millions of corporate dollars, taking a playbook from the oligarchy in San Diego, has blamed that state’s budget deficit on public employee unions. But unlike our city, where the unions were tamed at the turn of the Twentieth Century, when organizing Wobblies (Industrial Workers of the World) were murdered by police, tarred and feathered by vigilantes and run out of town by the hysteria of the wealth based media, both the city of Madison and the state of Wisconsin have a grand history of struggling for workers. Most of the rights we enjoy today as employees were first secured in Wisconsin.

   For the right-wing governor to propose that public employee unions lose the right of collective bargaining guts the whole purpose of a union - an alliance of employees to secure safe and just working conditions by uniting for a common purpose. This very notion of individuals alone, isolated, powerless in the workplace is what the corporate state has in store for us all – it is their fundamental neo-liberal dogma. To organize for the common good, whether employees for decent wages or citizens fighting pollution in a nearby stream, is bad for business and the mechanism which allows for a social consciousness must be crushed. The very thought of communal responsibility or action for anything that threatens the corporate state, whether it is safe medicine or protection for our neighborhood mom and pop stores, must be made to seem not only impossible, but radical and outside the parameters of the personal capability of any individual.

   San Diego’s Attack on Unions

   San Diego’s oligarchic assault on its public employee unions was by stealth. The Republican game plan, helped by a few self-serving Democratic city council members, was to slowly squeeze every dime into corporate welfare over the years, subsidizing ball parks, hotels, golf courses, infrastructure projects for hundreds of corporations and call it “redevelopment” while under-funding their legal, contractual obligations to pay into the pension accounts of their employees and then, when the whole bait and switch game was discovered blame it on “greedy” city employees.

   It was a win-win situation for the radical right. Bankrupt the city with corporate welfare; then, proclaim the only solution is to turn the services and assets of the city over to the very snake oil salesman and corporate crooks who benefited from the shell game (privatization or outsourcing, they call it) and crush the public employee unions under an Orwellian campaign of media lies and distortions.

   Over and over, like an unattended car alarm, loud, viciously intrusive, repeat the lie. The talking heads parroting the politicians parroting the lobbyists parroting the journalists parroting the accountants parroting the attorneys and back again. An endless chain of articles, sound bites at 10, political speeches, official pronouncements, all designed to inculcate the citizen, like a drill sergeant, to penetrate his or her very psyche: then, in military cadence, repeat the chant …."sound off…who’s at fault..1-2-3….sound off…the unions…1-2-3….” until it reverberates through the consciousness rhythmically and ceaselessly. 

    The real problem with our city, unlike Wisconsin, is that there is no real solidarity between people who work, unionized employees and the struggle against pitiful wages in the San Diego labor market – the worst cost of living to wages ratio of any major city in the nation. Where were the public employee unions when the grocery workers went on strike in 2003? Where has the AFL-CIO Labor Council been all these years as the average San Diegan’s wages have stagnated and lost ground due to inflationary pressures? Jerry Burkiewicz, head of the Council for many years, can take a flush job with Sempra Corporation, which exploits its monopoly energy position, lies to government regulators and bribes Mexicans politicians so they can pollute without penalty, but he has never agitated or called for a living wage for all who work in San Diego.

   The problem with unions in San Diego is that unlike the Wobblies, who say an injury to one employee is an injury to all employees, most unions follow the corporate model of bottom line economics and “what’s in it for me” advocacy. First, the union officials take care of themselves, then their members, and then political allies. And the rest of us who work for a living; well, we’re on our own, isolated, without any bargaining power – just like the governor of Wisconsin wants for his employees.

   But in spite of the limitations and often myopic view taken by union leaders, the rank and file members of the public employee unions are our teachers, librarians, nurses, trash collectors, lifeguards and hundreds of other taskers whose collective responsibility is to build our common capital, the life blood of society which cannot be commodified. It is neighborhood spirit, history, culture, attitude, a shared narrative of belonging and apportionment as members of a community, compassion and empathy, fairness and justice, and, ultimately, a sense of subjective purpose, personhood which cannot be bought and sold in a corporate state.

   Public employees work for us, not Wal-Mart. As their employers, we should follow the Golden Rule, not the corporate rule, and treat them as we would want to be treated. In San Diego, we have been silent far too long in defense of these wonderful, vital community members.

      *****

Rocky Neptun is director of the San Diego Renters Union.

A Fair Approach to Deficit Reduction: 50% Spending Cuts, 50% Revenue Enhancement

by John Lawrence

On Meet the Press last Sunday David Gregory said, "The national conversation is about spending cuts." Really! I thought it was about deficit reduction, and there's two ways to cut the deficit: spending cuts and/or revenue enhancement. The revenue enhancement part of the equation isn't even being discussed. In fact if Obama hadn't compromised on extending the Bush tax cuts for the rich, there would be no need for spending cuts. This society is in a downward spiral precisely because the only consideration is for spending cuts and spending cuts for social services at that. Where is the talk about cutting the bloated military-industrial complex budget which is greater than all the rest of the world's military budgets combined? Where is the talk about cutting the subsidies to the most profitable corporations in world history - the oil companies - and to agribusiness? Where is the talk about fixing the loopholes that let corporations offshore their money and not pay their fair share of taxes. And it goes on and on. Instead, all the talk is about balancing the budget on the backs of the poor and middle class.

And the situation in Wisconsin is all about breaking the backs of the unions which are the largest contributors to Democratic politicians leaving only the big contributors to Republican politicians still active. Republicans are trying to run the table in such a way that the only money in political races will be Republican money. The Democratic party will have been marginalized. Democrats might as well pack their bags and go home if that happens. Republican governors are engaged in a coordinated attack on unions in an attempt to break them. That's why it's so important for Wisconsin workers to stand their ground. Ohio is next. Governor Walker initiated $137. million in tax breaks for business and then declared that their budget was $137. short and they would have to fix it by breaking the unions. What's more the Wisconsin Republicans just passed a measure making it more difficult to raise taxes. So they cut taxes there by creating a financial crisis and use this as a rationale for cutting public services. It's about time that the American middle class woke up and realized what is happening to them at the hands of Republicans whose only goal is to use government to transfer money from the poor and middle class to the wealthy. There is more inequality in America than there is in Egypt for chrissake.

But back to the national budget. Republicans have done everything in their power to insure that no tax breaks for the rich will be rescinded. They voted down Nancy Pelosi's initiative to close the loophole that lets corporations offdhore their money and not pay taxes on it. They voted down inititaives that would let the government negotiate with pharmaceutical companies in order to bring down the cost of drugs. They voted down the initiative that would provide for a public option in the Health Care Bill that would bring down the cost of health care. In fact the problem is not primarily with spending on government programs; it's the fact that Republicans have systematically eroded the tax base for the last 30 years thereby underfunding government and precipitating this downward spiral that they say can only be reversed by busting unions and balancing the budget on the backs of the poor and middle class.

People are resorting to suicide as the only way out.  A letter from a 99er who had his unemployment benefits cut off tells the tragic consequences of unemployment:

To the unemployed, sick, disabled and poor:

Hello,

I'm unemployed over two years now, a 99er without any benefits for three months. I followed Unemployed Friends almost from its start, never posted until now, but am grateful for my time with you all. I did as asked with calls and e-mails, etc. I've a confession to make to you all. I'm a criminal.

I've obeyed the 10 commandments and all laws except: I'm unemployed and that's now a crime, I'm poor and that's a crime, I'm worthless surplus population and that's a crime, I'm a main street American Citizen born and raised in the USA and that's now a crime, and I'm euthanizing myself as I write this note -- so arrest my corpse. This isn't a call for help, the deed is done, it's not what I wanted. Death is my best available option. It's not just that my bank account is $4, that I've not eaten in a week, not because hunger pangs are agonizing (I'm a wimp), not because I live in physical and mental anguish, not because the landlady is banging on the door non-stop and I face eviction, not that Congress and President have sent a strong message they no longer help the unemployed. It's because I'm a law abiding though worthless, long-term unemployed older man who is surplus population. Had I used my college education to rip people off and steal from the elderly, poor, disabled and main street Americans I would be wearing different shoes now -- a petty king. Hard work, honesty, loving kindness, charity and mercy, and becoming unemployed and destitute unable to pay your bills are all considered foolishness and high crimes in America now. Whereas stealing and lying and cheating and being greedy to excess and destroying the fabric of America is rewarded and protected -- even making such people petty kings and petty queens among us.

Since the end of 2008, when corporate America began enjoying the resumption of growth, profits have swelled from an annualized pace of $995 billion to the current $1.66 trillion as of the end of September 2010. Over the same period, the number of non-farm jobs counted by the Labor Department has slipped from 13.4 million to 13 million -- there is no recovery for the unemployed and main street. We taxpayers have handed trillions of dollars to the same bank and insurance industry that started our economic disaster with its reckless gambling. We bailed out General Motors. We distributed tax cuts to businesses that were supposed to use this lubrication to expand and hire. For our dollars, we have been rewarded with starvation, homelessness and a plague of fear -- a testament to post-national capitalism.

Twelve years ago, I lost the last of my family. Ten years ago, I lost the love of my life, couldn't even visit him in the hospital because gays have no rights. I fought through and grieved and went on as best I could. Seven years ago, I was diagnosed with Diabetes and Stage 2 high blood pressure with various complications including kidney problems, mild heart failure, Diabetic Retinopathy. These conditions are debilitating and painful. I am on over eight prescribed medications, which is very difficult without insurance and income. But I struggled on and my primary caregiver was very pleased with my effort overtime with my A1C at seven. Still these physical disabilities have progressively worsened, and I have had a harder and harder time functioning in basic ways. All the while, I give thanks to God because I know there are many more worse off than me -- and I tried to help by giving money to charities and smiling at people who looked down and sharing what little I had.

I am college educated and worked 35 years in management, receiving written references and praise from every boss for whom I worked. Yet, after thousands of resumes, applications, e-mails, phone calls, and drop ins, I've failed to get a job even at McDonalds. I've discovered there are three strikes against me -- most 99ers will understand. Strike one -- businesses are not hiring long-term unemployed -- in fact many job ads now underline "the unemployed need not apply." Strike two -- I am almost 60 years old. Employers prefer hiring younger workers who demand less and are better pack mules. Strike three -- for every job opening I've applied, there are over 300 applicants according to each business who allow a follow up call. With the U3 unemployment holding steady at 9.6 percent and U6 at 17 percent for the past 18 months, the chances of me or any 99er landing a job is less than winning the Mega Million Jackpot. On top of that, even the most conservative economists admit unemployment will not start to fall before 2012 and most predict up to seven years of this crap.

I believe the Congress and President have no intention of really aiding the unemployed -- due to various political reasons and their total removal from the suffering of most Americans, their cold-hearted, self-serving natures. Had they really wanted to help us, they could have used unspent stimulus monies or cut foolish costs like the failed wars or foreign aid, and farm subsidies. The unspent stimulus money alone could have taken care of ALL unemployed persons for five years or until the unemployment rate reached 7 percent if Congress and the President really wanted to help us -- and not string us all along with a meager safety net that fails every few months. In any case, if I were to survive homelessness (would be like winning the mega-millions) and with those three strikes against me, in seven more years, I'll be near 70 with the new retirement age at 70 -- now who will hire an old homeless guy out of work for nine years with just a few years until retirement?

So, here I am. Long term unemployed, older man, with chronic health problems, now totally broke, hungry, facing eviction. My landlady should really be an advocate for the unemployed -- she bangs on my door demanding I take action. A phone call and a "please" are not enough for her -- she is angry. She is right to be angry with me, I am unemployed -- as apparently everyone is now angry with us unemployed.

Two hundred and eleven social services cannot help single men. Food banks and other charities are unable to help any more folks -- they are overwhelmed with the poor in this nation. So I have the "freedom" to be homeless and destitute and "pursue happiness" in garbage cans and then die -- yay for America huh? It's the end of November and cold. A diabetic homeless older person will experience amputations in the winter months. So I will be raiding garbage cans for food, as my body literally falls apart, a foot here, a finger there. I have experienced and even worked with pain from my diseases -- hardship I can face. I just cannot muster the courage to slowly die in agony and humiliation in the gutter.

I have no family, I have no friends. For the past two years, I've had nobody to talk with as people who knew me react to the "unemployed" label as if it were leprosy and contagious. I am not a bad person, in fact people really like me. But everyone seems to be on a tight budget these days and living in incredible fear. It is hopeless since we all are hearing more and more that we unemployed are to blame for unemployment, that we are just lazy, that we are no good, that we are sinners, that we are druggies, yet we are the victims who suffer and are punished while the robber baron banksters and tycoons become senators, congress, presidents and petty kings. So the only option left for me is merciful self euthanasia.

It is with a heavy heart that I have set my death in motion, but what I am facing is not living. So off I go, I have made peace with God and placed my burden on Jesus and He forgives me. This nation has become evil to the core, with cold-hearted politicians and tycoons squeezing what little Main Street Americans have left. It is not the America into which I was born -- the land of the free and the home of the brave with kind folks who help neighbors -- it is now land of the Tycoon-haves and the rest of us have-nots who march into hopelessness and despair.

Every unemployed person I have met over these past two years has been saintly. Sharing what little they have, and being charitable -- being kind and patient and supportive. Isn't it amazing that we Americans who suffer so much, have not taken to the streets in violence, riots or gotten out the guillotines and marched on tycoons and Washington in revolt as would happen in most other nations? But rather we plead with deaf politicians to please help us. We don't demand huge sums -- just 300 bucks a week, barely enough to cover housing for most. Most of all we say, please help us get a job, please allow us dignity.

I can't help but juxtapose our plight to the tycoons and politicians. They are never satisfied with their enormous wealth, and always want more millions no matter whom it hurts. They STEAL from pension funds, banks, the people and government, and little Wall Street investors. Then rather than face punishment, they become petty kings in this world. They are disloyal to America, unpatriotic, and serve their own foreign UN-American greedy causes and demand more and more and more. I feel that this is not the nation into which I was born. I was born in America, the land of the free and the home of the brave. America, where people give as much as they receive. America, where all people work for the common good, and try to leave a better and more prosperous nation for the next generation. America, where people help their neighbors and show charity and mercy. This new America is alien to me -- it is an America of greed and corruption and avarice and mean spirited selfishness and hatred of the common good -- it is an America of savage beasts roaring and tearing at the weak, and bullying the humble and peacemakers and poor and those without means to defend themselves. I am not welcome here anymore. I don't belong here anymore. It's as if some evil beast controls government, the economy, and our lives now.

I must go now, my home is someplace else. Goodbye and God bless you all. God bless the unemployed and poor and elderly and disabled. God bless America and the American people except the tycoons and politicians -- may God retain the sins of tycoons and politicians and phony preachers and send them to the Devil.

Mark

Mark is at peace now having chosen death as the best option available to him. Sick, old - but not old enough to collect social security - and destitute, it seems that death is preferable to a homeless life digging through garbage cans.

A favorite subject of attack for the right wing is social security. There is no crisis in social security. All they have to do is to lift the cap - the amount of income on which social security is taxed - and social security would be in the black forever. All this would mean is that the rich would be taxed a little more. Naturally, the Republicans don't want to do it. You have to follow the money in politics. Republicans don't want to extend unemployment for the unfortunate, and they don't want to do anything that would result in the rich paying more taxes. In addition social security payouts could be means tested. Those with ample pensions and wealth shouldn't receive it at all. Naturally, Republicans don't want to take this route either. Finally, the social security trust fund contains $2.5 trillion. That represents Treasury bonds backed by the full faith and credit of the US government. But you'll never hear Republicans mention this either. The only thing they will talk about is that social security payouts will add $45 billion to the deficit this year. That's because the money coming in is less than the money going out. As long as the reverse was true, Republicans were only too glad to pay for their tax breaks for the rich on the backs of the regressive, overcharged social security taxes. Now that the government needs to draw on that $2.5 trillion in the social security trust fund and float more Treasury bonds to refinance it, Republicans are all worried. Give me a break.

The Health Care Act needs to be amended in such a way as to deal with the rising costs of Medicare, but Republicans won't do that either. Democrats tried with the original version. It all depends on whose ox is gored and the Republican ox is the private health insurance companies that are driving up the cost of health insurance and Medicare. A rational system would contain costs as every other country has done. In Germany, by the way, unemployment insurance never ends, and there is free health care during unemployment. Most advanced countries will bend over backwards with assistance in helping the unemployed find a job. After all it's in their best interests to do so since it lowers unemployment payouts and increases incoming taxes. But the logic of this strategy seems to have fallen on deaf ears in the US. US to the unemployed: fend for yourselves.

The military-industrial complex needs to be scaled back to a reasonable level. Hundreds of billions could be potentially saved there. Republicans don't want to consider this either. Finally, the Bush tax cuts for the wealthy need to be ended if Republicans are serious about debt reduction. The downward spiral the US finds itself in is caused primarily by historically low levels of taxation on the wealthy. The country was in much better fiscal shape under Eisenhauer, Nixon and Clinton when taxes on the wealthy were much higher. I don't think the wealthy were suffering then and the economy in general was much more robust.

The continuation on this current path of cutting taxes and then curtailing government programs is resulting in a downward spiral that will turn the US into a third rate nation within a generation or two.

Wisconsin 2.0: Stop the Corporate Tax Dodgers

Published on Tuesday, February 22, 2011 by CommonDreams.org

by Chuck Collins

The protests in Wisconsin could easily spread.  While not every governor will recklessly attack collective bargaining, all states are facing major budget constraints.

This is the strategic moment to dramatically juxtapose the pain of local budget cuts with the scandal of corporate tax dodging.   This April 15th Tax Day, let’s make our national focus be on stopping tax haven abuse and closing corporate tax loopholes.

States must close combined budget gaps of over $102 billion –and most are choosing deep budget cuts.  Meanwhile, thanks to ways that U.S. corporations game the system to reduce their taxes, overseas tax havens cost the U.S. treasury over $100 billion a year.

In England, the movement UK UNCUT, has galvanized street protests, media investigations and legislative action.  They have dramatized the scandal of billions lost thanks to overseas tax havens and corporate loopholes with the human face of federal and state budget cuts.

In every U.S. state, we should be doing the same.  Every time a politician complains that “there is no money” or “we must make these cuts,” we should be pointing to the corporate tax dodging that could immediately close our budget gaps.

We should name names and show up at their branches.  First there are the banks that wrecked our economy and accepted billions in taxpayer funded TARP funds.  These include Wells Fargo, Goldman Sachs and Bank of America.  Our message: Pay up!

Pay up! General Electric, Carnival Cruise lines, Boeing, FedEx, News Corp, ExxonMobil, Pfizer, Proctor and Gamble.  They pretend their profits are earned in tax havens like the Grand Cayman Islands and their losses are earned in the U.S., lowering their tax bills.

These US companies use our shared infrastructure, but don’t pay their fair share.  They enjoy our roads, national defense, emergency services, and federally-funded research.  They are profitable but don’t pay their full freight.  They undercut local businesses that pay their taxes while struggling to compete on an unlevel playing field.

 “There’s a direct connection between corporate tax dodging and what’s happening in people’s lives,” said Carl Gibson one of the founders of US UNCUT Mississippi. “If we close those loopholes, we wouldn’t have to be cutting back on firefighters, library hours and student loans.”

Gibson started a web site after being inspired by the movements in England. “I work three jobs and can barely cover my $450 per-month rent,” said the 23-year old Gibson. “But I still pay my taxes.  All I’m asking is that the wealthiest corporations pay what they owe, too.”

US UNCUT is launching the first wave of protests this Saturday, February 26th with a focus on Bank of America. There are actions planned in over 20 states. Bank of America has launched a glitzy PR campaign about how charitable and community-minded they are.  But we should remind them the only way back into our good graces is to “Pay up!”

The Tax Justice Network and Business and Investors Against Tax Havens have been pressing over the last year to keep these issues in the public spotlight. With US UNCUT teaming up with the Other 98 and other coalitions focused on corporate tax dodging, we can anticipate a lively April 15th Tax Day. 

Chuck Collins is a senior scholar at the Institute for Policy Studies where he directs the Program on Inequality and the Common Good (www.inequality.org ). He is co-author of The Moral Measure of the Economy.

The Coming Shutdowns and Showdowns: What’s Really at Stake

by Robert Reich

Monday, February 21, 2011

Wisconsin is in a showdown. Washington is headed for a government shutdown.

Wisconsin Governor Scott Walker won’t budge. He insists on delivering a knockout blow to public unions in his state (except for those, like the police, who supported his election).

In DC, House Republicans won’t budge on the $61 billion cut they pushed through last week, saying they’ll okay a temporary resolution to keep things running in Washington beyond March 4 only if it includes many of their steep cuts — among which are several that the middle class and poor depend on. 

Republicans say “we’ve” been spending too much, and they’re determined to end the spending with a scorched-earth policies in the states (Republican governors in Ohio, Indiana, and New Jersey are reading similar plans to decimate public unions) and shutdowns in Washington.

There’s no doubt that government budgets are in trouble. The big lie is that the reason is excessive spending. 

Public budgets are in trouble because revenues plummeted over the last two years of the Great Recession. 

They’re also in trouble because of tax giveaways to the rich. 

Before Wisconsin’s budget went bust, Governor Walker signed $117 million in corporate tax breaks. Wisconsin’s immediate budge shortfall is $137 million. That’s his pretext for socking it to Wisconsin’s public unions.

Nationally, you remember, Republicans demanded and received an extension of the Bush tax cuts for the rich. They’ve made it clear they’re intent on extending them for the next ten years, at a cost of $900 billion. They’ve also led the way on cutting the estate tax, and on protecting Wall Street private equity and hedge-fund managers whose earnings are taxed at the capital gains rate of 15 percent. And the last thing they’d tolerate is an increase in the top marginal tax rate on the super-rich. 

Meanwhile, of course, more and more of the nation’s income and wealth has been concentrating at the top. In the late 1970s, the top 1 percent got 9 percent of total income. Now it gets more than 20 percent.

So the problem isn’t that “we’ve” been spending too much. It’s that most Americans have been getting a steadily smaller share of the nation’s total income.

At the same time, the super-rich have been contributing a steadily-declining share of their own incomes in taxes to support what the nation needs — both at the federal and at the state levels.

The coming showdowns and shutdowns must not mask what’s going on. Democrats should make sure the public understands what’s really at stake. 

Yes, of course, wasteful and unnecessary spending should be cut. That means much of the defense budget, along with agricultural subsidies and other forms of corporate welfare.

But America is the richest nation in the world, and “we’ve” never been richer. There’s no reason for us to turn on our teachers, our unionized workers, our poor and needy, and our elderly. The notion that “we” can no longer afford it is claptrap.

Young, College Educated and Jobless. Egypt or America? Oh, for America Add "In Debt" ...

by John Lawrence

The recent revolution in Egypt was fomented due to the large number of young, college educated, unemployed people. But that could never happen here, right? Smug America has this situation completely under control. We're above reproach. But we're not. Almost the same situation exists in the US. Increasingly, there is a surplus of young college educated and unemployed people. There is one significant difference, however. In the US most of them have tens of thousands of dollars of student loan debt to add to their misery. In Egypt, for all the bad things you could have said about the autocratic Mubarak regime, at least college education was free!

President Obama and a lot of other wise people have suggested that the unemployment problem would be solved if only everyone would get a college education. Tell that to the Egyptians. They all got one, and they're still jobless. As the ranks of the US jobless fill up with college educated young people, maybe one day they will stop and realize that this was bogus advice. But the advice the unemployed get is always designed to avert their glance from the real problem: unemployment brought on by technological advance and outsourcing of jobs to countries where labor is cheaper. And the solution they propose - more education - kicks the can down the road and is also designed to strengthen the bottom lines of the for profit education industry and Wall Street which is always more than willing to provide loans and drive people into debt. That's how they make their money. And the kids will not complain about being jobless again until after they get their diplomas and still find themselves jobless. Many with advanced degrees will also be subjected to the indignity of then being told they're "overqualified." At the present time there is more outstanding student loan debt than there is credit card debt.

This is from the Wall Street Journal:

Consumers now owe more on their student loans than their credit cards. Americans owe some $826.5 billion in revolving credit, according to June 2010 figures from the Federal Reserve. (Most of revolving credit is credit-card debt.) Student loans outstanding today — both federal and private — total some $829.785 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com. “The growth in education debt outstanding is like cooking a lobster,” Mr. Kantrowitz says. “The increase in total student debt occurs slowly but steadily, so by the time you notice that the water is boiling, you’re already cooked.” By his math, there is $605.6 billion in federal student loans outstanding and $167.8 billion in private student loans outstanding. He estimates that $300 billion in federal student loan debts have been incurred in the last four years. Partially, this is a story about Americans paying down credit card debt. Some are seeking a new frugality, but many credit card companies are raising minimum monthly payments or cutting off new and existing lines that consumers in the past may have turned to during tough times. Revolving credit, the majority of which is credit card debt, reached a high in September 2008 of $975.7 billion, according to Fed data. A consumer who juggles both credit-card and student-loan debt is likely to pay of the credit-card first, as that debt tends to carry a higher interest rate. In terms of volume, a person is likely to borrow more money to go to school today than, say, spend on necessities using a credit card during a patch of unemployment. Tuition at public and private four-year universities last year went as high as $26,000, with additional fees for housing and books not showing any signs of letting up either. It’s no surprise that many parents, reeling from the downturn, would turn to borrowing to make up the difference. With the cost of education increasing rapidly and the duration of unemployment increasing, perhaps the surprise is that this turning point didn’t hit earlier. Student Loan Justice, a Washington State-based student loan advocacy group issued a statement on the student-loan eclipse, estimating that media coverage of credit cards exceeds coverage of student loans “by a factor of approximately 15-to-1 based on unscientific news surveys conducted since 2007.” But student loan debt, in many ways, is different than credit-card debt. These loans typically can’t be discharged in bankruptcy. They have different repayment terms, some of which can catch some have heavy consequences for borrowers who miss payments and borrowers’ families.

Student loan debt is a ticking time bomb. Not only can an increasing number of recent graduates not find jobs, but their student loans are going into default. When penalties and interest are added in from non-payment, a $30 K loan soon exceeds $100,000. Alan Collinge at studentloanjustice.org has blogged extensively about the lack of consumer protections for student loans. The situation is almost worse than debtors' prisons. Those with student loans lose their right to bankruptcy protection. Their student loans can follow them to the grave and even garnish their social security. Those parents unfortunate enough to have co-signed will now find themselves hounded as well as their offspring.

How did the student loan industry get this way. Most student loans used to be government issued. Collinge writes:

Congress removed bankruptcy protections, refinancing rights, statutes of limitations, truth in lending requirements, fair debt collection practice requirements (for state agencies) and even removed state usury laws from applicability to federally guaranteed student loans. Congress also gave unprecedented powers of collection to the industry, including wage, tax return, Social Security, and Disability income garnishment, suspension of state issued professional licenses, termination from public employment, and other unprecedented collection tools that are used against borrowers for the purpose of collecting defaulted student loan debt. Concurrently, Congress established a fee system for defaulted loans that allows the holders of defaulted loans to keep 20% of all payments from borrowers before any portion of the payment is applied to principal and interest on the loan.  In the absence of fundamental consumer protections, the defaulted borrowers' only available recourse is to submit to a hugely expensive "loan rehabilitation" process whereby they are forced to make extended payments (which are almost never applied to the principal or interest on the loan), and then sign for a new  loan to which additional fees are attached.  This effectively obligates the borrower to a much larger debt than when the loan defaulted, often double, triple, or even more than the original loan amount.   This leaves the borrower in a far more distressed position than before rehabilitation, and more likely to default again.  There are no other options for the borrower to resolve the debt, regardless of any other factors, including the validity of the default itself (there is no appeals process for challenging determinations of default). This fee system and associated rehabilitation schemes have provided a massive revenue stream for a shadowy, nationwide network of politically connected guarantors, servicers, and collection companies who have greatly enriched themselves at the expense of unfortunate borrowers. It has caused immeasurable damage to millions of borrowers and their families, who see what started as an unmanageable debt become a financial cataclysm- that debilitates, marginalizes, and ultimately relegates them to a lifetime of financial servitude and despondency in many cases.

In addition to Sallie Mae, the Department of Education is making money off these "subprime" student loans. Private for-profit colleges and universities are shovelling money out the door to students whom they know never will be able to repay. These defaulted loans follow the person around for the rest of their life making it impossible to redeem their credit rating and ever get a loan again.

When Sallie Mae was privatized, CEO Albert Lord successfully lobbied Congress to take away standard consumer protections from student loans making them the most draconian and predatory kinds of loans out there. Now that President Obama has taken many of these loans back under government auspices, Sallie Mae is still acting as servicer to many of them. As servicer they will continue to exact draconian penalties and do to students the same kind of things that they do when the loans are entirely private. They haven't missed a beat. They can even garnish social security checks!

Wisconsin Still Laboratory of Democracy

Published on Sunday, February 20, 2011 by The Capital Times (Wisconsin)

by John Nichols

On my dad’s side, my ancestors came to Wisconsin in 1823 to mine lead near Mineral Point. My mom’s people arrived a decade later, settling in Wyoming Valley.

I was raised with an outsized regard for Wisconsin, by a mother who made sure we never passed a Wisconsin historical marker without stopping.

So when I say that I have never been prouder of my state than I was last week, when workers rose up to challenge Gov. Scott Walker’s proposal to strip unions of their collective bargaining rights, it is in that context.

I have always argued that Wisconsin leads the nation: We do better, ask little and give much. Our ancestors fought to end slavery, break up the trusts and make our state what Teddy Roosevelt called America’s “laboratory of democracy.”

A week ago, it seemed as if the laboratory was producing something toxic -- an assault on public servants that would quickly spread from Madison to other state capitols where Republican politicians want to use fiscal challenges as an excuse to score political points against unions.

But then Wisconsin pushed backed. Two thousand people rallied Monday. By Tuesday it was 12,000 or more. By Wednesday, 30,000 people surrounded the Capitol. And the demonstrations spread across Wisconsin, from Superior to Kenosha, from Shullsburg to Sturgeon Bay. On Thursday, Democratic state senators made real the promise of representative democracy by refusing to allow the enactment of legislation proposed just six days earlier and that the people clearly opposed.

As David Vines, a UW student who joined the protests, said: “This is what the founders intended.”

He’s right. The people spoke. And the powerful listened -- well, at least some of the powerful.

The struggle is far from finished. But Wisconsin has led once more, and in the right way -- by pushing back against a political power play.

So how will Wisconsin continue to lead? By continuing to employ the rights outlined in the Constitution to assemble freely and petition for the redress of grievances. That’s not just an immediate response to this bill. It needs to be continual -- in the tradition of Robert M. La Follette’s charge that “democracy is a life.” What La Follette meant is that democracy does not end on election day. Democracy begins on election day, as we demand that our representatives respond to the demands of the people.

Two Madison-based groups, Liberty Tree and the Center for Media and Democracy, both of which I’ve supported over the years, have proposed a “Wisconsin Wave” of democratic resistance to attempts to balance budgets on the backs of working people.

“To the giant corporate interests that currently dominate our state, we say that we will not stand by and watch you destroy Wisconsin’s democracy, Wisconsin’s economy, Wisconsin’s schools, and Wisconsin’s communities. We will not pay for your crisis. We will organize. We will march. We will nonviolently resist your policies and overcome your agenda,” reads the call, which can be found online at wisconsinwave.org. We’ll publish the whole call in Wednesday’s Capital Times, just as we’ll continue to cover the story of the democratic struggle to defend our public services and public schools, and the people who make them great.

© 2011 The Capital Times

John Nichols is Washington correspondent for The Nation and associate editor of The Capital Times in Madison, Wisconsin. A co-founder of the media reform organization Free Press, Nichols is co-author with Robert W. McChesney of The Death and Life of American Journalism: The Media Revolution that Will Begin the World Again and Tragedy & Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy. Nichols is also author of Dick: The Man Who is President and The Genius of Impeachment: The Founders' Cure for Royalism.

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From the Front Lines in Madison, WI

Published on Sunday, February 20, 2011 by CommonDreams.org

by Kristine Mattis

As someone who has been involved in the protests in Madison for the past six days, I find the news media coverage of the momentous events in this town to in no way portray the reality of what is going on here. In their attempts to constantly be balanced, the news media seem to have lost all ability to be accurate.

The mass protests by unions and their allies that have occurred in Madison, WI, resulted after an abrupt announcement by Governor Walker late last Friday, Feb. 11, that he was introducing and fast-tracking a so-called “Budget Repair” bill, which would not only deeply cut benefits to public workers, but effectively strip unions of all of their collective bargaining rights. The response to the Governor’s move was rapid and in no way orchestrated or long-planned – there was absolutely no possible time for that. By late Monday, Feb 14, the WI state legislature announced a hearing of the bill in the Joint Finance Committee which was open for public testimony. It was then that unions and affected public sector workers began to try to organize to fight the bill.

Interestingly, members of the public, including myself, arrived early Tuesday morning to have our positions heard in the committee hearing on the bill. When the public testimony began, numerous media outlets were present to cover the proceedings. The media portrayed the hearing as a chance for “both sides” to have their voices heard, as if this were an even dispute between two viewpoints with equally numbered constituents. That was not the case. The clerk’s office documented testimony against the bill versus for the bill to be roughly 20 to 1, at least. Moreover, I know first hand that many of the bill supporters who spoke before and after I did had not been waiting in line with the rest of us. Where did they come from? They seemed to be placed into the queue somehow, conveniently, very early in the day when the media was present. As the proceeding wore on, few if any supporters of the bill were present at all.

These six days of protests have been completely non-violent and peaceful. There have been rumblings that protesters have “trashed” the capitol. That is completely false. Members of unions, particularly the Teaching Assistants’ Association (TAA) and the Milwaukee Graduate Assistants’ Association (MGAA), have been regularly organizing volunteer crews to clean up trash and litter.

As crowds swelled from approximately 13,000 on Tuesday, to around 70,000 (some estimate 100,000) on Saturday, the media finally began to take notice. But curiously, most media outlets only began to show up when the Tea Party announced it plans for a counter-rally on Saturday. Contrary to sources, these Saturday rallies did not consist of a meeting of disputing views in virtually equally numbers, nor were they a “clash.” The Walker supporters numbered roughly 700-1000 at most, while the anti-bill, pro-union activists outnumbered them nearly 100 to 1. Furthermore, there was no violence and no confrontation between opposing sides. (But interestingly, it was the first day that the capitol police posted signs on the capitol building stating “No Firearms Allowed.”) The Tea Party contingent barely made a blip with their paltry turnout.

As far as the actual issue at hand, most media outlets merely mimicked the talking points repeated ad infinitum by Governor Scott Walker, and did no investigating into the veracity of his claims, nor any critical questioning about the situation in Wisconsin. Here are some facts:

1. The state of Wisconsin is not facing a financial crisis. Though specific numbers have been continually disputed and some even claim that the state faces a surplus at the end of the 2009-2011 budget, what is clear is that Wisconsin’s financial woes are moderate at most, and do not constitute a dire situation. The $3.6 billion shortfall that Walker keeps repeating is based on the State Budget Office Analysis which calculated the 2011-2013 biennial figures based on agency requests. These requests always exceed actual monies allocated. The 2011-2013 actual budget has not even come out yet. Walker is misrepresenting these details. Moreover, Governor Walker was unconcerned about budget matters when he offered over $140 million in tax incentives to out-of-state multinational corporations, but now he is suddenly unable to afford to take care of his in-state workforce. The “crisis” is manufactured.

2. The government employee unions bargained for and ratified contracts late last year that provided numerous concessions, including but not limited to freezes in compensation for two years and increased health insurance premiums. Unions are not opposed to “sacrifices”; in fact, they had ALREADY agreed to them.

3. The erosion of collective bargaining rights has nothing at all to do with the contrived “Budget Repair.” Stripping unions of their freedom to negotiate will do nothing to help alleviate deficits.

4. The workers in the private sector have not been voluntarily sacrificing for the public good; pay cuts and loss of benefits have been thrust upon them without any say on their part, precisely because they do not have unions to support them.

5. The rhetoric spewed by the right, such as “I lost my pension, so should you” is akin to saying “My legs were cut off, now yours should be, too.” Unionists would prefer that our legs not be cut off – and we would like to see all non-union workers walking again too. Our battle is for the rights of ALL workers, and our victories are YOUR victories. This is trickle-up economics – and it actually works.

6. Union workers are not lazy slackers; indeed they do some of the most difficult jobs imaginable, such as being home-health care workers, factory laborers, and teachers.

7. The gap between rich and poor started to increase in the 1970s and has reached its widest margin today. Coincidentally, during that same time period, massive tax cuts for corporations and for the wealthy have been mounting.

8. The people who have not sacrificed are the wealthy and corporations. They have the ability to repair these purported budget deficits, yet those who can barely make a decent living are instead called upon to lose what little they have. All the while, Wall Street flourishes and the rich continue to accumulate more and more of the financial wealth of the nation.

9. The struggle in Wisconsin is not about my union or any other union; it is class warfare, plain and simple. It is a battle for decent human rights and against the systematic, concerted and well-orchestrated effort to remove all the rights of workers in this country. Anyone and everyone who makes less than a six-figure income – i.e. the poor and middle class - should be outraged by this immoral and unjust bill and united in our effort to protect our right to a decent living.

Why is it that those who have never had to worry about money, never had to sacrifice, and never had to fight for anything in their lives continually get more and more while working folks get less and less? And why, inexplicably, do other working folks support this race to the bottom?

The corporatization of America has already occurred; now we are well into the third-worldification of America.

We Wisconsin workers are fighting for you and fighting for this country. We must win.

Kristine Mattis is PhD student in the Nelson Institute for Environmental Studies at UW-Madison, and a member of the Teaching Assistants’ Association (TAA), the union of graduate employees. She was also previously a secondary school teacher and a member of the United Teachers of Los Angeles (UTLA). www.rebelpleb.blogspot.com

The Real Reason for Public Finance Crisis

Published on Sunday, February 20, 2011 by The Guardian/UK

If you want to know why we have budget deficits all over, look no further than the roaring success of corporate tax avoidance.

by Richard Wolff

Nothing better shows corporate control over the government than Washington's basic response to the current economic crisis. First, we had "the rescue", then "the recovery". Trillions in public money flowed to the biggest US banks, insurance companies, etc. That "bailed" them out (is it just me or is there a suggestion of criminality in that phrase?), while we waited for benefits to "trickle down" to the rest of us.

As usual, the "trickle-down" part has not happened. Large corporations and their investors kept the government's money for themselves; their profits and stock market "recovered" nicely. We get unemployment, home-foreclosures, job benefit cuts and growing job insecurity. As the crisis hits states and cities, politicians avoid raising corporate taxes in favor of cutting government services and jobs – witness Wisconsin, etc.

Might government bias favoring corporations be deserved, a reward for taxes they pay? No: corporations – especially the larger ones – have avoided taxes as effectively as they have controlled government expenditures to benefit them.

Compare income taxes received by the federal government from individuals and from corporations (their profits are treated as their income), based on statistics from the Office of Management and the Budget in the White House, and the trend is clear. During the Great Depression, federal income tax receipts from individuals and corporations were roughly equal. During the second world war, income tax receipts from corporations were 50% greater than from individuals. The national crises of depression and war produced successful popular demands for corporations to contribute significant portions of federal tax revenues.

US corporations resented that arrangement, and after the war, they changed it. Corporate profits financed politicians' campaigns and lobbies to make sure that income tax receipts from individuals rose faster than those from corporations and that tax cuts were larger for corporations than for individuals. By the 1980s, individual income taxes regularly yielded four times more than taxes on corporations' profits.

Since the second world war, corporations have shifted much of the federal tax burden from themselves to the public – and especially onto the middle-income members of the public. No wonder a tax "revolt" developed, yet it did not push to stop or reverse that shift. Corporations had focused public anger elsewhere, against government expenditures as "wasteful" and against public employees as inefficient.

Organizations such as Chambers of Commerce and corporations' academic and political allies together shaped the public debate. They did not want it to be about who does and does not pay the taxes. Instead, they steered the "tax revolt" against taxes in general (on businesses and individuals alike). The corporations' efforts saved them far more in reduced taxes than the costs of their political contributions, lobbyists' fees and public relations campaigns.

At the same time, corporations also lobbied successfully for many loopholes in the tax laws. The official federal tax rate on profits is now around 35% for large corporations, which theoretically have to pay additional state taxes on their profits and local taxes on their property (land, buildings, business inventories, etc). Those official and theoretical tax obligations have been used to support conservatives' claims that corporations pay half or more of their profits to federal, state and local levels of government combined. However, because of loopholes, the truth is very different. The actual tax payments of corporations, and especially large corporations, are far lower than their official, theoretical obligations.

The most comprehensive recent study of what larger corporations actually pay by three academic accountants – professors at Duke, MIT and the University of North Carolina – gets at that truth. It examined a large sample of corporations. Their average turned out to be a rate of total taxation (federal, state and local combined) below 30 %. The study concluded:

"We find a significant fraction of firms that appear to be able to successfully avoid large portions of the corporate income tax over sustained periods of time. Using a 10-year measure of tax avoidance, 546 firms, comprising 26.3% of our sample, are able to maintain a cash effective tax rate of 20% or less. The mean firm has a 10-year cash effective tax rate of approximately 29.6%."

General Electric (GE) deserves special mention. The New York Times reported that its total tax payment amounted to 14.3% over the last five years. Citizens for Tax Justice corrected that down to 3.4%, as the profits tax it paid in the US. Thus, GE paid a far lower tax rate on its income than most Americans paid on theirs. In 2009, GE received a huge $140bn bailout guarantee of its debt from Washington. By choosing GE's chief executive, Jeffrey R Immelt, to head his economic advisory panel, President Obama effectively rewarded the corporate program: give us more and tax us less.

Corporations repeated at the state and local levels what they accomplished federally. According to the US Census Bureau, corporations paid taxes on their profits to states and localities totaling $24.7bn in 1988, while individuals then paid income taxes of $90bn. However, by 2009, while corporate tax payments had roughly doubled (to $49.1bn), individual income taxes had more than tripled (to $290bn).

If corporations paid taxes proportionate to the benefits they get from government and in fair proportion to what individuals pay, most US citizens would finally get the tax relief they so desperately seek.

© 2011 Guardian News and Media

Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, where he taught economics from 1973 to 2008. He is currently a visiting professor in the graduate program in international affairs of the New School University, New York City. Richard also teaches classes regularly at the Brecht Forum in Manhattan. His most recent book is Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It (2009). A full archive of Richard's work, including videos and podcasts, can be found on his site

more Richard Wolff

Permafrost Melt Soon Irreversible Without Major Fossil Fuel Cuts

Published on Sunday, February 20, 2011 by Inter Press Service

by Stephen Leahy

UXBRIDGE - Thawing permafrost is threatening to overwhelm attempts to keep the planet from getting too hot for human survival.

Ice melts in the source region of China's Yellow River outside of Maduo on the Qinghai-Tibet plateau, known as the "Roof of the World", in 2010. Global warming could cause up to 60 percent of the world's permafrost to thaw by 2200 and release huge amounts of carbon into the atmosphere that would further speed up climate change, a study released Wednesday warned.

Without major reductions in the use of fossil fuels, as much as two-thirds of the world's gigantic storehouse of frozen carbon could be released, a new study reported. That would push global temperatures several degrees higher, making large parts of the planet uninhabitable.

Once the Arctic gets warm enough, the carbon and methane emissions from thawing permafrost will kick-start a feedback that will amplify the current warming rate, says Kevin Schaefer, a scientist at the National Snow and Ice Data Center (NSIDC) in Boulder, Colorado. That will likely be irreversible.

And we're less than 20 years from this tipping point. Schaefer prefers to use the term "starting point" for when the 13 million square kilometres of permafrost in Alaska, Canada, Siberia and parts of Europe becomes a major new source of carbon emissions.

"Our model projects a starting point 15 to 20 years from now," Schaefer told IPS.

The model used a 'middle of the road' scenario with less fossil fuel use than at present. Even at that rate, it found that between 29 and 60 percent of the world's permafrost will thaw, releasing an extra 190 gigatonnes of carbon by 2200. The study is the first to quantify when and how much carbon will be released and was published this week in the meteorological journal Tellus.

"The amount of carbon released is equivalent to half the amount of carbon that has been released into the atmosphere since the dawn of the industrial age," Schaefer said.

The additional carbon from permafrost would increase the average temperatures in the Arctic by eight to 10 degrees C, the study reported. Not only would this utterly transform the Arctic, it would also increase the planet's average temperature by about three degrees C, agrees Schaefer.

And this increase would be on top of the three to six degrees C from continuing to burn fossil fuels over the next 100 years. The Earth's normal average temperature is 14C, so heating up the entire planet another six to nine degrees C would be like increasing our body temperatures from the normal 37C to a deadly fever of 53 to 60 degrees C.

As catastrophic as all this is, Schaefer acknowledges his study underestimates what is likely to happen. The model does not measure methane releases, which are 40 times as potent in terms of warming as carbon. Methane could have a big impact on temperatures in the short term, he says.

"There would be a lot of methane emissions. We're working on estimating those right now," he said.

The model also does not include emissions from the large region of underwater permafrost. IPS previously reported that an estimated eight million tonnes of methane emissions are bubbling to the surface from the shallow East Siberian Arctic shelf every year.

If just one percent of the Arctic undersea methane (also called methane hydrates) reaches the atmosphere, it could quadruple the amount of methane currently in the atmosphere, Vladimir Romanovsky of the University of Alaska in Fairbanks previously told IPS.

Nor does the model account for a process called thermokarst erosion, acknowledges Schaefer. This is a widely observed process where meltwater erodes the permafrost and exposes it to warmer temperatures and speeding up the thaw. "We can't model that yet but it could contribute to major releases of carbon and methane," he said.

None of this has been taken into account by politicians and policy makers looking to cut humanity's carbon emissions with the agreed on target of keeping global temperatures below two degrees C.

Nor is there a wide appreciation for the fact there is no 'reverse gear'. Even if all fossil fuel use stopped today, global temperatures would continue to rise and permafrost would thaw for another 20 to 30 years, Schaefer estimates. And once the permafrost carbon is released, "there is no way to put it back into the permafrost".

Even if there was a way to lower the Earth's human-induced fever, it would take a century or more for thawed permafrost to reform, he said.

Permafrost has been warming and thawing since the 1980s. A 2009 study reported that the southernmost permafrost limit had retreated 130 kilometres over the past 50 years in Quebec's James Bay region. The major loss of sea ice in the Arctic allows the Arctic Ocean to become much warmer, which in turn has increased temperatures of coastal regions an average of three to five degrees C warmer than 30 years ago.

More ominously, large parts of the eastern Arctic were 21C higher above normal for a month in the dead of winter this year, as previously reported by IPS.

However, while on the edge of a most dangerous precipice, there is a safer path available. A new energy analysis demonstrates that fossil fuel energy could be virtually phased out by 2050 while offering comfortable lifestyles for all. The Energy Report by Ecofys, a leading energy consulting firm in the Netherlands, shows that humanity could meet 95 percent of energy needs with renewables utilising today's technologies.

"The Energy Report shows that in four decades we can have a world of vibrant economies and societies powered entirely by clean, cheap and renewable energy and with a vastly improved quality of life," said WWF Director General Jim Leape.

WWF worked on the report with Ecofys.

"The report is more than a scenario – it's a call for action. We can achieve a cleaner, renewable future, but we must start now," Leape said in a statement.

© 2011 IPS North America

The Republican Strategy

by Robert Reich

Thursday, February 17, 2011

The Republican strategy is to split the vast middle and working class – pitting unionized workers against non-unionized, public-sector workers against non-public, older workers within sight of Medicare and Social Security against younger workers who don’t believe these programs will be there for them, and the poor against the working middle class.

By splitting working America along these lines, Republicans want Americans to believe that we can no longer afford to do what we need to do as a nation. They hope to deflect attention from the increasing share of total income and wealth going to the richest 1 percent while the jobs and wages of everyone else languish.

Republicans would rather no one notice their campaign to shrink the pie even further with additional tax cuts for the rich – making the Bush tax cuts permanent, further reducing the estate tax, and allowing the wealthy to shift ever more of their income into capital gains taxed at 15 percent.

The strategy has three parts.

The battle over the federal budget.

The first is being played out in the budget battle in Washington. As they raise the alarm over deficit spending and simultaneously squeeze popular middle-class programs, Republicans want the majority of the American public to view it all as a giant zero-sum game among average Americans that some will have to lose.

The President has already fallen into the trap by calling for budget cuts in programs the poor and working class depend on – assistance with home heating, community services, college loans, and the like.

In the coming showdown over Medicare and Social Security, House budget chair Paul Ryan will push a voucher system for Medicare and a partly-privatized plan for Social Security – both designed to attract younger middle-class voters. 

The assault on public employees

The second part of the Republican strategy is being played out on the state level where public employees are being blamed for state budget crises. Unions didn’t cause these budget crises — state revenues dropped because of the Great Recession — but Republicans view them as opportunities to gut public employee unions, starting with teachers.

Wisconsin’s Republican governor Scott Walker and his GOP legislature are seeking to end almost all union rights for teachers. Ohio’s Republican governor John Kasich is pushing a similar plan in Ohio through a Republican-dominated legislature. New Jersey’s Republican governor Chris Christie is attempting the same, telling a conservative conference Wednesday, “I’m attacking the leadership of the union because they’re greedy, and they’re selfish and they’re self-interested.”

The demonizing of public employees is not only based on the lie that they’ve caused these budget crises, but it’s also premised on a second lie: that public employees earn more than private-sector workers. They don’t, when you take account of their education. In fact over the last fifteen years the pay of public-sector workers, including teachers, has dropped relative to private-sector employees with the same level of education – even including health and retirement benefits. Moreover, most public employees don’t have generous pensions. After a career with annual pay averaging less than $45,000, the typical newly-retired public employee receives a pension of $19,000 a year.

Bargaining rights for public employees haven’t caused state deficits to explode. Some states that deny their employees bargaining rights, such as Nevada, North Carolina, and Arizona, are running big deficits of over 30 percent of spending. Many states that give employees bargaining rights — Massachusetts, New Mexico, and Montana — have small deficits of less than 10 percent.

Republicans would rather go after teachers and other public employees than have us look at the pay of Wall Street traders, private-equity managers, and heads of hedge funds – many of whom wouldn’t have their jobs today were it not for the giant taxpayer-supported bailout, and most of whose lending and investing practices were the proximate cause of the Great Depression to begin with.

Last year, America’s top thirteen hedge-fund managers earned an average of $1 billion each. One of them took home $5 billion. Much of their income is taxed as capital gains – at 15 percent – due to a tax loophole that Republican members of Congress have steadfastly guarded.

If the earnings of those thirteen hedge-fund managers were taxed as ordinary income, the revenues generated would pay the salaries and benefits of 300,000 teachers. Who is more valuable to our society – thirteen hedge-fund managers or 300,000 teachers? Let’s make the question even simpler. Who is more valuable: One hedge fund manager or one teacher?

The Distortion of the Constitution

The third part of the Republican strategy is being played out in the Supreme Court. It has politicized the Court more than at any time in recent memory.

Last year a majority of the justices determined that corporations have a right under the First Amendment to provide unlimited amounts of money to political candidates. Citizens United vs. the Federal Election Commission is among the most patently political and legally grotesque decisions of our highest court – ranking right up there with Bush vs. Gore and Dred Scott.

Among those who voted in the affirmative were Clarence Thomas and Antonin Scalia. Both have become active strategists in the Republican party.

A month ago, for example, Antonin Scalia met in a closed-door session with Michele Bachman’s Tea Party caucus – something no justice concerned about maintaining the appearance of impartiality would ever have done.

Both Thomas and Scalia have participated in political retreats organized and hosted by multi-billionaire financier Charles Koch, a major contributor to the Tea Party and other conservative organizations, and a crusader for ending all limits on money in politics. (Not incidentally, Thomas’s wife is the founder of Liberty Central, a Tea Party organization that has been receiving unlimited corporate contributions due to the Citizens United decision. On his obligatory financial disclosure filings, Thomas has repeatedly failed to list her sources of income over the last twenty years, nor even to include his own four-day retreats courtesy of Charles Koch.)

Some time this year or next, the Supreme Court will be asked to consider whether the nation’s new healthcare law is constitutional. Watch your wallets.

The strategy as a whole

These three aspects of the Republican strategy – a federal budget battle to shrink government, focused on programs the vast middle class depends on; state efforts to undermine public employees, whom the middle class depends on; and a Supreme Court dedicated to bending the Constitution to enlarge and entrench the political power of the wealthy – fit perfectly together.

They pit average working Americans against one another, distract attention from the almost unprecedented concentration of wealth and power at the top, and conceal Republican plans to further enlarge and entrench that wealth and power.

What is the Democratic strategy to counter this and reclaim America for the rest of us?

Protesters in Wisconsin Defy State Government's Attempt to Bust Public Workers' Unions

Published on Thursday, February 17, 2011 by Milwaukee Journal Sentinel

Senate Democrats Boycott Thursday Vote on Walker's Budget Plan

by Jason Stein, Patrick Marley and Steve Schultze

MADISON, WI — Law enforcement officers are searching for Democratic senators boycotting a Senate vote on Gov. Scott Walker's budget-repair plan Thursday in an attempt to bring the lawmakers to the floor to allow Republicans to move forward with action on the bill.

Thousands pack into the State Capitol Wednesday to protest Gov. Scott Walker's budget repair bill for a second consecutive day. (Credit: Tom Lynn)

One Democratic senator said that he believed at least most of the members of his caucus are in another state. At least one, however, Sen. Chris Larson (D-Milwaukee) said he was still in his Capitol office listening to constituents.

In a press conference just off the Senate floor, Senate Majority Leader Scott Fitzgerald (R-Juneau) said that Democrats were "not showing up for work" and that police were searching for them to bring them to the floor.

"That's not democracy. That's not what this chamber is about," Fitzgerald said of the boycott to reporters.

Sen. Tim Cullen (D-Janesville) confirmed Thursday that Democrats are boycotting the Senate action on the bill in efforts to block a quorum and keep the measure from passing. Because 20 senators of the 33-member house are needed to be present to pass a fiscal bill, the body's 19 Republicans will not be enough to pass the budget repair bill without at least one Democrat present.

"They can't pass this bill if there's not a Democrat in the chamber," Cullen said.

Cullen said he believed at least most of the Democrats were now outside Wisconsin, though he declined to say where.

"I think they're all out of state. I am anyway," Cullen said.

Speculation in the Capitol pointed to Illinois as the state where Democrats had headed.

Senate Minority Leader Mark Miller (D-Monona) released a statement calling on Republicans to listen to unions and protesters calling for changes to the bill, which would cut benefits and almost all union bargaining rights for public employees.

"Democrats believe it is wrong to strip people of their right to have a say in the conditions of their employment and to use state law to bust unions," Miller said. "These people deserve to be heard and their rights ought to be respected."

Cullen said Democrats hope delaying the bill will give more time for union demonstrators to win over any possible wavering Republicans. He said the decision was made by other Democrats at a meeting at which he was not present.

Fitzgerald said he believed the last time such an action had happened was in the mid-1990s when the Assembly was at odds over a bill to help finance Miller Park. He said he was not sure how much authority law enforcement officials would have to compel Democrats to show up.

The tactic wasn't winning over Sen. Rob Cowles (R-Green Bay), a moderate whom unions had been trying to court to vote against the bill. Cowles called the blockage of the Senate vote an attempt to "shut down democracy."

The Senate convened at 11:30, with 17 Republicans but no Democrats present. After a prayer and the pledge of allegiance, action was immediately disrupted by demonstrators in the gallery shouting, "Freedom, democracy, unions."

Senate President Mike Ellis (R-Neenah) made a call of the house to bring the three additional senators needed to vote on the bill to the Senate floor.

If a Democrat does show up for the vote, a handful of GOP senators will decide the fate of Walker's bill.

The Senate is meeting amid massive demonstrations that have so packed the Capitol that movement outside the Senate chambers is difficult at best.

Spokesmen for the Republican governor and Senate Majority Leader Scott Fitzgerald (R-Juneau) said they were confident that the GOP lawmakers had the votes they needed to pass the bill without further changes. Walker has said that the proposal's cuts to worker benefits and to decades-old union bargaining laws are needed to help balance the state's gaping budget shortfall in this year and the next two.

Republicans control the Senate 19-14, meaning they can lose only two votes and still pass the bill if all Democrats oppose it. Some Republicans have shown reluctance about the bill, though so far none have said publicly that they will vote against it.

Even after voting for the proposal in the Legislature's budget committee just before midnight Wednesday, Sen. Luther Olsen (R-Ripon) showed his concern about the effects of the proposal on workers.

"I will probably vote for it" on the Senate floor, Olsen said.

On a 12-4 party-line vote Wednesday, the Joint Finance Committee added new civil-service protections for local government employees and kept cuts to public worker benefits. The budget committee began debating the bill at 7:45 p.m. Wednesday, after Republicans spent hours behind closed doors crafting the changes. The Senate and Assembly could now act on it as early as Thursday.

"This will pass in that form," Fitzgerald said.

His brother, Assembly Speaker Jeff Fitzgerald (R-Horicon), said he also expected the Legislature to accept the changes the committee adopted and not make any further ones.

Some senators attempted to make significant changes to the bill Wednesday, but it appeared their efforts had failed.

The changes the committee adopted would require all local governments to create civil-service systems similar to the one for the state. It would also allow limited-term employees to keep their benefits. Some limited-term employees have worked for the state for years, and the original version of the bill would have taken away all their health care coverage and retirement benefits.

The debate in the committee was impassioned and at times emotional.

"People have said they're willing to sacrifice. Why are we going after people's rights?" asked Rep. Tamara Grigsby (D-Milwaukee).

But Rep. John Nygren (R-Marinette), whose wife is a teacher, said he believed the bill was needed to ensure schools are run efficiently.

"What about the right of the taxpayer to run a frugal school district?" Nygren said.

The changes did not appease the thousands of teachers and state workers who have filled the Capitol for two days.

They booed loudly as they learned the bill still would take away their union rights as they watched the committee proceedings on televisions mounted in the Capitol Rotunda.

"I think it's disgusting," said John Bausch, a Darlington music teacher in elementary and middle school.

"This is not what Wisconsin is all about. We've had collective bargaining for (50) years and to throw it all out without our say is a disgrace."

More are expected to come to the Capitol after Mary Bell, president of the Wisconsin Education Association Council, urged teachers and other Wisconsin residents to come to Madison on Thursday and Friday. She stopped short of asking teachers to walk off their jobs.

In Milwaukee, Superintendent Gregory E. Thornton said teachers are expected to be at work Thursday and Friday, and failure to do so, without a valid excuse, will result in disciplinary action.

WEAC's effort came as Madison schools closed Wednesday because more than 40% of teachers called in sick so they could lobby legislators. Madison schools will be closed Thursday for the same reason. Other districts also were considering closing.

Walker, who proposed the bill, said he was "disappointed" with the action by the Madison teachers and that he appreciates that other public employees are showing up for work. He said he respects workers' right to demonstrate but that he is "not intimidated into thinking that they're the only voices out there."

In a sign of the national attention the proposal is drawing, U.S. Secretary of Education Arne Duncan has scheduled a telephone call with Walker for Thursday, said Jim Bradshaw, a spokesman for the federal agency. The Associated Press reported Duncan said Wednesday at a Denver conference of teacher unions and school administrators that the move in Wisconsin and other states to strip teachers of bargaining rights worries him.

In an interview with WTMJ-TV (Channel 4), President Barack Obama said public workers have to be prepared to make concessions but that he thought Walker's plan was unduly harsh on unions.

Walker offered the bill to help shore up the state's finances in advance of a budget to be delivered Tuesday that is expected to include major cuts in areas like aid to local schools and governments.

He first wants the budget repair bill passed to help clear up a $137 million budget shortfall for the fiscal year ending June 30 and ease solving a deficit of more than $3 billion over the next two years. The cuts to benefits would save taxpayers nearly $330 million through mid-2013.

Major elements of the budget-repair bill remain in place. It would require most public workers to pay half their pension costs - typically 5.8% of pay for state workers - and at least 12% of their health care costs. It applies to most state and local employees but does not apply to police, firefighters and state troopers, who would continue to bargain for their benefits.

Except for police, firefighters and troopers, raises would be limited to inflation unless a bigger increase was approved in a referendum. The non-law enforcement unions would lose their rights to bargain over anything but wages, would have to hold annual elections to keep their organizations intact and would lose the ability to have union dues deducted from state paychecks.

The most significant change the Joint Finance Committee approved would require local governments that don't have civil-service systems to create an employee grievance system within months. Those local civil-service systems would have to address grievances for employee termination, employee discipline and workplace safety.

The bill also gives Walker's Department of Health Services the power to write rules that would change state laws dealing with medical care for children, parents and childless adults; prescription drug plans for seniors; nursing home care for the elderly; and long-term care for the elderly and disabled outside of nursing homes.

The programs that could see changes under the proposal would include the BadgerCare Plus and BadgerCare Core plans, Family Care and SeniorCare.

Lawmakers planned to modify the bill so that the Walker administration could drop people from BadgerCare Plus because of having too high an income temporarily, but not permanently. Current income eligibility standards would be restored on Jan. 1, 2015, under the changes the committee adopted.

The bill was also amended to allow the Walker administration to sell or lease state-owned heating plants but first require a review of any deals by the Joint Finance Committee.

Separate from the committee's action, individual lawmakers are hoping to make other changes to the bill.

Two GOP sources familiar with internal talks said Sens. Dale Schultz (R-Richland Center) and Van Wanggaard (R-Racine) were backing a plan to put at least some union bargaining rights back into the bill. One source said the plan would make use of devices such as sunset clause to bring back certain bargaining rights in future years.

Schultz acknowledged he was working on alternatives, though he said he couldn't comment on any details. He said he was headed to his home and expected to find both protesters and law enforcement protection there.

"Everything is a work in progress and everything is fluid and there are no lines drawn in the sand," Schultz said. "Obviously, it's a very emotional time for us."

Wanggaard sent out a statement after the budget committee action saying he would vote for the bill as amended by the panel.

"'In a democracy, making law is like making sausage.' I never fully understood that statement until this week," Wanggaard said. "No compromise is perfect, but I am thankful that the bill has been substantially modified to add additional worker protection."

Before the committee met Wednesday, Walker told reporters he still had the votes to pass the proposal without changes.

"We're willing to (make changes), but we're just not going to fundamentally undermine the principle of the proposal, which is to let not only the state but local governments balance their budgets," he said.

The committee debated the bill Wednesday night after holding a 17-hour public hearing on it that ended at 3 a.m. Wednesday. Hundreds of people were still registered to speak when Republicans halted the hearing.

Democratic lawmakers then started an impromptu hearing of their own. They were still taking testimony as of 10 p.m. Wednesday - 36 hours after the official hearing started.

© 2010 Journal Sentinel

Why We Should Raise Taxes on the Super-Rich and Lower Them on the Middle Class

by Robert Reich

Tuesday, February 15, 2011

My proposal to raise the marginal tax to 70 percent on incomes over $15 million, to 60 percent on incomes between $5 million and $15 million, and to 50 percent on incomes between $500,000 and $5 million, has generated considerable debate. Some progressives think it’s pie-in-the-sky. Here, for example, is Andrew Leonard, a staff writer for Salon:

A 70 percent tax bracket for the richest Americans is pure fantasy – even suggesting it represents such a fundamental disconnect with the world as it exists today that it is hard to see why it should be taken seriously. I would be deeply worried about the sanity of a Democratic president who proposed such a thing.

Fantasy? I don’t know Mr. Leonard’s age but perhaps he could be forgiven for not recalling that between the late 1940s and 1980 America’s highest marginal rate averaged above 70 percent. Under Republican President Dwight Eisenhower it was 91 percent. Not until the 1980s did Ronald Reagan slash it to 28 percent. (Many considered Reagan’s own proposal a “fantasy” before it was enacted.)

Incidentally, during these years the nation’s pre-tax income was far less concentrated at the top than it is now. In the mid-1970s, for example, the top 1 percent got around 9 percent of total income. By 2007, they got 23.5 percent. So if anything, the argument for a higher marginal tax should be even more realistic now than it was during the days when it was taken for granted.

A disconnect with the world as it exists today? That’s exactly the point of proposing it. For years progressives have whined that Democratic presidents (Clinton, followed by Obama) compromise with Republicans while Republican presidents (Reagan through W) stand their ground – with the result that the center of political debate has moved steadily rightward. That’s the reason the world exists the way it does today. Isn’t it about time progressives had the courage of our conviction and got behind what we believe in, in the hope of moving the debate back to where it was?

Would a Democratic president be insane to propose such a thing? Not at all. In fact, polls show an increasing portion of the electorate angry with an insider “establishment” – on Wall Street, in corporate suites, and in Washington – that’s been feathering its nest at the public’s expense. The Tea Party is but one manifestation of a widening perception that the game is rigged in favor of the rich and powerful.

More importantly, it will soon become evident to most Americans that the only way to reduce the budget deficit, preserve programs deemed essential by the middle class, and not raise taxes on the middle, is to tax the top.

In fact, a Democratic president should propose a major permanent tax reduction on the middle class and working class. I suspect most of the public would find this attractive. But here again, the only way to accomplish this without busting the bank is to raise taxes on the rich.

Republicans have done a masterful job over the last thirty years convincing the public that any tax increase on the top is equivalent to a tax increase on everyone — selling the snake oil of “trickle down economics” and the patent lie that most middle-class people will eventually become millionaires. A Democratic president would do well to rebut these falsehoods by proposing a truly progressive tax.

Will the rich avoid it? Other critics of my proposal say there’s no way to have a truly progressive tax because the rich will always find ways to avoid it by means of clever accountants and tax attorneys. But this argument proves too much. Regardless of where the highest marginal tax rate is set, the rich will always manage to reduce what they owe. During the 1950s, when it was 91 percent, they exploited loopholes and deductions that as a practical matter reduced the effective top rate 50 to 60 percent. Yet that’s still substantial by today’s standards. The lesson is government should aim high, expecting that well-paid accountants will reduce whatever the rich owe.

Besides, the argument that the nation shouldn’t impose an obligation on the rich because they can wiggle out of it is an odd one. Taken to its logical extreme it would suggest we allow them to do whatever antisocial act they wish – grand larceny, homicide, or plunder – because they can always manage to avoid responsibility for it.

Some critics worry that if the marginal tax is raised too high, the very rich will simply take their money to a more hospitable jurisdiction. That’s surely possible. Some already do. But paying taxes is a central obligation of citizenship. Those who take their money abroad in an effort to avoid paying American taxes should lose their American citizenship.

Finally, there are some who say my proposal doesn’t stand a chance because the rich have too much political power. It’s true that as income and wealth have moved to the top, political clout has risen to the top as well.

But to succumb to cynicism about the possibility of progressive change because of the power of those at the top is to give up the battle before it’s even started. Haven’t we had enough of that?

Former Trustee: Why Social Security Isn’t a Problem

Published on Thursday, February 17, 2011 by RobertReich.org

Budget Baloney (1): Why Social Security Isn’t a Problem for 26 Years, and the Best Way to Fix It Permanently

by Robert Reich

New Jersey Governor Chris Christie, a Republican presidential hopeful, says in order to “save” Social Security the retirement age should be raised. The media are congratulating him for his putative “courage.” Deficit hawks are proclaiming Social Security one of the big entitlements that has to be cut in order to reduce the budget deficit.

Social Security isn’t responsible for the federal deficit. Just the opposite. Until last year Social Security took in more payroll taxes than it paid out in benefits. It lent the surpluses to the rest of the government. Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.

This is all baloney.

In a former life I was a trustee of the Social Security trust fund. So let me set the record straight.

Social Security isn’t responsible for the federal deficit. Just the opposite. Until last year Social Security took in more payroll taxes than it paid out in benefits. It lent the surpluses to the rest of the government.

Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.

But why should there even be a problem 26 years from now? Back in 1983, Alan Greenspan’s Social Security commission was supposed to have fixed the system for good – by gradually increasing payroll taxes and raising the retirement age. (Early boomers like me can start collecting full benefits at age 66; late boomers born after 1960 will have to wait until they’re 67.)

Greenspan’s commission must have failed to predict something. But what? It fairly accurately predicted how quickly the boomers would age. It had a pretty good idea of how fast the US economy would grow. While it underestimated how many immigrants would be coming into the United States, that’s no problem. To the contrary, most new immigrants are young and their payroll-tax contributions will far exceed what they draw from Social Security for decades.

So what did Greenspan’s commission fail to see coming?

Inequality.

Remember, the Social Security payroll tax applies only to earnings up to a certain ceiling. (That ceiling is now $106,800.) The ceiling rises every year according to a formula roughly matching inflation.

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security’s long-term (beyond 26 years from now) problem would be solved.

So there’s no reason even to consider reducing Social Security benefits or raising the age of eligibility. The logical response to the increasing concentration of income at the top is simply to raise the ceiling.

Not incidentally, several months ago the White House considered proposing that the ceiling be lifted to $180,000. Somehow, though, that proposal didn’t make it into the President’s budget.

© 2010 Robert Reich

"What's Disgusting? Union Busting!" Chant Wisconsin Crowds That Swell to 30,000; Key GOP Legislators Waver

Published on Thursday, February 17, 2011 by The Nation

by John Nichols

"I have never been prouder of our movement than I am at this moment,"  shouted Wisconsin AFL-CIO President Phil Neuenfeldt, as he surveyed the crowds of union members and their supporters that surged around the state Capitol and into the streets of Madison Wednesday, literally closing the downtown as tens of thousands of Wisconsinites protested their Republican governor’s attempt to strip public employee unions of their collective bargaining rights.

Where Tuesday’s mid-day protests drew crowds estimated at 12,000 to 15,000, Wednesday's mid-day rally drew 30,000, according to estimates by organizers.  Madison Police Chief Noble Wray, a veteran of 27 years on the city’s force, said he had has never see a protest of this size at the Capitol – and he noted that, while crowd estimates usually just measure those outside, this time the inside of the sprawling state Capitol was “packed.”
On Wednesday night, an estimated 20,000 teachers and their supporters rallied outside the Capitol and then marched into the building, filling the rotunda, stairways and hallways. Chants of "What's disgusting? Union busting!" shook the building as legislators met in committee rooms late into the night.

 

 
Protestors to Wisconsin Gov. Scott Walker's proposal to eliminate collective bargaining rights for many state workers demonstrate in at the State Capitol in Madison, Wis., Wednesday, Feb. 16, 2011. (AP Photo/Andy Manis)

The country was starting to take notice, as broadcast and cable-news satellite trucks rolled into town. The images they captured were stunning, as peaceful crowds filled vast stretches of the square that surrounds the seat of state government.

Republican legislators -- who had been poised to pass the governor’s plan Thursday, and might yet do so  – were clearly paying attention. Two GOP senators broke with the governor, at least to some extent. Dale Schultz from rural southeastern Wisconsin and Van Wanggaard from the traditional manufacturing center of Racine, proposed an alternative bill that would allow limit bargaining rights for public employees on wages, pensions and health care for the next two years but allow them to continue to bargain on other issues.

While that’s hardly an attractive prospect to state workers – as it would also require them to make significantly higher pension and health-care contributions –  the measure rejects the most draconian component’s of the governor’s plan. Other Republicans resisted the proposal, however, offering only minor amendments to the governor's plan.

If Schultz and Wanggaard actually vote "no" Thursday, when the measure is to be taken up, just one more Republican senator would have to join them in order to block the bill.

That the first real movement by Republicans came after Wednesday’s rally was hardly surprising, as few state capital’s have seen the sort of mobilization that occurred at mid-day, and that is likely to reoccur at nightfall as teachers from across the state are expected to pour into the city for a rally and candlelight vigil.

In some senses, Wednesday’s remarkable rally began Tuesday evening, when Madison Teachers Inc., the local education union, announced that teachers would leave their classrooms to spend the day lobbying legislators to “Kill the Bill” that has been proposed by newly-elected Republican Governor Scott Walker.

The teachers showed up en masse in downtown Madison Wednesday morning.

And then something remarkable happened.

Instead of taking the day off, their students gathered at schools on the west and east sides of Madison and marched miles along the city’s main thoroughfares to join the largest mass demonstration the city has seen in decades – perhaps since the great protests of the Vietnam War era.

Thousands of high school students arrived at the Capital Square, coming from opposite directions, chanting: “We support our teachers! We support public education!”

Thousands of University of Wisconsin students joined them, decked out in the school’s red-and-white colors.

Buses rolled in from every corner of the state, from Racine and Kenosha in the southeast to Green Bay in the northeast, from La Crosse on the Mississippi River to Milwaukee on Lake Michigan.

Buses and cars arrived from Illinois and Minnesota and as far away as Kansas, as teachers and public employees from those states showed up at what American Federation of State, County and Municipal Employees union president Gerald McEntee says is “ground zero “in the struggle for labor rights in America.

The moms and dads of the elementary school kids came, and the kids, carrying hand-lettered signs:

“I love my teacher!”

“Scott Walker needs to go back to school!”

“Scott Walker needs a time out!”

And, “We are Wisconsin!

“I’ve been here since the 1960s, I’ve seen great demonstrations,” said former Mayor Paul Soglin, a proud former student radical who was nominated for a new term in Tuesday’s local primary election. “This is different. This is everyone – everyone turning out.”

Everyone except the governor, who high-tailed it out of town, launching a tour of outlying communities in hopes of drumming up support for his bill. Most of the support Walker was getting was coming from national conservative political groups, such as the Club for Growth, which have long hoped to break public-employee unions. But the governor held firm, saying after a day of unprecedented protests – in Madison and small towns and cities across the state – that he still wanted to pass his bill. He’s got strong support in the overwhelmingly Republican Assembly. But he cannot afford to lose one more Republican state senator. And the unions and their backers are determined to find that one Republican who is smart enough and honest enough to recognize that the governor's assault of public employees is an assault on Wisconsin itself.
 
The state's largest teachers union, the Wisconsin Education Association Council has called on its 98,000 members to come to rally in their hometowns and then come to the Capitol. "All citizens of Wisconsin should come to Madison!" reads the call. Tens of thousands will come. The state, county and municipal employees will come. The nurses will come. The small business owners will come. The parents and students will come. They will ask the question: "What's disgusting?" And they will answer with a roar: "Union busting!"

© 2011 The Nation

Corporations Use TV Ads to Lie About Their Real Motives

by John Lawrence

There's an ad on TV that features a righteously indignant woman who doesn't want the government telling her what food products to buy at her local super market. She claims to be fully capable of making those decisions for herself. And she particularly doesn't want the government taxing certain foods making them more expensive. She claims to be fully in charge of her purchases and she has the right to buy whatever she wants regardless of the health consequences. This ad is sponsored by a group called "Americans Against Food Taxes," and was run during the Super Bowl.

Just who are these "Americans Against Food Taxes" and where do they get the money to run ads during the Super Bowl? Well, it turns out that they are the purveyors of junk food and soda. If you click on "About Us" and then "Coalition Members," you find that they are 7-Eleven, Inc., Coca-Cola, Pepsi-Cola, the American Beverage Association, Americans for Prosperity, Burger King Corporation, Domino's Pizza, Dr Pepper Snapple Group, Jack in the Box, Dairy Queen, National Association of Theatre Owners, Mini Mart, McDonald's, National Supermarket Association, National Beverage Association, Red Bull North America Inc., Salt Institute, Snack Food Association, and even Ron's Towing! (I think Ron's Towing was put in there just to make it look good.) There are literally hundreds of groups and associations listed. Not many average Americans though (other than Ron's Towing) who are outraged by the government telling them what to do.

What do all these coalition members have in common? Not a concern for the health of the American people - that's for sure. No, what they all have in common is the profit motive. They know that if Americans reduce their consumption of sugary soft drinks and junk food, they will lose money. It turns out that there is a lot of money in pizza and hamburgers. Notably absent from the list is Starbucks, Subway and any doctors' or nurses' associations. Tom Monaghan, Domino's Pizza Founder, is a billionaire. The wife of the founder of McDonald's, Joan Kroc, was a billionaire when she died in 2003.

There is a lot of money in junk food which is composed of the dietary groups of sugar, salt and fat. The Americans Against Food Taxes are primarily beverage makers, purveyors of tasty crap and convenience stores whose stock in trade is junk food. Anything which educates Americans about nutrition and discourages them from eating junk food would reduce their profit margins so naturally they're against it. Obviously, the government must be at fault for trying to discourage Americans from consuming soft drinks. Recently, even diet sodas were found to contribute to heart attacks and strokes. And fast food, which is cheap, is marketed to the poorest people who then fall victim to obesity and diabetes.

Scientific American reported:

Scientists writing in the current issue of the Lancet report that study participants who visited fast food restaurants twice a week or more gained 10 more pounds and experienced double the increase in insulin resistance compared to subjects who indulged less than once a week. "While there have been many discussions about fast food's effects on obesity, this appears to be the first scientific, comprehensive long-term study to show a strong connection between fast-food consumption, obesity, and risk for type 2 diabetes," comments study co-author Mark Pereira of the University of Minnesota.

Michelle Obama has gone on a one woman campaign against junk food for children in order to reduce childhood obesity. Her campaign, "Let's Move," has drawn ire from the right wing and such groups as Americans Against Food Taxes. Glenn Beck has suggested that Michelle Obama's initiative would lead to people being jailed for eating French fries. Limbaugh claimed that callers to his show will soon be monitored by the food police. Sean Hannity said that the First Lady is "taking the nanny state to a new level." Funny how the right wing always sides with ignorance when enlightenment means that corporate bottom lines might be affected.

The truth is that corporations prey on the ignorance of the American population when it comes to nutrition and finance in particular. If these subjects were taught in school, Americans would be a lot healthier both in their physical bodies and their pocket books. But people aren't taught to resist TV advertising and to choose and use products wisely. Critical thinking to resist advertising, whose goal is to get you to part with your money in order to increase corporate profits, should be taught in public schools. Health care costs would go down as a consequence. Right wing corporations have a lot of money to run TV ads denouncing any attempts by government to look out for the health and well-being of the American people. Where are the ads encouraging Americans to eat healthy and to reduce their consumption of fast food and soda? Maybe the government should run them. That would really frost the Americans Against Food Taxes. So Be It, as John Boner would say.

An article titled "Healthy-eating advocates seek ways to fight advertising promoting unhealthy food and drinks to kids" said the following:

CLEVELAND, Ohio — Do our kids really stand a chance? From the minute they wake up until the moment they go to bed, they are bombarded with messages pushing unhealthy foods and drinks. It's a fully integrated, cross-platform, cross-promotional media assault. Although a number of major food manufacturers made changes in 2006, consider the many ways they get to our children: • Commercials for sugar-laden cereal still monopolize early-morning cartoons. • Billboards and radio ads blare specials for double-decker burgers and extra-large fries. • School parent-teacher groups push sales of Market Day products, such as 10-inch deep-dish apple pies and breaded mozzarella sticks. • Post cereal boxes direct kids to the Internet to play games aligned with their sugar-sweetened brands. • The checkout lines at grocery stores, pharmacies, big-box discount stores and even Home Depot are lined with sugary treats, many at kid's-eye level. Science has yet to prove indisputably that food marketing is a direct cause of the climbing childhood obesity rate. But with one in every three U.S. youngsters ages 2 to 19 overweight or obese, food marketing to children is coming under increasing scrutiny. Healthy-food advocates and many parents argue that the abundance of media messages for unhealthy foods is making it ever more difficult for impressionable young minds to resist the temptations -- and for parents to say no. At the same time, the advertising world insists it has the right to sell products, and that parents must take responsibility and oversee their children's media consumption and food choices. Virtually all of the more than $1.6 billion that advertisers spend annually on youth-directed marketing is for processed, manufactured foods, such as baked goods, candy, frozen desserts and breakfast cereals. Only a very small percentage -- less than 1 percent -- is for healthful foods, such as fresh fruits and vegetables. So says a report by the Federal Trade Commission to Congress in 2008 on spending by 44 leading food and beverage companies.

TV advertising is a particularly pernicious and insidious activity which needs to be resisted. It should be the focus of teaching critical thinking in schools. Physical activity needs to be encouraged in schools instead of being cut from curricula. Americans need to be educated in how to live for their own well-being instead of being educated to be cogs in some ever-increasing-in-intensity rat race. And the government should be on the side of the average American instead of on the side of corporate lobbyists.

Demonstrations Spread from Egypt To Wisconsin – Teachers Go on Strike, Guard Called In

by Doug Porter on February 16, 2011, from OB Rag

in: American Empire, Civil Disobedience, Labor, Organizing, Popular

Protestors at Wisconsin Capitol, February 15, 2011

Fifteen thousand Wisconsin workers and their supporters rallied at the state capitol in Madison on Tuesday to protest legislation aimed at both public employee and private sector union activity.  Teamsters, teachers, university workers, nurses, high school students, and state workers of all kinds flooded the streets and the capitol grounds. The crowd cheered as firefighters showed their solidarity. Five hundred students walked out of Madison East High School to join the demonstration. Seven hundred protestors staged an overnight sleep-in in the Capitol Building.

Recently elected Republican (and Tea Party darling) Governor Scott Walker has wasted no time since his inauguration in advancing legislation to make it illegal for public sector workers to bargain on anything other than wages.  The bill would make it easier to get rid of public sector unions by mandating annual votes of the membership. And it would allow private sector employers to fire workers who are trying to organize unions. To make his point perfectly clear, the Governor has threatened to call out the National Guard to take anyone’s job that refuses to go along.

Wisconsin Governor Scott Walker

Tuesday was the second day in a row of demonstrations, and those union members and their supporters say they’ll be back again Wednesday and every day for as long as it takes to make their voices heard and stop Governor Walker’s budget bill. The crowds in Madison are expected to swell Wednesday, as city schools are closing, with teachers taking sick days to join the protests.

The protests, unprecedented in recent Wisconsin history, are being organized by union—the American Federation of State County and Municipal Employees, the Wisconsin Education Association, the American Federation of Teachers-Wisconsin and others—in anticipation of a Thursday vote on whether to give the governor powers that the senior member of the state legislature describes as nothing short of dictatorial.

Many of those who showed up for one of the first of what are expected to be days of ever-expanding protests borrowed themes language and themes from the crowds that filled the streets of Cairo and other Egyptian cities to call for the end of President Hosni Mubarak’s dictatorial reign.  Signs at Tuesday’s rally referred to the governor as “Hosni Walker” and declared: “Protest Like an Egyptian.”

Another asked: “If Egypt Can Have Democracy, Why Can’t Wisconsin?”

 

Where to Find a Trillon Dollars

Published on Tuesday, February 15, 2011 by TalkingPointsMemo

by William Hartung

Even by Washington standards, a trillion dollars is a lot of money. That's approximately the figure for the cumulative savings President Obama wants to extract from proposed federal budgets over the next ten years. While some of the money would come from closing tax loopholes and increasing the burden on individuals earning more than $250,000 per year, the bulk of it would come from domestic discretionary spending - everything from low income heating assistance to accelerated interest payments on college loans. In all, the Obama administration's freeze on non-security-related discretionary spending would result in $400 billion in reductions over the next five years. These cuts will be painful, and they will be felt in every middle- and lower-income household in America.

By contrast, the Pentagon will barely be touched. In fact, the $553 billion proposal for the agency's base budget announced by the Obama administration today is a 4% increase from current levels. And the highly touted $78 billion in Pentagon "cuts" Secretary of Defense Robert Gates has called for over the next five years are essentially a slowing in the rate of growth of Pentagon spending. As Christopher Preble of the Cato Institute has suggested, only in Washington, DC can a spending increase be described as a "cut."

So what is to be done? We need to make sensible cuts in Pentagon spending that will address the long-term deficit problem without undermining our security. Doing so would take a lot of pressure off of domestic programs, allowing for milder cuts -- or even no cuts at all -- depending upon one's feelings about what level of deficit reduction is needed over the next decade.

The Sustainable Defense Task Force, a network of over a dozen experts (including yours truly) that was brought together last spring to address the issue of deficits and defense spending has made proposals for nearly $1 trillion in reductions in Pentagon spending over the next decade - a number comparable to the $1.1 trillion in budget savings on domestic programs contained in the Obama budget. With military spending running at post-World War II record levels in recent years, and with a steady rise for the past fourteen years, this is eminently reasonable. It is even more so when one considers that the United States spends roughly what the rest of the world combined spends for military purposes, and that the main threats out there - from Al Qaeda to nuclear proliferation - can't be meaningfully addressed by building more long-range missiles, combat ships, fighter planes, or aircraft carriers. In short, many of the most expensive items in the Pentagon' s procurement budget are irrelevant to the most urgent threats we face.

Among the items that can be cut without harming our security:

•The $238 billion Joint Strike Fighter program: Cancelling the program and relying instead on upgraded versions of current aircraft would save almost $50 billion over ten years.

•The MV-22 Osprey: Replacing this dangerous, overpriced, and underperforming aircraft with cheaper alternatives would save over $10 billion over ten years.

•Reducing the number of U.S. troops in Europe and Asia to 100,000 from current levels of 150,000 would save $80 billion over a decade.

•Reforming Pentagon health care systems so that retirees pay modest, reasonable premiums could save $60 billion over a decade.

•Scaling back missile defense and space weapons programs could save over $50 billion over a decade.

•Further reductions in the U.S. nuclear arsenal, including deployment of fewer ballistic-missile launching submarines, could save over $100 billion in a ten year period, much of it in operating costs.

•Reducing the size of the Navy from 286 to 230 ships would save over $125 billion over ten years.

These are not radical proposals. They would average out to about $100 billion per year in cuts from a military budget that has doubled since President George W. Bush took office. In addition to the question of how relevant traditional weapons systems are to fighting terrorism and the spread of nuclear weapons, the sheer size and capabilities of U.S. forces allow for significant cuts. As Secretary of Defense Robert Gates has noted, the U.S. Navy is larger than the next 13 largest navies in the world combined, and a 11 of those are U.S. allies. And under current plans the U.S. will have an overwhelming advantage over China in top-of-the-line fighter planes for the foreseeable future, perhaps up to a 20 to 1 edge as of 2020.

© 2011 TPM Media LLC

Obama's Budget Pits Him Against His Own Life Story

by Sam Stein, Huffington Post

First Posted: 02/14/11 05:51 PM Updated: 02/14/11 05:51 PM

WASHINGTON -- The budget introduced by the Obama administration on Monday is notable not only for the cuts suggested or investments proposed, but also for the message it conveys about the political identity of the president himself.

Aiming to cut the annual deficit by more than $1 trillion over the next decade, President Barack Obama chose to slash across the board. But the most glaring cuts were not to a bloated defense budget, or to entitlement programs that both parties say are in need of reform. Rather, they were to programs and policies that are at the heart of Obama's personal story.

A former community organizer in Chicago, Obama proposed a 50-percent cut to a $700-million community-service block grant program. A former lawyer who touted his work to improve living conditions for the poor, Obama proposed a sharp cut in energy assistance for low-income families. A graduate-school alumnus who only recently, and quite publicly, was able to pay off his debts, Obama proposed refiguring loan programs so that students would accrue interest even while they're enrolled.

Combined, the new policies and cuts carry more symbolic than fiscal significance. They would save only a pinch of money from being added to the deficit. But that may well be the point. Senior administration officials, in previewing the budget, didn't downplay or hide any of the above provisions -- either by spinning their impact or obscuring their language. Rather, they were part of the big pitch. Office of Management and Budget Director Jacob Lew made a point of saying on CNN's "State of the Union" that it was "not easy" to cut those programs on which "President Obama worked [as] a community organizer."

Even administration allies who were gloomy about the cuts admitted that they made for solid politics.

"It tells you he is making a statement," said Andy Stern, the former president of the Service Employees International Union, a longtime Obama supporter and a member of the president's fiscal commission. "It is shared sacrifice ... They stuck their chin right out asked people to hit them, and they are being hit. But it is with the intention, particularly with independent voters, of appreciating that no one is immune from being hurt here."

But if the goal was to present an image of a president putting himself through personal pains, not everyone got the message. Hours after the budget was formally released, Republicans insisted that it was too limited and unworthy of serious consideration.

Progressives, meanwhile, noted that while Obama was slashing money for community-service grants and energy assistance for the poor, he was calling for a lot less give from the other side of the income distribution. Not only had the president signed an extension of the Bush-era tax cuts for the wealthy during the lame-duck session, his budget brought a yet-to-be-enacted bank tax down from an initial proposal of $90 billion over 10 years to about $30 billion.

"I think if they were going to go the 'these cuts will hurt me as much as they hurt you' route, they should have gone into some middle-class programs and not just 'poor people' programs," a senior Democratic official said.

Not everyone in progressive circles, however, jumped to trash the president's plan. There is, some Obama allies said, more nuance to some of the proposed cuts.

Jerry Kellman, a social activist who mentored Obama during his community-organizing days, noted that with community-service grants, much of the money doesn't end up in the hands of groups that do on-the-ground work, but rather with municipal governments which spend it on a variety of projects. Far more stressful, he said, were the cuts to the Low Income Home Energy Assistance Program, which Obama officials have defended as a simple adjustment to the drop in commodity prices. But even then, Kellman acknowledged, Obama had to consider broader political implications.

"Would we be better with Barack Obama getting reelected or Republicans taking back control of the White House?" he asked. "Anyone who wants Obama to act in ways that wouldn't get Obama get reelected is being highly unrealistic about politics."

Rich Williams, a higher-education advocate for the U.S. Public Interest Research Group, the national lobbying arm of a coalition of public-interest organizations, noted that while billing in-school interest rates would result in further debt burdens for students, the money saved would be plowed back into funds to help prospective students pay for tuition.

"It is less bad than it sounds," Williams said of the proposal. "The in-school interest subsidies definitely helps kids out, but it is untargeted financial aid. While some show some level of need, by the time they finish their graduate degree not all of them will have trouble playing their loans back. If you remove the $2 billion we are putting towards those subsidies and find a different way to target it so that those who need it get it, it really makes more sense."

And in the world of policy think tanks and academia, there was genuine appreciation that amid the cuts, Obama had proposed some infrastructure investment. This, offered Bill Galston, a former policy advisor to President Bill Clinton and fellow at the Brookings Institution, was more a measure of the president's pragmatic ethos than anything else.

"I think this budget is evidence that the president meant it in the State of the Union when he talked about a new emphasis on investing in the future," said Galston. "It's also consistent with fiscal reality as the administration understands it. They can only boost investment by clearing fiscal space for it."

As Computers Become More Sophisticated, Humans Are Put Out of Work and Ownership of Assets is Placed in Fewer Hands

by John Lawrence

Two research laboratories are developing computers to new levels of sophistication that are making human work (and jobs) increasingly irrelevant. There are two fields, one called Artificial Intelligence (AI) and the other called Intelligence Augmentation (IA) that are revolutionizing technology and transforming the world.

The New York Times reported the following:

Watson is an effort by I.B.M. researchers to advance a set of techniques used to process human language. It provides striking evidence that computing systems will no longer be limited to responding to simple commands. Machines will increasingly be able to pick apart jargon, nuance and even riddles. In attacking the problem of the ambiguity of human language, computer science is now closing in on what researchers refer to as the “Paris Hilton problem” — the ability, for example, to determine whether a query is being made by someone who is trying to reserve a hotel in France, or simply to pass time surfing the Internet. ... Traditionally, economists have argued that while new forms of automation may displace jobs in the short run, over longer periods of time economic growth and job creation have continued to outpace any job-killing technologies. For example, over the past century and a half the shift from being a largely agrarian society to one in which less than 1 percent of the United States labor force is in agriculture is frequently cited as evidence of the economy’s ability to reinvent itself. That, however, was before machines began to “understand” human language. Rapid progress in natural language processing is beginning to lead to a new wave of automation that promises to transform areas of the economy that have until now been untouched by technological change. “As designers of tools and products and technologies we should think more about these issues,” said Pattie Maes, a computer scientist at the M.I.T. Media Lab. Not only do designers face ethical issues, she argues, but increasingly as skills that were once exclusively human are simulated by machines, their designers are faced with the challenge of rethinking what it means to be human. I.B.M.’s executives have said they intend to commercialize Watson to provide a new class of question-answering systems in business, education and medicine. The repercussions of such technology are unknown, but it is possible, for example, to envision systems that replace not only human experts, but hundreds of thousands of well-paying jobs throughout the economy and around the globe. Virtually any job that now involves answering questions and conducting commercial transactions by telephone will soon be at risk. It is only necessary to consider how quickly A.T.M.’s displaced human bank tellers to have an idea of what could happen.

That is the underside of technological advancement - replacing human labor and well paying jobs with machines. That would be OK if the benefits of the reduction in the labor force were widely shared, but they aren't. The benefits accrue mainly to the large corporations that can deploy these machines while the people who are displaced find themselves mainly out of a job and out of the ability to support themselves and their families. Labor saving machines do not mean that the average person will not have to work as hard. They mean that the average person will be out of his or her job. Corporations on the other hand will continue to merge and acquire other companies as they march forward in their quest for dominion over the economy. Ownership of assets will become concentrated in fewer and fewer hands. Those whose main economic asset is their job skills will be marginalized while those whose main asset is the ownership of wealth will continue to get wealthier.

That is why the reliance on increased education as a way out of this dilemma is a chimera. There will be increasing competition for the few remaining highly skilled jobs. There will be an ever intensifying global rat race as Tiger Moms ride herd on their kids to work harder and harder in the global competition for the diminishing number of good paying jobs. Economies will have to reinvent themselves at a faster and faster pace.

That in a nutshell is what is going on today as more and more workers find themselves jobless. If those workers are also owners of economic assets, they can make their living from the return on their investments, but too often their ownership status is meager. They may own their own home, but for most middle class Americans, that is about it; home ownership is their main economic asset. But without a job, equity in a home rapidly disappears until the home is underwater, that is, the home owner owes more than the home is worth. The utopia in which labor saving machines replace the need for human labor with the result that everyone has more free time to enjoy life and the workweek is reduced to just a few short hours is replaced by the dystopia in which out of work former job holders struggle to survive after their unemployment benefits run out. In a society which is becoming increasingly austere, those unfortunate enough to have been replaced by machines, instead of enjoying their increased leisure time, wonder where their next meal is coming from as they face the prospect of living in a cardboard box on the street.

In order for technological advancement to be truly benign, the benefits of the reduction in the need for human labor would have to be widely shared either by spreading ownership of assets more equitably or by redistributing the benefits from owners to non-owners by means of the tax code in the form of welfare. The only way to spread ownership is for the people collectively to engage in wealth producing activities either via their government or by means of cooperatives like Mondragon. If just a few people own economic assets which generate the necessary goods and services, the rest of the population who have had their jobs made redundant and who are "at liberty" will not be able to purchase those goods and services and the economy will grind to a halt especially, ironically enough, in the more developed and advanced parts of the world. The economically developing nations will not fall prey to this phenomenon as badly since their cheap labor, that labor which machines cannot do, will distribute jobs and paychecks to a relatively large number of human hands. But even in these societies ownership of assets will largely come to reside in fewer and fewer hands as job holders will continue to derive economic sustenance mainly from their jobs and not from the return on assets they own.

Societies in which the return from wealth producing assets is widely shared by redistributing wealth from the successful to the unsuccessful will continue to function at a high level because not only will most people have the wherewithal to provide the necessities of life for themselves, but this economic activity will keep the wheels of industry turning albeit they will be turning with fewer and fewer human hands and more and more by machines operating at the behest of sophisticated computers. These "welfare states" will recirculate the wealth that is being created in such a way that more wealth is created. Their governments will be prosperous because of a healthy tax base, and they will continue to provide a large range of public services and infrastructure development. Those societies that don't recirculate wealth will become moribund as their economies grind to a halt. As fewer humans and more machines possess jobs, the tax base will be diminished to the point that even essential human services, services that only human beings can provide such as police, firemen and teachers will be reduced or eliminated to be replaced to some extent by private security guards, private fire districts and private schools.

Some societies may well become utopias. Those are the societies in which the winners in developing new products and services essentially support those unfortunates whose productive efforts went substantially by the wayside. These are societies which conform to the ethic of "we are all in this together." Winners will support losers in the quest for development of new products and services. Other societies will become dystopias as wealth is not widely shared, the benefits of labor reduction are concentrated in fewer hands, government tax bases are eroded and public services dry up. These are the so-called "me societies" in which the ethic is "every person for him or herself." The benefits of labor reduction will accrue to those who are the owners of economic assets and can use machines to replace the need for human labor in their economic operations. Their profits will soar since one of their major expenses is human labor. A machine can crank 24 hours a day; a human can't. Eventually though, their profits will diminish as a diminished consumer base can no longer afford to buy much of anything. Money and assets will be concentrated at the top and stop circulating as the society spirals downward and becomes non-functional. 

The West Can No Longer Claim to Be an Honest Broker in the Search for Peace

Published on Sunday, February 13, 2011 by the Guardian/UK

by Gary Younge

 

You think you know what Arab rage looks like," claimed an article in Time magazine last week. "Wild-eyed young men shouting bellicose verses from the Qur'an as they hurl themselves against authority, armed with anything from rocks to bomb vests."

But after some time witnessing Egypt's uprising the author had a revelation. Arabs had humanity and a range of attributes to go with it: humor, subtlety, sophistication, conviviality and, yes, anger – the full compliment. "So who were these impostors gathered in Tahrir Square?" he asked, seeing his prejudice confronted by reality. "They were smiling and laughing, waving witty banners." Though he didn't mention them, many women were present too. And most of the weaponry on display, from teargas to tanks, was either made in, sponsored or subsidized by America.

The events of the last month in Tunisia, Egypt and elsewhere have challenged the way the west thinks of the Arab world (and how the Arab world thinks of itself). What remains to be seen is the extent to which these ongoing events confront the way in which western powers view themselves and their relationship to the Middle East.

Over the last decade in particular, the Arab world has increasingly been depicted in the west as a region in desperate need of being tamed so that it can be civilized. It has been portrayed as an area rooted in religious fervor, where freedom was a foreign concept and democracy a hostile imposition. Violence and terrorism was what they celebrated, and all they would ever understand. Liberty, our leaders insisted, would have to be forced on them through the barrel of a gun for they were not like us. The effect was to infantilize the Arab world in order to justify our active, or at least complicit, role in its brutalization.

While this view has been intensified by the 9/11 terror attacks, the war on terror and the invasion of Iraq, it was not created by them. "There are westerners and there are Orientals," explained the late Edward Said, as he laid out the western establishment's prevailing attitude to the region at the turn of the last century, in his landmark work . "The former dominate, the latter must be dominated, which usually means having their land occupied, their internal affairs rigidly controlled, their blood and treasure put at the disposal of one or another western power."

So the sight of peaceful, pluralist, secular Arabs mobilizing for freedom and democracy in ever greater numbers against a western-backed dictator forces a reckoning with the "clash of civilizations" narrative that has sought to overwhelm the past decade. It turns out there is a means of supporting democracy in this part of the world that does not involve invading, occupying, bombing, torturing and humiliating. Who knew?

Evidence of this dislocation between expectation and reality went way beyond the pages of Time magazine. Where the west predicted chaos in the aftermath of Hosni Mubarak's departure, protesters came to sweep up the rubbish in Tahrir Square. When women in headscarves (those supposedly submissive victims whom the French government pledges to rescue from themselves) were embroiled in physical confrontations with the Tunisian state, France sided with the state.

In the crude Manichean struggle between political Islam and democracy invented by a wrongheaded strand of western liberalism, it was the Muslim Brotherhood that marched for freedom while the self-appointed defenders of the Enlightenment prevaricated for tyranny.

Last week Tony Blair said Mubarak was "immensely courageous and a force for good". On Sunday he said Mubarak's departure could be a "pivotal moment for democracy in the Middle East". The man charged by the major world powers with bringing peace to the region can't make up his mind whether he is for despotism or democracy from one week to the next.

Such are just some of the contradictions, hypocrisies, tensions and inconsistencies of the west's policies towards the region over the last month.

Where the west's self-image is concerned the principal casualty has been the insistence that it is an honest broker seeking to expand democracy, peace and freedom in the region and anxious to avoid meddling in any nation's internal affairs. This was never true. "We are in Egypt not merely for the sake of the Egyptians," the former British prime minister Arthur Balfour told the House of Commons in 1910. "Though we are there for their sake, we are there also for the sake of Europe at large." But in the postcolonial era it was repeated often enough on both sides of the Atlantic that western leaders started to believe it themselves.

So the truth is that the west was already involved. It is simply not credible to arm a dictator for 30 years and then claim neutrality when opposition mounts against him.

The west supports democracy when democracy supports the west. But Egypt further proves that, for the west, freedom is a question of strategy not principle. That's why, while most of the world looked on at the throngs in Cairo with awe and admiration, western leaders eyed them with fear and suspicion. They know that if the Arab world gets to choose its own leaders, those leaders would be less supportive of everything from rendition and Iran to Iraq and the blockade of Gaza. The west's foreign policy in the region has not simply tolerated a lack of democracy, it has been actively dependent on dictatorship.

Moreover, it became apparent that while the west has been deeply complicit in what has happened in the region, it was not even remotely in control of what would happen next. Indeed, it was barely relevant. The protesters saw the US neither as the primary problem nor the solution. Washington's preferred option of replacing Mubarak with Omar Suleiman in return for the promise of democracy at some unspecified future date revealed how little it understood what was happening in Egypt. This would have been the equivalent of a huge US social movement ousting Bush only to find him replaced by Dick Cheney.

But nor apparently did the US fully understand the tenacity of the monster it had created. Mubarak's final national address was not just a rebuff to the demonstrators but also to the White House, which apparently had no idea what he was going to say until he'd said it. The problem wasn't that Washington had no horse in the race, but that its horse was lame – and when it bolted, it dragged the US into a ditch.

While the west has been wrongfooted, its ability to influence events has not been extinguished. Mubarak's departure was a massive achievement. However, revolution demands not only the upending of the old order but the establishment of a new one. Removing a man is one thing; transforming a system is quite another.

"Kings were put to death long before 21 January 1793," wrote Albert Camus, referring to Louis XVI's execution after the French revolution. "But regicides of earlier times and their followers were interested in attacking the person, not the principle of the king. They wanted another king, and that was all. It never occurred to them that the throne could remain empty for ever."

The west's credibility in the region has been terminally damaged. But while it lacks influence, it still has power. The king has fled. But the kingmakers still wait in the wings.

© 2011 Guardian/UK

Gary Younge is a Guardian columnist and feature writer based in the US

Tiger Mothers or Elephant Mothers?

Published on Sunday, February 13, 2011 by Project Syndicate

by Peter Singer

MELBOURNE – Many years ago, my wife and I were driving somewhere with our three young daughters in the back, when one of them suddenly asked: “Would you rather that we were clever or that we were happy?”

I was reminded of that moment last month when I read Amy Chua’s Wall Street Journal article, “Why Chinese Mothers Are Superior,” which sparked more than 4,000 comments on wsj.com and over 100,000 comments on Facebook. The article was a promotional piece for Chua’s book, Battle Hymn of the Tiger Mother, which has become an instant bestseller.

Chua’s thesis is that, when compared to Americans, Chinese children tend to be successful because they have “tiger mothers,” whereas Western mothers are pussycats, or worse. Chua’s daughters, Sophia and Louise, were never allowed to watch television, play computer games, sleep over at a friend’s home, or be in a school play. They had to spend hours every day practicing the piano or violin. They were expected to be the top student in every subject except gym and drama.

Chinese mothers, according to Chua, believe that children, once they get past the toddler stage, need to be told, in no uncertain terms, when they have not met the high standards their parents expect of them. (Chua says that she knows Korean, Indian, Jamaican, Irish, and Ghanaian mothers who are “Chinese” in their approach, as well as some ethnic-Chinese mothers who are not.) Their egos should be strong enough to take it.

But Chua, a professor at Yale Law School (as is her husband), lives in a culture in which a child’s self-esteem is considered so fragile that children’s sports teams give “Most Valuable Player” awards to every member. So it is not surprising that many Americans react with horror to her style of parenting.

One problem in assessing the tiger-mothering approach is that we can’t separate its impact from that of the genes that the parents pass on to their children. If you want your children to be at the top of their class, it helps if you and your partner have the brains to become professors at elite universities. No matter how hard a tiger mom pushes, not every student can finish first (unless, of course, we make everyone “top of the class”).

Tiger parenting aims at getting children to make the most of what abilities they have, and so seems to lean towards the “clever” side of the “clever or happy” choice. That’s also the view of Betty Ming Liu, who blogged in response to Chua’s article: “Parents like Amy Chua are the reason why Asian-Americans like me are in therapy.”

Stanley Sue, a professor of psychology at the University of California, Davis, has studied suicide, which is particularly common among Asian-American women (in other ethnic groups, more males commit suicide than females). He believes that family pressure is a significant factor.

Chua would reply that reaching a high level of achievement brings great satisfaction, and that the only way to do it is through hard work. Perhaps, but can’t children be encouraged to do things because they are intrinsically worthwhile, rather than because of fear of parental disapproval?

I agree with Chua to this extent: a reluctance to tell a child what to do can go too far. One of my daughters, who now has children of her own, tells me amazing stories about her friends’ parenting styles. One of them let her daughter drop out of three different kindergartens, because she didn’t want to go to them. Another couple believes in “self-directed learning” to such an extent that one evening they went to bed at 11 p.m., leaving their five-year-old watching her ninth straight hour of Barbie videos.

Tiger mothering might seem to be a useful counterbalance to such permissiveness, but both extremes leave something out. Chua’s focus is unrelentingly on solitary activities in the home, with no encouragement of group activities, or of concern for others, either in school or in the wider community. Thus, she appears to view school plays as a waste of time that could be better spent studying or practicing music.

But to take part in a school play is to contribute to a community good. If talented children stay away, the quality of the production will suffer, to the detriment of the others who take part (and of the audience that will watch it). And all children whose parents bar them from such activities miss the opportunity to develop social skills that are just as important and rewarding – and just as demanding to master – as those that monopolize Chua’s attention.

We should aim for our children to be good people, and to live ethical lives that manifest concern for others as well as for themselves. This approach to child-rearing is not unrelated to happiness: there is abundant evidence that those who are generous and kind are more content with their lives than those who are not. But it is also an important goal in its own right.

Tigers lead solitary lives, except for mothers with their cubs. We, by contrast, are social animals. So are elephants, and elephant mothers do not focus only on the well-being of their own offspring. Together, they protect and take care of all the young in their herd, running a kind of daycare center.

If we all think only of our own interests, we are headed for collective disaster – just look at what we are doing to our planet’s climate. When it comes to raising our children, we need fewer tigers and more elephants.

© 2011 Project Syndicate

Peter Singer is a professor of bioethics at Princeton University. His 1975 book Animal Liberation was a touchstone for the animal rights movement. A selection of his many books include: Practical Ethics, How Are We To Live? Ethics in an Age of Self-Interest, One World: The Ethics of Globalization, The Ethics of What We Eat: Why Food Choice Matters, and The President of Good and Evil: Questioning The Ethics of George W. Bush.  Singer's most recent book, The Life You Can Save: Acting Now to End World Poverty, is now available.

more Peter Singer

The Obama Budget: And Why the Coming Debate Over Spending Cuts Has Nothing to Do With Reviving the Economy

by Robert Reich

Sunday, February 13, 2011

President Obama has chosen to fight fire with gasoline.

Republicans want America to believe the economy is still lousy because government is too big, and the way to revive the economy is to cut federal spending. Today (Sunday) Republican Speaker John Boehner even refused to rule out a government shut-down if Republicans don’t get the spending cuts they want.

Today (Monday) Obama pours gas on the Republican flame by proposing a 2012 federal budget that cuts the federal deficit by $1.1 trillion over 10 years. About $400 billion of this will come from a five-year freeze on non-security discretionary spending – including all sorts of programs for poor and working-class Americans, such as heating assistance to low-income people and community-service block grants. Most of the rest from additional spending cuts, such as grants to states for water treatment plants and other environmental projects and higher interest charges on federal loans to graduate students.

That means the Great Debate starting this week will be set by Republicans: Does Obama cut enough spending? How much more will he have cut in order to appease Republicans? If they don’t get the spending cuts they want, will Tea-Party Republicans demand a shut-down?

Framed this way, the debate invites deficit hawks on both sides of the aisle to criticize Democrats and Republicans alike for failing to take on Social Security and Medicare entitlements. Expect Erskine Bowles and Alan Simpson, co-chairs of Obama’s deficit commission, to say the President needs to do more. Expect Alice Rivlin and Paul Ryan, respectively former Clinton hawk and current Republican budget hawk, to tout their plan for chopping Medicare.

It’s the wrong debate about the wrong thing at the wrong time.

To official Washington it seems like 1995 all over again, when Bill Clinton and Newt Gingrich played a game of chicken over cutting the budget deficit, the hawks warned about the perils of giant deficits, and the 1996 general election loomed over all. Washington politicians and the media know this playbook by heart, so it’s natural for them to take on the same roles, make the same arguments, and build up to the same showdown over a government shutdown and a climactic presidential election.

But the 1995 playbook is irrelevant. In 1995 the economy was roaring back to life. The recession of 1991 had been caused (as are most recessions) by the Fed raising interest rates too high to ward off inflation. So reversing course was relatively simple. Alan Greenspan and the Fed cut interest rates.

In 2011 most Americans are still in the throes of the Great Recession, which was caused by the bursting of a giant debt bubble. The Fed can’t reverse course by cutting interest rates; rates have been near zero for two years.

Big American companies are sitting on almost $2 trillion of cash because there aren’t enough customers to buy additional goods and services. The only people with money are the richest 10 percent whose stock portfolios have been roaring back to life, but their spending isn’t enough to spur much additional hiring.

The Republican bromide – cut federal spending – is precisely the wrong response to this ongoing crisis, which is more analogous to the Great Depression than to any recent recession. Herbert Hoover responded the same way between 1929 and 1932. Insufficient spending only deepened the Great Depression.

The best way to revive the economy is not to cut the federal deficit right now. It’s to put more money into the pockets of average working families. Not until they start spending again big time will companies begin to hire again big time.

Don’t cut the government services they rely on – college loans, home heating oil, community services, and the rest. State and local budget cuts are already causing enough pain.

The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.

And exempt the first $20,000 of income from payroll taxes.

Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.

And raise the ceiling on the portion of income subject to payroll taxes to $500,000.

It’s called progressive taxation.

The lion’s share of America’s income and wealth is at the top. Taxing the very rich won’t hurt the economy. They spend a much smaller portion of their incomes than everyone else.

Sure – take some steps to cut federal spending over the longer term. Cut the bloated defense budget. Tame the growth in healthcare costs by allowing the federal government to use its bargaining clout — as the nation’s biggest purchaser of drugs and hospital services under Medicare and Medicaid and the Veterans Administration – to get low prices. While we’re at it, cut agricultural subsidies.

But don’t believe for a moment that federal spending cuts anytime soon will get the economy growing soon. They’ll have the opposite effect because they’ll reduce total demand.

The progressive tax system I’ve outlined will get the economy growing again. This, in turn, will bring down the ratio of the debt as a proportion of the total economy — the only yardstick of fiscal prudence that counts.

But we can’t get to this point – or even to have a debate about it – if Obama allows Republicans to frame the debate as how much federal spending can be cut and how to shrink the deficit.

The President has to reframe the debate around the necessity of average families having enough to spend to get the economy moving again. He needs to remind America this is not 1995 but 2011 — and we’re still in a jobs crisis brought on by the bursting of a giant debt bubble and the implosion of total demand.

Who Says Republicans Have No New Ideas?

by Robert Reich

Friday, February 11, 2011

Quiz: Which of the 2012 presidential aspirants delivered the following words at the Conservative Political Action Convention, now underway in Washington?

We have seen tax-and-tax spend-and-spend reach a fantastic total greater than in all the previous 170 years of our Republic.

Behind this plush curtain of tax and spend, three sinister spooks or ghosts are mixing poison for the American people. They are the shades of Mussolini, with his bureaucratic fascism; of Karl Marx, and his socialism; and of Lord Keynes, with his perpetual government spending, deficits, and inflation. And we added a new ideology of our own. That is government give-away programs….

If you want to see pure socialism mixed with give-away programs, take a look at socialized medicine.

If you guessed Jim DeMint, you could be forgiven. He talks a lot like this. But you’d be wrong. Newt Gingrich didn’t utter these precise words, either, although he uses much the same language and offers the same themes.

You’d also be wrong if you guessed Rick Santorum, Rick Perry, Tom Pawlenty, Ron Paul, Haley Barbour, John Thune, Mitt Romney, or Mitch Daniels. (Sarah Palin isn’t attending.)

But again, your mistake would be understandable because these words sound a lot like theirs. Any of them could have delivered this message – and all of them have, over and over again. It’s the Republican message of 2011.

The perfectly correct answer is Herbert Hoover.

Herbert Hoover didn’t deliver these words at this week’s Conservative Political Action Convention, though. He delivered them at the Republican National Convention in Chicago on July 8, 1952.

That was almost sixty years ago.

Republicans haven’t come up with a single new idea since. They haven’t even come up with a new theme.

Herbert Hoover, you may remember, didn’t have a sterling record when it came to the economy. As president, he presided over the Great Crash of 1929 and ushered in the Great Depression. He had no idea for what to do to help the nation out of the Depression except to balance the federal budget. By the time he was voted out of office in 1932, one out of four Americans was unemployed.

By 1952, Hoover had been proven irrelevant and hidebound.

After Dwight D. Eisenhower won the 1952 Republican nomination and went on to become president, he wisely disregarded everything Hoover had advised.

Under Ike, the marginal income tax on America’s highest earners was 91 percent. Eisenhower also commenced the biggest infrastructure program in the nation’s history – the National Interstate and Defense Highway Act, which replaced America’s meandering two-lane roads with 40,000 miles of straight four and six-lane highways. He signed into law the National Defense Education Act, which trained a whole generation of math and science teachers, and upgraded American classrooms for the future. The Federal Housing Authority subsidized home ownership. The Defense Department spawned future technologies in aerospace and telecommunications.

Did the U.S. suffer fascism, socialism, deficits and inflation, as Hoover predicted? No. The U.S. economy soared. The median wage rose faster than ever before. And the incomes of America’s working class and poor rose at the fastest pace of all.

An Assessment of Venezuela’s Bolivarian Revolution at Twelve Years

By Gregory Wilpert - Venezuelanalysis.com, February 2nd 2011

On the 12th anniversary of Chavez’s first oath of office as president of Venezuela on February 2, 1999, one can easily get the impression from the international mainstream media that Venezuela is trapped in a terminal spiral towards becoming a state socialist dictatorship. One reads about a failing economy, presidential authoritarianism, rampant crime and corruption, arbitrary nationalizations of companies, and persecution of the private media and of opposition leaders. If all of this is true, then why does President Chavez continue to enjoy widespread support within Venezuela, according to polls? True, recent electoral successes have been relatively narrow for Chavez, but he and his supporters continue to maintain the support of approximately half the country’s population.[1] More importantly, opinion polls regularly show that Venezuelans say their political system is more democratic and their economy is functioning better than the polities and economies of most other countries in the region. Leaving aside the theoretical possibility that the opinion polls and electoral results are false, how can it be explained that Chavez and his government continue to enjoy this much support when Venezuela is supposedly a nightmare of crime, repression, and a failing economy?

I argue that Venezuela is far from being a failed leftist experiment. Rather, there is substantial evidence that just the opposite is the case. Venezuela has made significant progress in the past 12 years of Chavez’s presidency towards creating a more egalitarian, inclusive, and participatory society. Indeed, these advances explain the government’s ongoing popularity. At the same time, though, one must recognize that there are significant shortcomings that have either persisted throughout Chavez’s presidency or in some cases are new. This helps to explain why the Chavez government’s popularity seems to have peaked with Chavez’s 2006 reelection (winning 62.8% of the vote in December of that year) and has gradually declined since.

In order to explain the relatively high level of support after 12 years in office I will first present some of the most important advances of the Chavez government in the areas of polity, economy, society, and international relations. I will then also take a look at what some of the most important shortcomings are and what factors or obstacles might explain the persistence of these shortcomings. This is by no means a comprehensive list, but merely a summary of what I consider to be the most important advances, shortcomings, and obstacles.

Advances

In the political realm

Many of the political changes that have taken place in Venezuela in the past 12 years have involved an increase in political inclusion of previously excluded sectors of society. This has taken place in a wide variety of areas. For example, the percentage of the voting age population that is registered to vote rose from 79% in 1998 to 92% in 2010. Also, Voter participation in presidential elections increased from 65.5% in 1998 to 74.6% in 2006. The combination of increased participation rate and of increased registration means that the participation rate of the voting age population increased from 51% to 69% between 1998 and 2006.[2] Since most Venezuelans are poor and previously tended not to vote, most of the new voters come from poor backgrounds. Compare this to the United States, where in one of the highest turnouts in recent decades only 57.4% of the voting age population voted in 2008.[3]

Further bolstering Venezuela’s democratic credentials is the fact that as a result of the new 1999 constitution that was passed under Chavez, Venezuela instituted one of the most fraud-proof electoral systems in the world, with dual electronic and paper ballots – a system that has been praised by election observers from around the world.

In terms of including previously excluded sectors of the population, with the 1999 constitution the indigenous population now enjoys many new rights, such as the right to their own languages, cultures, and territories, as well as three guaranteed representatives in the National Assembly.

Also, women are now explicitly included in every aspect of the 1999 constitution and housework is supposed to be considered as wage-earning work for the purpose of calculating pension benefits (which, however, has so far not been implemented). More than that, women and indigenous peoples are given affirmative action opportunities for loans, land reform, and access to social programs such as public education and poverty alleviation.

Not only are more Venezuelans included in the political process, they also have more opportunities to participate than previously. These greater opportunities for participation take many forms, such as the right of citizens to initiate referenda to recall any elected official, to approve of laws, and to repeal laws.

Perhaps the most important new form of participation takes place in community self-organization, via citizen assemblies, which since 2006 have resulted in the creation of more than 30,000 communal councils and dozens of agglomerations of community councils, known as communes. Communal councils are formed when 150-400 families come together and decide to work on a wide variety of community improvement projects, for which they receive substantial funding from the government.

Another form of civil society participation takes place in the nomination of members to three independent branches of government (judiciary, prosecutorial, and electoral branches).

With regard to the media, ordinary Venezuelans now participate in the creation of hundreds of new and independent community radio and television stations across the country. Previous governments persecuted community media, but state institutions now actively support them - not with ongoing financing, but with training and start-up equipment.

The combination of greater inclusion and greater participation has led to a greater acceptance of Venezuela’s democratic political system, according to the annual Latinobarometro opinion polls, which allow for comparisons with other democracies in Latin America. That is, more Venezuelans believe in democracy than citizens of any other country in Latin America. Eighty-four percent of Venezuelans say, “democracy is preferable to any other system of government,” while the average for all of Latin America is 61%.[4] Forty-nine percent of Venezuelans says that they are satisfied with their democracy, which is 5 points above the regional average of 44% and 14 points higher than it was in 1998.[5] Also, more Venezuelans express an interest in politics than in any other Latin American country (35%, with the regional average at 26%).[6] Finally, contrary to what one would believe by reading mainstream media, only 25% of Venezuelans say that the president controls the mass media, which is 4 points lower than the regional average of 29%.[7]

In the economic realm

Just as the Chavez government has democratized Venezuela’s political system over the past 12 years; it has done the same with its economic system, both on a macro-economic level and on a micro-economic level.

On a macro-economic level this has been achieved by increasing state control over the economy and by dismantling neo-liberalism in Venezuela. The Chavez government has regained state control over the previously quasi-independent national oil industry. The government nationalized private sub-contractors of the oil industry and incorporated them into the state oil company, giving workers full benefits and better pay. It also partially nationalized transnational oil company operations so that they control no more than 40% of any given oil production site. Then, the government eliminated the practice of “service agreements,” whereby transnational oil companies enjoyed lucrative concessions for oil production. Perhaps most importantly, the government increased royalties from oil production from as low as 1% to a minimum of 33%.

In the non-oil sector the government nationalized key (previously privatized) industries, such as: steel production (Sidor), telecommunications (Cantv), electricity distribution (production was already in state hands), cement production (Cemex), banking (Banco de Venezuela), and food distribution (Éxito).

On a micro-economic level democratization has taken place by promoting workplace democracy. The government supported the creation of more than 100,000 cooperatives with low-interest loans and free training. This represents a more than 100-fold increase from pre-Chavez days. In cases where factories were idle the government has allowed former workers to take them over so that dozens of worker co-managed factories were created.

The democratization of the workplace has had its perhaps profoundest effect in the agricultural sector, where rural land reform has benefited more than a million Venezuelans, not just with tracts of land, but also with training, credits, technology, and access to markets.

The results of the Chavez government’s economic policies have been a 50% drop in the poverty rate, from 49% of the households in early 1998 to 24% in late 2009.[8] Similarly, the extreme poverty rate dropped more than two-thirds, from 21% of households in 1998 to 6% in late 2009.[9] While most of this drop in poverty is attributable to social policies that benefit the poor, much of it is also traceable to a dramatic drop in unemployment, which fell by nearly half, from 14.5% in early 1999 to around 7% in late 2010. Some countries that pursue neo-liberal economic policies have also achieved lower poverty rates, but usually at the expense of greater inequality. In Venezuela, though, inequality, as measured by the “Gini coefficient,” dropped from 0.49 in 1998 to 0.39 in 2010,[10] one of the lowest levels in Latin America.

All of this has meant that more Venezuelans are satisfied with Venezuela’s economy—despite two years of recession (2009 and 2010)—than most Latin Americans are of their respective economies. That is, in 2010, 38% of Venezuelans said they are satisfied with their economy, while the Latin American average is 30%.[11]

New Infrastructure in the People's Republic of Portland!

All-American Streetcar Boom Fuels Urban Future

by Ari Shapiro, from npr.org, February 12, 2011

 
President Obama spent the past week talking about his plans to improve America's infrastructure. These speeches sometimes sound like something out of The Jetsons, when the president talks about high-speed rail, futuristic airports and nationwide, broadband Internet.

One growing part of America's infrastructure, however, has a distinctly 19th-century feel. It's the return of the streetcar.

Like so many urban development stories in America, this one begins in Portland, Ore.

Outside the famous Powell's bookstore, a 21st-century streetcar glides to a stop, opens its doors, and lets out a mix of tourists and locals. Modern streetcars have been running in this city for about a decade, and Chandra Brown lives right along their route.

"I love the streetcar," says Brown, who's lived in Portland for 17 years. "They had told me that there were no streetcars built in the United States, and I basically said, 'You're a liar, that can't be, honestly.' So I did some research after that and found out, yes, that was absolutely correct. There was no builder of modern streetcars in the United States."

As it happens, Brown is a vice president of Oregon Iron Works. Her company has been making bridges, boats and other heavy equipment since the 1940s. A few years ago, they created a subsidiary called United Streetcar. Now they are manufacturing the first American-built streetcars in more than 50 years.

The Oregon Iron Works factory is a cavernous space in a Portland suburb, where men with hammers are busy constructing a streetcar base. Seventy to 90 percent of the parts are made in the U.S.; seats from Michigan, upholstery from North Carolina, windshield wipers from Connecticut.

"It was 2009 when we finished the first prototype, made-in-the-USA streetcar," Brown says. "Now this little fledgling company is building 13 cars with $50 million-plus in orders." Those orders are all for cities in the U.S., too.

'Back To The Future'

In fact, the U.S. is in a streetcar boom. More than a dozen cities either have them or are actively planning for their development, Oregon Rep. Earl Blumenauer says.

"You don't have to be a large, metropolitan area to support it," he says. "Little Kenosha, Wis., has a streetcar. Little Rock has a streetcar."

I met Blumenauer in Washington, D.C., at a coffee shop on H Street Northeast. This is a gradually gentrifying neighborhood that is Stage 1 in Washington's planned streetcar route.

"What the skeptics, I think, forget, is that virtually every American city was designed around a streetcar," Blumenauer says. "I mean, the most ambitious plans for Washington, D.C., are approximately one-fifth of what the District had 100 years ago."

Blumenauer was a champion of streetcars years before his state started manufacturing them. He says they're green, they last decades, and businesses are more likely to set up shop along a streetcar route because they know it won't move the way a bus line might.

"So reintroducing the streetcar is actually back to the future," he says, "and this is what this community was about when it was coming together a century ago."

Not Necessarily A Magic Bullet

Critics of the streetcar craze say the mania is part of the problem. Brian Taylor directs UCLA's Institute of Transportation Studies and says governors, mayors and taxpayers all want flashy new projects, but sometimes those are not the best solutions.

"We're painting ourselves into a bizarre corner where we're not able to maintain our streets, we're not able to maintain the buses and the trains that we have out there, and we're focused on cutting ribbons in front of new rail projects," Taylor says.

He's skeptical that streetcars are the urban transit solution they're touted to be. "If the investment is tied in effectively to the rest of the transit system, it can be a very effective investment," he says. "If it's not — and there are cases where it has not been — then it's not."

On Monday, President Obama will unveil his new budget. He has already said it will call for rebuilding American infrastructure. That means more planes, trains, automobiles — and perhaps also streetcars.

Congratulations, Egypt! A People's Revolution Done Right: Next Step - Prevent it From Being Hijacked

by John Lawrence

 
The people's revolution in Egypt may be a turning point in world zeitgeist. For 30 years neocon values have prevailed. On November 23, 2006 I blogged in a post entitled "Neocon Rats Leaving the Sinking Ship":

"The whole neocon idea of spreading democracy in the middle east by attacking and invading a country in order to change it from a dictatorship to a democracy is a ridiculous proposition on the face of it, but that's what the neocons were selling. And the preposterous notion that this was a moral undertaking - it was morally a good thing to do - to bring death and destruction to a nation in order to spread democracy is as repugnant as the notion that Hitler was morally correct to invade weaker countries because the Germans were the most advanced civilization composed of the stongest and best people. The American supermensch, according to the neocons, would advance the Iraqi undermensch to democracy and freedom. Depite the cost in death and destruction, they would thank us some day. They would throw flowers at the advancing troops much as the Austrians threw flowers at the German army during the Anscluss."

This pretty well sums up American policy under George W Bush and the neocons. Their notion of forcing democracy on a country by invading it played out in Iraq and Afghanistan. The IMF and the World Bank were US surrogates which forced policies of privatization, deregulation and shredding of the social safety net down the throats of any country not stong enough to resist. The neocon US saw as its duty the forcing of what they considered to be American values down the throats of the rest of the world. The result in many cases was the creation of an elite class of wealthy oligarchs and increased poverty among the majority of the people with a corrupt and repressive dictator favorable to American intersts at the top. The intersection of political and economic power was complete. Such was the case in Egypt.

For those that say that this protest came out of nowhere, let me set the matter straight. There have been protests as recently as last June. They just never got the mass publicity. In an article, Privatization and Corruption in Egypt, we find the following:

Last June there were protests against privatization in Egypt. The protests were so severe that the government actually decided to effectively end the program. Since the 1990's a key economic priority in Egypt was the privatization of state owned industries and a transition from a centrally controlled economy to a more free market oriented economy that would be part of the global capitalist system. The justification for such a move was the inefficiency of the state controlled command economy. However, the more pressing concern was to open up the country to foreign investment and also enrich crony supporters of the government through privatization of state owned assets at fire sale prices. Many in the public long believed that privatization of state companies involved corruption involving insider dealings and opposed it for this reason but also there was oppoosition from some old guard officials who thought that privatization would be destabilizing. When the state owned companies, this ownership could be used to help control dissent. Wages could be raised and people could be employed even when in purely capitalist market terms they were not needed. In fact they provided a social safety net of sorts. The privatization has already gone about as far as it could go. Remaining state companies often are technologically outdated and overstaffed with poorly trained workers. No capitalist investors are interested in buying them except perhaps at very low prices. In June of 2010 thousands of workers protested outside parliament complaining about lost jobs, wages, and social protections. Fearing even more political unrest the government decided to drop further privatization for now. The government has even bought back several companies from investors. The demand from the international business community has been for further "reform"to cut Egyptians expectations. Egyptians expect their government to do things for them not just for business! Experts claim that the fundamental mistake of the government was in failing to reduce public expectations. Under the command economy and state ownership people expected the state to be the primary provider. People supported the government because the government gave everyone jobs. The experts complain that there are still about six million state civil service employees. Of course the reform would be to privatize most of these services, make them centers for private profit and investment and hire only if this made money for investors. The new view of this is expressed by an official. Anonymous of course and to the New York Times! ‘You educate me, give me a degree, you give me a job, when I die you bury me - and I do nothing.' " Of course they did do something; they kept the system going inefficient or not. The problem is that it is not part of the system of global capitalism and it does not provide much for private profit or investors. Political scientist Amr El-Shobaki said that privatization was a way that friends of the rich and powerful could grow more rich and powerful. The privatization process had begun under Anwar Sadat but it begin in earnest in 1991. The goal was to privatize 314 companies. All the bargains are gone to investors, dissolved or merged with other state companies. 150 are still left. Shobaki said:"There is always a cost for reform, but the problem here is that people now have the impression that those who always pay the cost of every reform are the simple people, while businessmen are never held accountable for corruption and while privatization of companies takes place in secret, without the knowledge or participation of the people," Perhaps people's impressions are correct. Faced with opposition to privatization the government took another tack. Open the door to foreign investment and let state industries wither. In the Egyptian context, economists say it is a victory that this work force has shrunk, to about 300,000 from about 1.3 million in 1978. Right, it is a victory that jobs are lost. THe government that scored that victory is now in danger of falling. One of the reasons is the high unemployment. The government has adopted other "reforms" to reduce expectations of the Egyptian working class and whip them into shape. The government adopted a law that allowed state-owned companies to deal with employees in the same way as private-sector companies. In 2009 it began to carry out a new law allowing the private firms to build infrastructure, including sewage plants and hospitals, another unpopular move intended to whittle away the state-dominated system. A study of Egyptian attitudes show a quite different view of privatization and the role of government than in the U.S. Consider this: ""The majority of citizens believe that the best system would strengthen the role of the state and the public sector; only 20% of citizens considered privatization to be beneficial to Egypt’s economy. ""

There you have it, friends, in a nutshell! Privatization, a core neocon value, led to large scale unemployment and it was this that was the primary factor behind Egypt's revolution. You had large numbers of young college educated people with no job prospects. You had fantastic wealth among a tiny elite while the rest lived in poverty. This revolution was about corruption in this sense, but it was all perfectly legal. Mubarak himself had siphoned off $70 billion dollars from the system which required foreign investors to enter into partnerships with Egyptians owning 51%. The best state owned companies had been privatized and snapped up by foreign investors. The remaining state owned companies were virtually worthless. No investor wanted to buy them. In the name of efficiency workers had been laid off.

The New York Times confirmed that what was happening was the sell-off of state owned enterprises to private investors with the consequence of laid off employees and high unemployment:

Privatization began in earnest in 1991, when Egypt agreed to work with international lenders on an economic restructuring plan to help it repair a failing economy. This represented an effort to accelerate changes started in the 1970s by President Anwar el-Sadat, who began the process of dismantling the state-controlled economy fashioned by President Gamal Abdel Nasser in the 1950s and early ’60s. The 1991 effort started off easily enough when the state readily found buyers for assets like its beer and cement industries. But over time, the state said it was left with difficult-to-sell assets, outdated factories producing cars, instruments for textile manufacturing and other things that are either obsolete or unwanted. At the same time public pressure became intense as workers complained that their rights were being auctioned off. The goal was originally to sell off 314 companies. There are still 150 left: the rest have been sold to investors, gone public on the stock market, dissolved or merged with other state industries. “There is always a cost for reform, but the problem here is that people now have the impression that those who always pay the cost of every reform are the simple people, while businessmen are never held accountable for corruption and while privatization of companies takes place in secret, without the knowledge or participation of the people,” Mr. Shobaki said. Faced with so many obstacles, the government took another approach, trying to open the door to foreign investment while quietly allowing state industries to wither. In the Egyptian context, economists say it is a victory that this work force has shrunk, to about 300,000 from about 1.3 million in 1978. The government also adopted a law that allowed state-owned companies to deal with employees in the same way as private-sector companies. This year it began to carry out a new law allowing the private firms to build infrastructure, including sewage plants and hospitals, another unpopular move intended to whittle away the state-dominated system.

So fundamentally the revolution was about jobs. It was about economic democracy as opposed to economic aristocracy. It was a rejection of crony capitalism in which state owned assets are sold off to a group of politically powerful and connected insiders. It was about a repudiation of neocon values. The reason that the American right wing is so upset is that they are afraid that the Muslim Brotherhood will take over. They are upset over the word "Brotherhood." Any new economic system put in place by the Egyptian people that has anything to do with "Brotherhood" is antithetical to American economic values, the values of capitalism. Why it might mean redistribution of wealth not from the poor to the wealthy which they favor but in the other direction from wealthy to poor which they don't. When George W Bush and the neocons talked about "democracy," democracy was just a euphemism for American style capitalism - a top down elite of wealthy investors and a majority underclass living in poverty with a repressive dictator at the top who maintained stability so American interests in the region would not be transgressed. The American right wing has gotten so comfortable with sham democracy that it has a problem with anything approaching authentic democracy.

But the Egyptian people are interested in real democracy not sham democracy, and that real democracy very definitely has an economic component as did the 1948 UN Declaration of Human Rights which states: "Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control." The Egyptian revolution is a repudiation of neocon values, a repudiation of privatization, deregulation, austerity and shredding of the social safety net. It is more than a call for free elections and a new parliament. It is a call for economic as well as political justice. Let's hope that the Egyptian people's revolution is not hijacked.

It's impossible to know what went on behind closed doors, but the final results show that the military sided with the people and against the oligarchy. If Bush were President, the results might have turned out differently. The military might have been persuaded to turn on the people thus preserving American interests in the region. The victory of the Egyptian people does not mean a repudiation of American interests, just a rejection of neocon values. Neocon values are only American values when Republicans are in control. The fact that we have a President Obama and Democrats are in power in the White House means that American values have shifted. Now American values can support and work hand in hand with a true democracy in Egypt. This might be the paradigm shift which truly delivers power and economic justice to the people and away from the interests of globalized transnational corporations and the international wealthy class of elite investors. Let's hope so.

Bernie Sanders - America's Senator - Sounds Off

Published on Thursday, February 10, 2011 by In These Times

Organizing Help Wanted

We must defend America’s middle class before millionaires and billionaires own the entire country.

by Bernie Sanders

There is a war going on in this country and I am not referring to the wars in Iraq or Afghanistan. I am referring to the war waged by the wealthiest people in America on the disappearing and shrinking middle class of our country. The nation’s billionaires are on the warpath. They want more, more, more. Their greed has no end and they are apparently unconcerned for the future of this country if it gets in the way of their accumulation of power and wealth.

On the floor of the Senate, we discuss a lot of things. But one thing we fail to talk about is who is winning in this economy and who is losing, and what that means for parents struggling to survive while working longer hours with lower wages, and worrying about whether their children will have the same kind of standard of living they have.

Right now, the top 1 percent controls more than 23 percent of all income earned in America. The top 1 percent controls more than the bottom 50 percent. It’s not only that the rich are getting richer. The very, very rich are getting richer. In the last 25 years, we have seen 80 percent of all new income going to the top 1 percent.

On top of all this, while the millionaires get richer and there are more and more billionaires, as a result of the Citizens United decision, what we are beginning to see in elections is unbelievable—a group of billionaires getting together and deciding where they are going to spend their money. Billionaires are going to flood states with all kinds of negative, dishonest ads in an effort to defeat people defending the middle class and to elect people who will stand up for right-wing billionaires.

The Republicans’ goal—and to their credit, they have been pretty honest about it—is to bring this country back to where we were in the 1920s. All of the progressive legislation that started with FDR is on the chopping block. Despite the great successes of Social Security over the last 75 years, despite the fact that Social Security today has a $2.6 trillion surplus, they are targeting Social Security. They are targeting Medicare. In Arizona today, people on Medicaid who need transplants are no longer able to get them—that is a real death panel.

Right now, according to a number of studies, we are losing about $100 billion every year because corporate America and the very wealthy are stashing their money in tax havens like the Cayman Islands and Bermuda. We should be aware that in 2009, ExxonMobil made $19 billion in profits and not only did the company not pay anything in taxes, it got a $106 million refund from the IRS. We should also be aware that since 1997, we have almost tripled funding for the military. So if we are serious about reducing the deficit, those are things we need to look at—not at Social Security, not programs everyday Americans need.

Our job now is to rally Americans to put pressure on a handful of Republicans—to tell them, go into your hearts, talk to your constituents and tell me if it is appropriate to hold hostage the future of this country for an agenda that benefits only the very rich.

If we act, we can win this fight. It is crucial that we do, because if we don’t—if they roll over us now—there is no stopping them. It is time we organize.

Your help is wanted. 

© 2011 In These Times

Bernie Sanders (I-Vt.) was elected to the U.S. Senate in 2006 after serving 16 years in the House of Representatives. He is the longest serving independent member of Congress in American history. Elected Mayor of Burlington, Vt., by 10 votes in 1981, he served four terms. Before his 1990 election as Vermont's at-large member in Congress, Sanders lectured at the John F. Kennedy School of Government at Harvard and at Hamilton College in upstate New York. Read more at his website.

more Bernie Sanders

Why the Republican Attack on “Job-Killing Regulations” is Dumb

by Robert Reich

Wednesday, February 9, 2011

Republicans aim to end all “job-killing regulations” — especially those that, according to House Speaker John Boehner, are “strangling” business with detailed requirements over health, safety, the environment, corporate governance and finance.

Here’s another instance of where the White House’s attempt to preempt Republican rhetoric (the President said last week his administration would root out all nonsensical and inefficient regulation) ends up legitimizing it — and reframing the public debate around an issue that’s hardly central to what ails America.

The reason we have continued sky-high unemployment has nothing to do with excessive regulation. There was no sudden outpouring of federal regulation in 2007 before the economy tanked and millions lost their jobs.

If anything, the economy unraveled because of too little regulation. Wall Street went on a binge, remember? The Street could get almost free money from the Fed (which had reduced interest rates to near zero) and do just about whatever it wanted with it. Thirty years of deregulation, culminating with the dismantling of Glass-Steagall and the abject failure of regulators at the Fed and the SEC to use the authority they still had, enabled the Street to make bundles of money and expose the rest of the economy to unprecedented levels of risk.

The Fed had slashed interest rates in the early 2000s, by the way, because the corporate looting scandals at Enron, Worldcom, Sunbeam, and other major corporations had sapped investor confidence. Those scandals themselves wouldn’t have happened had securities regulations been stronger and better enforced.

No one wants unnecessary regulation. And rules ought to be clear and simple. But let’s be real. Most of the complexity and verbiage that finds its way into the Code of Federal Regulations is the result of industry lawyers and lobbyists who exploit every potential ambiguity to avoid doing what lawmakers intend — thereby necessitating ever-more detailed and picayune rules to close the loopholes. It’s an endless cat-and-mouse game that runs from regulatory agencies through the courts and then back again. And it’s occurring right now, as regulations are being drawn up to put the healthcare and financial laws into effect.

There’s no necessary tradeoff between regulations and jobs. Regulations that are designed well — that tell industry what to achieve by a certain date but don’t dictate exactly how (such as fuel economy standards) — can generate innovation as companies compete to find the most efficient solutions. And innovations can lead to more jobs as they spawn new products and industries.

Even where there is a tradeoff — where regulations are costly and those costs result in fewer jobs — it still makes sense to opt for regulation when the public benefits exceed the costs to industry. We could have millions more jobs tomorrow if we eviscerated all health and safety regulations and allowed our air to turn yellow and our rivers and lakes to become fetid stinkholes. But that would be dumb.

“Job-killing regulations” is a silly phrase that substitutes for real thought. And it’s a distraction from the hard work of creating more jobs in America.

Removing the Speck in Egypt's Eye While Ignoring the Beam in Our Own

Published on Wednesday, February 9, 2011 by GRITtv

Corruption and Inequality Begin at Home

by Laura Flanders

The U.S. media seems to have found a new language for the economy. There's been talk of “solidarity” and even “class war,” and a focus on corruption and inequality like we haven't seen in who knows how long.

The only problem? They're talking about Egypt.

“It’s quite clear that entire domains in the economy were dominated by a few people,” a British professor of Middle Eastern Studies told the New York Times Monday. The reporter notes “Hosni Mubarak's Egypt has long functioned as a state where wealth bought political power and political power bought great wealth.”

Salon's Glenn Greenwald notes that such rhetoric about foreign countries serves to promote the idea that these problems exist Over There, but not over here. But Greenwald's readers and GRITtv viewers know better.

Just one example, in case you've forgotten: Massey Energy is the union-busting company that owned the Upper Big Branch mine in West Virginia that exploded in April, killing 29 people. As local reporters had complained for years, Massey's CEO Don Blankenship had more or less purchased the state's government with a consistent flow of campaign ad dollars.

And as if that wasn't enough, the Brennan Center for Justice singled out Massey, along with the U.S. Chamber of Commerce, for its spending on judicial elections—where Blankenship spent millions to remove a state Supreme Court justice who had ruled against his company and replace him with another, with whose help the same court reversed a $50 million anti-Massey judgment.

An economy dominated a few? Great wealth buying great political influence?

It's fine to explain why the Egyptian people are in the streets. But don't pretend corruption's a word that only exists in Arabic.

The F Word is a regular commentary by Laura Flanders, the host of GRITtv and editor of At The Tea Party, out now from OR Books. GRITtv broadcasts weekdays on DISH Network and DIRECTv, on cable, and online at GRITtv.org and TheNation.com. Follow GRITtv or GRITlaura on Twitter and be our friend on Facebook.

Christina Aguilera and the Hideous Cult of Oversouling

by John Eskow

February 8, 2011, from Huffington Post

To me, the horrific part of Christina Aguilera's rendition of the National Anthem -- and "rendition" is an apt term for it, because she kidnapped the song and shipped it out to be tortured -- was not her mangling of the words, but her mangling of the tune itself: to paraphrase the great Chuck Berry, she "lost the beauty (such as it is) of the melody until it sounds just like a (godawful) symphony."

This is the same grotesque style -- 17 different notes for every vocal syllable -- that has so dominated the pop and R&B charts for years. Mariah Carey and Whitney Houston are relatively minor offenders, but singers like Aguilera -- who admittedly possesses a great instrument -- just don't seem to know when to stop, turning each song into an Olympic sport as they drain it of its implicit soul, as if running through the entire scale on every single word was somehow a token of sincerity.

It's called melisma -- the bending of syllables for bluesy or soulful effect -- and what's creepy about the way it's used now is that it perverts America's true genius for song, as evinced by its creators in the world of gospel and R&B, like Ray Charles and Aretha Franklin.

You will hear more of this tonsil-twisting insincerity -- to your eternal sorrow -- if you watch any episode of American Idol.

The great Jerry Wexler -- who produced both Ray and Aretha -- coined a great term for it: "oversouling." He described it as "the gratuitous and confected melisma" that hollows out a song and drains it of meaning. Wexler, who knew more about soul than any producer before or since, said:

"Time and again I have found that flagrantly artificial attempts at melisma are either a substitute for real fire and passion or a cover-up for not knowing the melody... Please, learn the song first, and then sing it from the heart."

And Christina, he wasn't referring to the words.

POSTSCRIPT: I was lucky enough to know Wexler a bit, near the end of his life, and I can hear his raspy, streetwise voice in my ear, insisting I clarify his point: the problem is not Melisma--which I believe is also the name of Joan Rivers' daughter--it's Oversouling. It's like those corny educational films I saw in grade-school: "Fire can be our greatest friend...or our worst enemy!" The same goes for melisma. Without melisma, no Ray or Aretha, and also no Sam Cooke, no Waylon Jennings, no B.B. King, no Charlie Parker. It's rare for a singer or instrumentalist to disdain melisma completely; Miles Davis and Merle Haggard come to mind, but even they employ it, sparingly, at times. The nightmares begin when--as several posters have wisely pointed out--singers practice Melisma Abuse in order to draw attention to themselves and away from the song. Then it becomes, as Jerry Wexler said, that "gratuitous and confected melisma" that has driven so many of us to the point of shrieking, Aguilera-style, in despair.

 

Obama’s Deal with the U.S. Chamber of Commerce

by Robert Reich

Tuesday, February 8, 2011

 

“We can, and we must, work together,” the President told the U.S. Chamber of Commerce today. “Whatever differences we may have, I know that all of us share a deep, abiding belief in this country, a belief in our people, a belief in the principles that have made America’s economy the envy of the world.”

Really? I’ve been watching (and occasionally trying to deal with) the Chamber for years, and all I know is it has a deep, abiding belief in cutting taxes on the wealthy, eroding regulations that constrain Wall Street, cutting back on rules that promote worker health and safety, getting rid of the minimum wage, repealing the new health-care law, fighting unions, cutting back Medicare and Social Security, reducing or eliminating corporate taxes, and, in general, taking the nation back to the days before the New Deal.

So what, exactly, is the deal Obama is pitching to the Chamber?

He said his administration will “help lay the foundation for you to grow and innovate,” by eliminating “barriers that make it harder for you to compete - from the tax code to the regulatory system,” and by completing more trade deals.

In return, the President said he wants businesses to hire more Americans. “Many of your own economists and salespeople are now forecasting a healthy increase in demand. So I want to encourage you to get in the game,” he said. “And as you hire, you know that more Americans working means more sales, greater demand and higher profits for your companies. We can create a virtuous cycle.”

Virtuous cycle? American businesses are doing quite nicely as it is. Their profits are soaring. And one reason they’re doing so well is they’re holding down costs, especially payrolls. So why would they ever agree to add more workers now?

From the standpoint of the nation as a whole more Americans working may mean even higher profits overall. But publicly-traded companies aren’t in the business of spending money to help other companies. To the contrary, they’re competing with one another to show high quarterly earnings in order to boost their share prices. They’ll “get in the game” and begin to hire large numbers of Americans only when it helps their own bottom lines.

And when will that be? Not long ago I debated a conservative economist who argued American workers had priced themselves out of the global labor market and would therefore have to settle for lower real wages and benefits before they’d be hired back in large numbers. By his logic, many health and safety regulations would also have to be compromised or abandoned, since they also make American workers more expensive.

If this is the tacit bargain the President is offering business, it’s not a good deal for American workers.

There’s no secret to creating lots of jobs by reducing the median wage, slashing benefits, compromising health and safety at the workplace, and, effectively, reducing the standard of living of millions of Americans. We’ve been doing it for years.

And it doesn’t lead to a “virtuous cycle.” It leads to the kind of economy we’ve had for years – including, right now, the most anemic recovery from a deep trough since the mid-1930s. Indeed, when the debt bubble popped in 2008, we discovered how many Americans no longer had the ability to buy enough to keep the economy going. In this and other ways, 2008 bore an uncomfortable resemblance to 1929.

The alternative is to create lots of jobs with high disposable incomes.

In the short term, this means expanding the Earned Income Tax Credit wage subsidy right up through the middle class, and cutting income and payroll taxes for everyone earning less than $80,000 a year – making up the lost revenues by raising the ceiling on Social Security payroll taxes and hiking marginal taxes on the rich.

In the longer term, this means investing in a world-class education for all the nation’s kids, including college or high-quality technical education beyond high school. Here again, we’d have to rely on the top 1 percent (who now take home more than 20 percent of all income) to foot the bill.

Might the CEOs and top executives who comprise the U.S. Chamber of Commerce go along with this? After all, they profess to be patriotic. As the President said, they “share a deep, abiding belief in this country, a belief in our people, a belief in the principles that have made America’s economy the envy of the world.”

I don’t mean to sound cynical but I doubt it.

The Social Security Flim Flam

by John Lawrence

We have blogged before about social security being like the blind men and the elephant, and how it depends on which part of its anatomy which blind man is touching. President Obama's deficit commission was touching the part that admits that the General Fund will have a $45 billion deficit this year just attributable to the amount that represents the difference in what is taken in by the government in FICA taxes and the amount that is paid out in benefits to retirees. Other blind men have pointed out that the Social Security Trust Fund (SSTF) has a surplus of $2.5 trillion in special Treasury bonds some of which it can cash in to cover the $45 billion gap. 

Which blind man is right? Why, both, naturally. Ever since Reagan in 1983 upped the amount that FICA taxes bring in every year so that more was brought in than paid out, the General Fund has been feasting off the surplus thereby reducing the deficit in terms of money borrowed from the Chinese. The amount borrowed by the General Fund from the Social Security Trust Fund was then made up by the "special" Treasury bonds deposited into the Social Security Trust Fund. So if the national debt is considered to be the amount outstanding of Treasury bonds plus the amount in the Social Security Trust Fund of "special" Treasury bonds, the national debt remains the same whether or not some of the "special" Treasury bonds are cashed in and converted to regular Treasury bonds by selling this amount of debt to the general public (think Chinese). Both are backed by the "full faith and credit of the American government." But not really.

The difference is that bonds sold to the general public are marketable and must be paid back some day or, if you prefer, one investor is paid back by floating another bond to another investor. The bonds in the Social Security Trust Fund are bonds owned, not by the people, but by the US government and need never be redeemed if Congress takes appropriate action. Let me explain. A court case has set the precedent that American citizens have no direct claim to the money in the Social Security Trust Fund even though they've paid into it their entire working life. The saving grace of the whole mess is that the Social Security Trust Fund can go straight to the Treasury Department when it needs to redeem one of the "special" Treasury bonds. It doesn't need Congressional authorization. As we know, the budget has to be authorized by the House of Representatives. They wield authority over the US government's annual budget except for the amount redeemed by the Social Security Trust Fund.

However, the US Congress can vote at any time to (1) alter the amount that social security recipients get every month; (2) to give or not to give COLAs; and (3) to do away with social security as presently constituted altogether. The only reason they don't do any of these things is that social security is so popular and the Democrats defend it. Republicans would get rid of social security in a heartbeat, given the chance, and provided they can convince the American epeople that they would be better off if the program were privatized.

But the biggest rip-off of the American public was perpetrated by Ronald Reagan in his Social Security Amendments of 1983:

The National Commission on Social Security Reform (NCSSR), chaired by Alan Greenspan, was empaneled to investigate the long-run solvency of Social Security. The 1983 Amendments to the SSA were based on the NCSSR's Final Report.[53] The NCSSR recommended enacting a six-month delay in the COLA and changing the tax-rate schedules for the years between 1984 and 1990.[54] It also proposed an income tax on the Social Security benefits of higher-income individuals. This meant that benefits in excess of a household income threshold, generally $25,000 for singles and $32,000 for couples (the precise formula computes and compares three different measures) became taxable. These changes were important for generating revenue in the short term. Also of concern was the long-term prospect for Social Security because of demographic considerations. Of particular concern was the issue of what would happen when people born during the post–World War II baby boom retired. The NCSSR made several recommendations for addressing the issue.[55] Under the 1983 amendments to Social Security, signed into law by President Ronald Reagan, a previously-enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full-benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income.[56][57] The 1983 Amendments also included a provision to exclude the Social Security Trust Fund from the unified budget (In political jargon, it was proposed to be taken “off-budget.”[citation needed] Yet today Social Security is treated like all the other trust funds of the Unified Budget.[citation needed] It is a political way of using a cash budget instead of the more appropriate accrual budget (for all the budgets in the U.S. government), and a way of disguising total debt.[58] This provision also provided for the exemption of Social Security and portions of the Medicare trust funds from any general budget cuts beginning in 1993.[46] This change was one way of trying to protect Social Security funds for the future. As a result of these changes, particularly the tax increases, the Social Security system began to generate a large short-term surplus of funds, intended to cover the added retirement costs of the "baby boomers." Congress invested these surpluses into special series, non-marketable U.S. Treasury securities held by the Social Security Trust Fund. In other words, Congress borrowed the surpluses from the Social Security system; the Treasury securities held by the S.S. Trust fund are U.S. government "I.O.U.s". Under the law, the government bonds held by Social Security are backed by the full faith and credit of the U.S. government. Because the government had adopted the unified budget during the Johnson administration, this surplus offsets the total fiscal debt, making it look much smaller.[citation needed] There has been significant disagreement over whether the Social Security Trust Fund has been saved, or has been used to finance other government programs and other tax cuts.

So none other than Alan Greenspan was responsible for upping the amounts paid into social security on the theory that "some day" the amounts paid out by social security would be there for the baby boomers. These excess amounts were immediately "stolen" by the General Fund in order to make the deficit smaller than it otherwise would have been and so that taxes on the wealthy would not have to be raised. Now that it's time to pay the piper by paying the amounts back into the SSTF, the Republicans, debt conscious as they are, don't want to do it. It would result in non-marketable Treasury bonds which the government owes to itself (hence I.O.Us.) being converted into marketable Treasury bonds that the government owes increasingly to foreigners.

Now the insidious part of this whole mess is that Alan Greenspan's suggestion for increasing the long term solvency of the SSTF in 1983 was that it was to be done on the backs of the poor. Social security is a regressive tax to begin with. There are no deductions and no exemptions. Many poor people pay more in FICA taxes than they do in income tax. Reagan's social security tax increases of 1983 hit the self-employed very hard, particularly the one man or one woman self-employed. All of a sudden they were responsible for paying both the employee's and the employer's share of FICA taxes. The self-employed's FICA taxes went from 9.35% in 1983 to 14% in 1984, an increase of 50%. Thank you, Ronald Reagan. And to top this indignity off, the self-employed do not collect any more upon retirement than they would have if they had made the same amount over the course of their lifetime as an employee even though they've paid twice as much in. Talk about Republican support of small business! So in effect the General Fund raised taxes on the poor in order that it didn't have to raise income taxes on the rich in order to pay routine government expenditures. Now that the poor have been milked sufficiently for 27 years, Republicans don't want to honor the monies borrowed from the SSTF by paying out money from the General Fund which would mean either increasing the national debt or raising taxes. Evidently, Republicans don't count the "special" Treasuries in the SSTF as part of the national debt. The "off budget" non-marketable "special" Treasury bonds owned by the SSTF would have to be converted to "on budget" marketable Treasury bonds and sold to the general public (Chinese).

The way Republicans (not the government) are attempting to do this is not by renegging on the "full faith and credit of the American government." No, they are even more crafty than that. What they would like to do is to change the rules altogether regarding social security which is entirely within their purview. If they are successful at doing this, they will have accomplished two things: 1) they will have successfully paid government expenditures for 28 years partially with a regressive tax on the backs of the poor, particularly the self-employed; and (2) they will have avoided raising taxes on the wealthy to pay back into the SSTF the amounts promised and guaranteed by "the full faith and credit of the American government". They will have finessed the "full faith and credit of the American government," and the IOUs in the SSTF could sit there in perpetuity without ever having to be redeemed! Paying back the "special" Treasuries would be moot! To summarize, this is due to the fact that no American citizen has a legal claim on the social security funds and that Congress has the legal right to change the rules at any time.

So this is why you hear all the talk about privatization and how social security cannot afford to pay recipients in the future. It is because Republicans effectively want to reneg on the "full faith and credit of the American government" but do so in a way that is entirely legal. As a by-product they could rejoice in the fact that they've ripped off the poor for 27 years (thanks to Alan Greenspan, Ayn Rand's protege) and they wouldn't have had to raise taxes on the rich. Extending the Bush tax cuts for the wealthy, which Obama agreed to do, has just perpetuated the rip-off and added fuel to the fire of those clamoring to get rid of or privatize social security.

On a personal note, I paid FICA taxes for most of my life as a self-employed person. That means that I pay both the employee's and the employer's share which amounts to 15.3%, more than Warren Buffett pays on his capital gains taxes. Because there are no deductions or exemptions on FICA taxes, I pay a lot more in FICA taxes then I do in income taxes. I also collect social security and have been doing so for the last eight years even though I continue working. That means that I continue paying FICA taxes even though I'm almost 70 years old and collecting social security. Not only that but I pay taxes on my social security income. I'm supposed to get a "raise" on what I receive in social security each year because I'm continuing to pay into it each year, but that "raise" doesn't amount to a can of dogfood per month, and, I believe, there are some years where I haven't even gotten that. Maybe it's tied into the COLA department. Last year social security recipients notably did not even receive a COLA. You might note that Republicans are very interested in doing away with COLAs altogether for social security recipients. To sum up, even though I'm almost 70 years of age and still working, I pay social security taxes at the rate of 15.3% which is more than the 15% capital gains tax that Warren Bufett and other rich people pay. And, since I receive social security payments, I pay taxes on them too! And because I continue to pay through the nose in FICA taxes, I receive a can of dogfood a month (one or two dollars) as a "raise" almost every year. How about this for a rule change: once a person starts to collect social security and is still working, he or she shouldn't have to pay into it any more. Here's another: self-employed people who have paid double in FICA taxes should receive double in benefits once they start collecting social security. And of course a simple rules change that would "save" social security would be to raise the cap on the amount of income on which FICA taxes are paid. Right now it's around $100,000. Simply raising it to $200,000. would guarantee payouts ad infinitum. But Republicans only want to raise taxes on the poor and redistribute wealth upward. It's not that they don't want government to use the tax system to redistribute wealth. It's just that they are not in favor of redistributing it from rich to poor; that would be socialism. It's only capitalism when wealth is redistributed from poor to rich.

America's Happy Talk Media: No Jobs is Good News!

Friday 04 February 2011

by: Dave Lindorff  |  This Can't Be Happening | Report

The propagandists in the corporate media are scratching their heads trying to figure out how to paint a rosy picture using the shockingly bad employment news out of the Labor Department today.

Here’s the raw data:

The official unemployment rate fell from 9.4% to 9.0%, when the prediction had been that it was going to move up slightly to 9.5%

The number of new jobs added was a net 36,000, the lowest increase since last September, when the economy was still losing jobs.

Here are some of the media quotes:

Associated Press: “The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work.”

MSNBC: “The U.S. labor market slowed sharply last month, generating just 36,000 net new jobs, the fewest in four months, as winter storms depressed payrolls growth. Still, the unemployment rate dropped sharply to 9 percent, the lowest level in nearly two years.”

Fox News: “Economic growth is gaining momentum, with factories busy and service firms expanding, but one critical area still lags: job creation.”

Hoops were being jumped through here to try to make something terrible look good.

Here’s the reality: In a trend that has continued now since October, the number of net new jobs created by the US economy has fallen once again, thanks to layoffs by construction companies, warehouse and transportation companies and especially public employers like state and city governments and school districts, which undercut minor gains in the manufacturing and retail sectors. A gain of 36,000 jobs has to be put in perspective too--the US economy has to add 150,000 new jobs a month just to accommodate the growth in the size of the working age population. We haven't seen those kinds of numbers since October, when the job picture slipped back into the negative zone again.

The average number of jobs created monthly over the last three months was just 83,000, according the the Labor Department.

And as for that 0.4% drop in the official unemployment rate to “just” 9%? That was the result of a decline in the number of people still considered to be “in” the labor force, which reportedly shrank by 504,000. These are people who have given up trying to find a job--for example people over 62 who may have just decided, after trying for a year or two, to retire early, take Social Security, and give up, or who have decided to stay home and take the kids out of daycare to save money, instead of beating the street looking for a nonexistent job. The overall labor participation rate--the percentage of working age Americans actually in the labor market, either working or looking for work--fell in January to a recession low of just 62.4%. That is, fewer than 2/3 of working-age Americans are even in the jobs market these days!

This is not good news. It is terrible news. And no amount of beating around the bush, or even outright cheerleading based upon the cherry-picking, or misinterpreting of the data, can make it good.

The only surprising thing about the latest Labor Department report on employment and unemployment is how wrong-footed the economic media, and the analyst community, were about it. On the eve of the department release of the date, everyone was writing about expectations that job growth would surge to 150,000 or even 185,000, and that the official unemployment rate would tic up slightly to 9.5%. There was even the requisite spin on this anticipated rise in unemployment, which explained that it was actually a good thing because it reflected a rise in the overall size of the labor force as formerly discourage workers come back into the job market to look for work.

Funny how when they’re trying to explain a rise in the unemployment rate, the media propagandists are quick to mention the increasing size of the labor force, but when it turns out that a decline in the overall labor force is the reason for a decline in the jobless rate, they are silent, or bury the news at the bottom of the news story.

When you put this latest sorry jobs news together with last weeks report that housing prices in all the major markets are headed back down for what is called a “double-dip” housing recession, it paints a very gloomy picture for the American economy. And that’s before you factor in the impact of rising oil prices, as traders factor in the growing political turmoil across the Middle East.

It looks like hard times ahead, whatever the corporate media are saying.

The Individual Mandate in the Health Care Bill: Why We Should Trade Broccoli and Asparagus for Hot Dogs and Apple Pie

by Robert Reich

Friday, February 4, 2011

 

The Republican vote to repeal the new health care law is purely symbolic. But there’s one provision of the law that Republicans are likely to try to defund, and they may have the public with them on this. It’s the so-called “individual mandate” – the requirement that everyone purchase health insurance, or pay a fine. According to a recent poll, 60 percent of the public opposes it. They just don’t like the idea of  government telling them they have to buy something.

The mandate is also particularly vulnerable to legal challenge. So far, two federal judges, one in Virginia and another in Florida, have struck it down. They say the federal government has no more constitutional authority requiring citizens to buy insurance than requiring them to buy and consume broccoli, or asparagus.  The Florida judge referred to broccoli; the Virginia judge to asparagus.

Yet the new system can’t work without the individual mandate.  Only if everyone buys insurance can insurers afford to cover people with preexisting conditions, or pay the costs of catastrophic diseases.

The curious thing is Americans don’t mind individual mandates when they come in the form of payroll taxes to buy mandatory public insurance. In fact, that’s the system we call Social Security and Medicare, and both are so popular politicians dare not touch them.

And no federal judge has struck down Social Security or Medicare as being unconstitutional requirements that Americans buy something. 

Social Security and Medicare aren’t broccoli or asparagus. They’re as American as hot dogs and apple pie.

So if the individual mandate to buy private health insurance gets struck down by the Supreme Court or killed off by Congress, I’d recommend President Obama immediately propose what he should have proposed in the beginning — universal health care based on Medicare for all, financed by payroll taxes.

 

Wal-Mart Buys San Diego

by Al Norman

Called Wal-Mart's "#1 Enemy" by Forbes Magazine

Posted: February 4, 2011 07:43 AM, in Huffington Post

It's clear now who is running San Diego.

Wal-Mart needed only 8 weeks and maybe thirty thousand dollars to scare the daylights out of the City Council in San Diego. One local official in San Diego, California called it a "dark day for democracy."

In December of 2010, the City Council voted to override a veto by the Mayor of a zoning ordinance that requires certain big box stores over 90,000 square feet to study their impact on the local economy, on wages, and on traffic. It was a watered down ordinance at best -- but there was one "citizen" who didn't appreciate the City Council vote. Wal-Mart began portraying the ordinance as an outright ban on superstores, and the corporation hired professional signature collectors to put the issue on the San Diego ballot. Wal-Mart knew that San Diego could not financially afford to hold a referendum, so all the folks in Bentonville had to do was throw a head fake. It worked.

Cash-strapped San Diego would have to swallow hard to come up with the $3.4 million cost of a referendum. Wal-Mart put the City Council neatly in a box. The City Council voted 7-1 to rescind the ordinance -- not because they had a change of heart -- but because fighting Wal-Mart was not worth millions of dollars to the Council.

For several years, anti-big box residents have been trying to keep huge stores out of San Diego. In November of 2006, the City Council took an initial vote to ban retail stores of more than 90,000 square feet that use 10% of their interior space to sell groceries or other merchandise that is not subject to sales tax. This ordinance was modeled on similar ordinances in California -- most notably Turlock -- where Wal-Mart failed repeatedly to challenge the law in the courts.

Predictably, Wal-Mart threatened a voter referendum on the big box ban in San Diego. The Mayor of San Diego, Jerry Sanders, told reporters at the time that he would veto the new cap if it went through its required second vote. In early June, 2007, the Council took its final vote to pass the new ordinance. Mayor Sanders vetoed it, and Wal-Mart threatened that it would hire people to gather signatures to put the measure on the ballot in the form of a referendum.

Wal-Mart's threat was enough. One Councilor switched her vote for the ban, to against the ban. The San Diego Union-Tribune called this change of heart a "surprise twist." The vote on the override was a 4-4 tie, so the Mayor's veto killed the big box ordinance. The head of the San Diego Neighborhood Market Association, which represents 2,000 small businesses in the city, said her group was disappointed by the Council's decision to reverse their vote.

But City Councilors did not give up. They came back with a diluted ordinance that simply required large stores to conduct impact studies before being permitted. They said they wanted to "put something in place that also protects small businesses by doing an economic impact report and allowing the communities to have a greater oversight of that process."

Repeating history, Mayor Jerry Sanders vetoed the milder economic impact legislation at the end of November, 2010. "I do not believe it is the City's role to determine where consumers may shop or to provide a competitive advantage to certain retail businesses," Sanders said in his veto message.

Councilor Todd Gloria, who was the lead sponsor of the economic impact ordinance, needed to round up five votes for the measure. This time around, the City Council voted to override Mayor Sanders, and the new ordinance was on the books. But well before the override vote, Wal-Mart began its menacing behavior. The retailer took out full page ads in the Union-Tribune saying the City Council was just carrying water for the unions, and urging San Diego voters to "be a voice for choice."

By mid-December Wal-Mart had launched what the newspaper called "a furious campaign" to gather at least 31,000 signatures to overturn the ordinance. The Arkansas-based corporation hired private firms to gather signatures for them as shoppers left other Wal-Mart stores in the area. Their professional gatherers amassed 54,000 signatures in no time.

Because there were no elections slated in 2011, the city would have to hold a special election, and taxpayers would pick up as much as $3.4 million for Wal-Mart's vote. Wal-Mart's opponents called on the company to pay for the referendum -- since it was the company which stood to gain hundreds of millions in new sales if the big box law was overturned. But the chances of having Wal-Mart foot the bill were as dim as finding Sam Walton selling moon pies in aisle 12.

This week, the City Council once again caved to Wal-Mart. The vote to repeal their November ordinance was 7-1. City Council President Tony Young pointed out all the better uses the city could find for $3 million. "It's been a really tough fight," he told the Associated Press, "but we also have to keep in mind that we do have a fiduciary responsibility to the city of San Diego."

After the vote, Wal-Mart was puffed up like someone who had just won a big pot at Texas Hold'em -- with nothing in the hole. "Thanks to this vote," a company spokesperson said, "we will be able to provide the people of San Diego with improved access to affordable and fresh food, particularly for those living in underserved neighborhoods."

The lone holdout was City Councilor Marti Emerald, who told her constituents, "My vote is not for sale." And Councilor Todd Gloria, who had championed the watered-down ordinance, could only mutter: "Let's be clear, this is a dark day for democracy."

Wal-Mart has fought similar ordinances across the country, arguing that local officials have no right to limit the "freedom to shop," as if this was enshrined in the Bill of Rights somewhere. The company's attempts to challenge such laws in the courts have all failed, so buying elections is the next best option--and less costly. With corporate free speech a bottomless well, fighting Wal-Mart is like going up against a candidate with a massive campaign war chest. Wal-Mart's attitude is that they are too big to fail.

For now, San Diego has been bought and sold by a large corporation. But the day after the vote, a State Senator from San Diego, Juan Vargas, vowed to submit legislation in Sacramento that would accomplish the same goal as the short-lived San Diego law.

"What I did not like," the Senator told the Union-Tribune, "was that one company and one company alone had the power to scare the City Council into changing its mind and that is what happened. That's not right. That's not the way government should work. One company should not have the power to do that."

When Wal-Mart learned of Vargas' initiative, the company told the media that state lawmakers should focus on solving "the state budget woes" instead of "trying to thwart the will of the people." But Wal-Mart should keep its corporate money out of politics, and go back to selling cheap underwear. Cities and towns have the right to limit the scale of large projects, as a way to mitigate adverse impacts on local businesses, traffic, and property values. It's a fundamental local control power.

To "Citizen" Wal-Mart, everything is for sale -- including public policy. If the company doesn't like your local laws, it will lay out some cash to change them. The large retailer's intrusion into local, state and national politics has indeed brought 'dark days' to our democracy.

Al Norman is the founder of Sprawl-Busters, and author of "The Case Against Wal-Mart," and "Slam-Dunking Wal-Mart." His website, http://www.sprawl-busters.com, can also be found on Facebook.

Egyptians Hosed by Hosney: Mubarak Worth $70 Billion; Average Annual Wage in Egypt - $2000.

by John Lawrence

Do you think that revolution in Egypt might have something to do with the fact that President Mubarak is worth $70 billion while the average person makes $2000. a year? I think so. How long will a people live in poverty while their ruler lives in opulent splendor? And most of the young people in Egypt fomenting revolution, the unemployed, are college educated because college education is free in Egypt. So they are smart enough to know that Egypt's elite class, the ones who left Egypt on private jets when the trouble started, are ripping them off. And then we talk about corruption. Is it corruption? No, not at all. Egyptian law requires that foreigners give a local business partner a 51 percent stake in most ventures. And who do you think that foreign corporations chose as their most favored business partner? Corruption? No, not when it's the law. The corruption lies with the lawmakers.

Rioting over food prices is nothing new in Egypt. While an elite class lives in splendor in gated communities, the middle class finds it increasingly difficult to make ends meet:

Twenty percent of Egypt's population lives on less than $2 a day. After a protest over food prices in which three people were killed, the Egyptian government was forced to subsidize the most important food item in Egypt: bread. However, not all Egyptian bakeries sell subsidized bread, which has created huge pressures on those that do. As a result, it is common for many Egyptians to wait many hours before being able to buy bread at subsidized prices. In an average store, one beta costs 10 cents, while in a subsidized shop it costs only one cent. "Unsubsidized bread used to be affordable, but now the prices have skyrocketed," one bakery owner told Al Jazeera. After long hours of waiting in long lines to buy bread all over Cairo, people sometimes lose their temper, with fatal results. Eleven people have died in bread feuds – some in knife fights – in the past 11 months. If the price of food continues to rise, more violence is expected. According to Al Jazeera, Egypt saw widespread riots over bread in 1977, which left up to 70 people dead. Meanwhile, some families have become vegetarian, since they can no longer afford to buy meat. Most Egyptians now rely on potatoes and rice to feed their large families. A mother of five, Hala Suliman told Al Jazeera, "I was forced to give up many important things in my life due to the rise in food prices. My kids want meat and fruits, but I have no money." Suliman and her husband work at a coffee shop and have a combined income of $4 a day, but they have five children to feed.  Each day, Suliman's oldest son waits three or four hours in bread lines instead of going to school. Egyptian journalist Mahmoud El-Askalani told Al Jazeera, "Of course, as a journalist, my salary isn't bad, but I've been affected because the increase in food prices is too high even for the middle class." In fact, he felt so strongly about the rise in food prices that he started an organization called Citizens Against Price Rises. El-Askalani told Al Jazeera, "I want to achieve through this organization a popular movement that stands up to the rise in food prices." He believes that the pro-business government has allowed businesses to make huge profits while many people go hungry. Some families in Egypt have taken their children out of school, are visiting doctors less, and eat smaller meals. According to Heba Kamel of the World Food Programme, the rise of food prices has created "new faces of hunger" as "more and more middle income earners are feeling the crunch of food prices."

So Egyptians are rioting because of vast disparities in wealth, but inequality is actually greater in the US than it is in Egypt.

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they're protesting. However, the U.S. actually has much greater inequality than in any of those countries. Specifically, the "Gini Coefficient" - the figure economists use to measure inequality - is higher in the U.S. Gini Coefficients are like golf - the lower the score, the better (i.e. the more equality). According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45. In contrast: Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40. Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7. And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4. And inequality in the U.S. has soared in the last couple of years, since the Gini Coefficient was last calculated, so it is undoubtedly currently much higher.

So why are Egyptians rioting, while Americans are complacent?

Perhaps it's because Americans don't have to wait in long lines just to get a loaf of bread. The poor can get food stamps, and charities give away free meals. Life at the bottom in America is not that bad - at least yet. But Republicans are working on taking away what social programs there are that still exist in the US. They want austerity for the poor, opulence for the wealthy. Eventually, this will lead to Third World conditions for the poor in the US as well. The neocon model for developing countries is austerity for the poor and laissez faire capitalism for the rich. Young Egyptians are complaining that there are no jobs. We Americans know how to create jobs - you give tax breaks to the rich. Ha! Ha! By this token the Egyptians should give tax breaks to Mubarak and his cronies. This is the neocon model espoused by Milton Friedman that was used so unsuccessfully in Latin America. Will neocons see Egypt as a perfect opportunity for "disaster capitalism"? They would if they were still in charge. But, fortunately, George W Bush, has been replaced by Barack Obama. The neocons are out. Mr. Civility is in. Whewww!

Latin America has always been the prime laboratory for this doctrine. Friedman first learned how to exploit a large-scale crisis in the mid-1970s, when he advised Chilean dictator Gen. Augusto Pinochet. Not only were Chileans in a state of shock following Pinochet's violent overthrow of Socialist President Salvador Allende; the country was also reeling from severe hyperinflation. Friedman advised Pinochet to impose a rapid-fire transformation of the economy--tax cuts, free trade, privatized services, cuts to social spending and deregulation. It was the most extreme capitalist makeover ever attempted, and it became known as a Chicago School revolution, since so many of Pinochet's top aides and ministers had studied under Friedman at the University of Chicago. A similar process was under way in Uruguay and Brazil, also with the help of University of Chicago graduates and professors, and a few years later, in Argentina. These economic shock therapy programs were facilitated by far less metaphorical shocks--performed in the region's many torture cells, often by US-trained soldiers and police, and directed against those activists who were deemed most likely to stand in the way of the economic revolution.

And surprise, surprise, the neocons were active in Egypt during the 1990s with equally unsavory results leading to today's riots:

Any number of political and social factors underpins the current unrest in Egypt—and as always, economics figures in. The upheaval has shined a light on two serious problems facing the country: Most jobs pay too little, and most food costs too much. First, the structural issue: Egypt has posted solid economic growth numbers, particularly in the past half-decade, but that growth has failed to improve the quality of life or income of most of its 80 million citizens. In the 1990s, Cairo embarked on a broad privatization and liberalization project, redoubling its efforts to attract foreign investment again in the mid-2000s. Those efforts succeeded, boosting GDP growth from about 4 percent in 2004 to more than 7 percent in 2008. Egypt has also fared well through the global recession, with gross domestic product increasing 4.7 percent in 2009 and 5.2 percent in 2010, even as other developing economies faltered. But those gains have not been shared broadly. According to World Bank statistics, Egypt's top quintile of earners has increased its share of income since the 1990s, while the country's bottom quintile has seen its portion of the pie get smaller. Poorer Egyptians feel no richer, despite the recent gains. Youth unemployment remains a particularly pernicious problem. About two-thirds of Egyptians are under the age of 30—and that age cohort makes up a whopping 85 percent to 90 percent of the unemployed. In comparison, youths make up about 40 percent of the unemployed in nearby Jordan. (Jobless youths, particularly jobless young men, tend to pose instability risks in general.) Millions more face underemployment or the prospect of dead-end careers in the civil service. And overall, the country remains poor: About 40 percent of Egyptians live on less than $2 a day, and the nation's total GDP is about the size of Connecticut's. Then, there is a secondary problem: a huge run-up in food costs in recent months. According to the Food and Agriculture Organization of the United Nations, the worldwide food price index is at an all-time high—surpassing its 2008 peak, when skyrocketing costs caused global rioting and pushed as many as 64 million people into poverty. The price of oils, sugar, and cereals have all recently hit new peaks—and those latter prices are especially troubling for Egypt, as the world's biggest importer of wheat.

Neoconism, globalization, laissez faire capitalism, Milton Friedmanism - call it what you will. The results have been predictable - the enrichment of a small global class of elite wealthy people and the immiseration of the masses. The elite of Cairo live in gated communities sequestered away from the stink and poverty of downtown Cairo. As the protesters continue their quest for a decent life, one must ponder the question: will the revolution in Egypt turn out to be a "people's revolution," perhaps led by the Muslim brotherhood? Western business interests would prefer that this not happen. Instead they would prefer that the present regime shuffle its players and co-opt any true revolution, a revolution that would put the interests of the people first instead of the interests of a wealthy elite in bed with transnational corporations. The Mubarak family owns real estate in Paris, New York, Beverly Hills and many other places around the world. Although Mubarak has said he wants to die on Egyptian soil, Parisian or American soil might do just as well. He could avoid the stink that way.

Food, Egypt and Wall Street

Published on Friday, February 4, 2011 by CommonDreams.org

by Robert Alvarez

The dramatic rise in food prices is fueling a great deal of discontent in Tunisia, Egypt and elsewhere. It is a deep under current propelling many of the poor, facing prospects of starvation to resort to the streets and to violence.   According to the United Nation's Food Agency (Food and Agriculture Organization -- FAO) world food prices are up for the 7th month in a row and are likely to remain close to the record high reached in December 2010. There's no end in sight to this destabilizing battle with food price inflation in places like Egypt, where more than half of an average income goes for food.  According to the U.S. State Department, more than 60 food riots occurred worldwide over the past two years.

In March 2008, a dramatic spike in food prices led thousands of people on the brink of starvation in Egypt to violently riot -- sending a seismic shock wave through the Mubarak regime. After the Egyptian military was able to distribute enough wheat to dispel the rioting, efforts to stockpile wheat by the Mubarak government have failed, as food prices continue to hover at record highs. 

Many reasons are given in the media for this problem ranging from soaring demand, cuts in food subsidies, droughts, and government mandates to use more grain-based bio-fuel.  But, another significant factor is at play: unfettered speculation by investment banks.  As noted in USA today, in 2008, "the bulls may not be running on Wall Street, but they're charging in the commodities pits." http://www.usatoday.com/money/industries/food/2008-02-11-food-prices_N.htm

At issue are the still deregulated commodity markets ushered in by the Clinton Administration and the U.S. Congress with the passage of the Commodity Futures Modernization Act of 2000. Before this law, the Commodity Futures Trading Commission (CFTC) served as a cop on the beat, enforcing rules that prevent distortion of manipulation of prices beyond normal supply and demand.  But Wall Street Banks and companies such as ENRON, and British Petroleum were determined to make a lot more money from speculation by exempting energy-derivative contracts and related swaps from government oversight.  And so, the 2000 law allows entities that have no stake in whether adequate amounts of food and fuel are available for ordinary people and commodity-dependent businesses, to make huge sums of money by gambling with other people's money.

Soon after passage of the 2000 law "dark" unregulated futures trading markets emerged, most notably the Intercontinental Exchange (ICE) in London -- created by Wall Street and European investment banks and several oil companies. A key practice involves "over the counter index trading" in which hundreds of billions of dollars of pension, sovereign wealth other institutional funds are used to flood "dark" commodity markets to buy and hold futures contracts without an expiration date or oversight. When it's time to make money on a losing bet, these funds are withdrawn causing commodity price crashes and economic instability.  These transactions do not involve customary "bona fide" commodity traders, such as an airline company hedging on the price of jet fuel by purchasing futures contracts. As noted by Michael McMasters, a prominent hedge trader before a U.S. Senate panel in 2008, this amounts to "a form of electronic hoarding and greatly increases the inflationary effect of the market.  It literally means starvation for millions of the world's poor." http://hsgac.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=3fe95f08-0b7d-45d0-94ea-4c4346c353de

Some world leaders are willing to speak out against the pernicious role of "dark" commodity markets. Recently, French President Sarkozy warned of further unrest and even war at the Davos forum, unless commodity speculation is reined in -- something that is being fought bitterly by Wall Street and Congressional Republicans.  The Dodd/Frank Financial Reform Law places some restrictions on this practice by the Commodity Futures Trading Commission (CFTC). In particular, the CFTC is beginning the process of weeding out "non bona fide" investment bank speculators.   True to form, House Republicans are demanding that the CFTC slam on the brakes and are planning hearings and legislation to hamstring these efforts.

The spontaneous mass uprising of ordinary people in the Middle East against their authoritarian regimes has many root causes. One that should receive much greater attention is the unfettered speculation over food supplies by powerful private financial institutions that could care less about world-wide starvation and its impacts.

Robert Alvarez is a Senior Scholar at the Institute for Policy Studies and served as a senior policy advisor to the U.S. Secretary of Energy from 1993 to 1999.

The Jobs Report, and America’s Two Economies

by Robert Reich

Friday, February 4, 2011

At a time when corporate profits are through the roof, the Dow is flirting with 12,000, Wall Street paychecks are fat again, and big corporations are sitting on more than $1 trillion in cash, you’d expect jobs be coming back. But you’d be wrong.

The U.S. economy added just 36,000 jobs in January, according to today’s report from the Bureau of Labor Statistics. Remember, 125,000 are needed just to keep up with the increase in the population of Americans wanting and needing work. And 300,000 a month are needed — continuously, for five years — if we’re to get back to anything like the employment we had before the Great Recession.

In other words, today’s employment report should be sending alarm bells all over official Washington. Granted, unusually bad weather may have accounted for some of the reluctance of employers to hire in January. But even considering the weather, the economy is still terribly sick. (Technical note: The official rate of unemployment fell to 9 percent from 9.4 percent, but that’s because more workers have left the labor market, too discouraged to continue looking for work. The official rate reflects how many people are actively looking for work.)

We have two economies. The first is in recovery. The second remains in a continuous depression.

The first is a professional, college-educated, high-wage economy centered in New York and Washington, that’s living well off of global corporate profits. Corporations continue to make money by selling abroad from their foreign operations while cutting costs (especially labor) here at home. Wall Street is making money by taking the Fed’s free money and speculating with it. The richest 10 percent of Americans, holding 90 percent of all financial assets, are riding the wave. And their upscale spending has given high-end retailers and producers a bounce.

The second is most of the rest of America, and it’s still struggling with a mountain of debt, declining home prices, and job losses. In coming months most Americans will also be contending with sharply rising prices of food and fuel.

Our representatives in Washington see and hear mostly the first economy. The business press reports mainly on the first economy. Corporate and Wall Street economists are concerned largely with the first economy.

But the second economy will determine our politics in 2012 and beyond.

And not even the first can be sustained permanently on its own. Corporate profits cannot continue to rise on the basis of foreign sales (which are slowing as Europe adopts austerity and China raises interest rates), the purchases of the richest 10 percent of Americans (which are dependent on a rising stock market), and cost-cutting measures at home (which are necessarily limited). Without a strong and broadly-based middle-class recovery, America’s big money economy will fall in on itself. A major stock market “correction” is a certainty.

Why the Republican Budget Plan is a Hairball

by Robert Reich

Thursday, February 3, 2011

The federal budget is $3.8 trillion.

The Republicans have just come up with their plan to cut the federal budget. They’ve found $32 billion of cuts.

Their fiery campaign rhetoric, fierce determination, righteous indignation, and bloviated anger have summoned forth a hairball.

What happened to John Boehner’s $100 billion budget-cutting commitment? What became of Paul Ryan’s big ideas? Where did all the roaring and raging on the right during the 2010 election go?

This is embarrassing.

I once had a dog who thought he was the fiercest thing in the county. He wasn’t the brightest dog in the world. I brought him to a friend’s farm where he spied a large bull far off in the corner of a large field. From that vantage point the bull didn’t look very big, so my dog took off after it — howling and yelling to the skies. But as he got closer to the bull, I could see him slowing way down, and his howling turned into a whine. And by the time he came within five feet of the bull he skidded to a stop and turned silent. When the bull looked in his direction, my dog put his tail between his legs and ran.

As Republicans got closer to Social Security, Medicare, national defense, and homeland security, their bark grew quieter and their fierceness turned tail. They discovered the job of tackling the budget will be far bigger and tougher than it looked from the far end of the campaign trail. Americans don’t want big spending cuts. They want to cut what doesn’t work.

And now congressional Republicans have got to explain this to the Tea Partiers, who are still howling and yelling in the next field.

Tea Party History Lesson

 

Egypt: Lessons in Democracy

Published on Wednesday, February 2, 2011 by YES! Magazine

Could 2011 be to the Arab world what 1989 was to Eastern Europe?

by Stephen Zunes

Together, the unarmed insurrection that overthrew the Ben Ali regime in Tunisia and the ongoing uprising in Egypt have dramatically altered the way many in the West view prospects for democratization in the Middle East. The dramatic events of recent weeks have illustrated that for democracy to come to the Arab world, it will come not from foreign intervention or sanctimonious statements from Washington, but from Arab peoples themselves.

While many observers have acknowledged how unarmed pro-democracy insurrections helped bring democracy to Eastern Europe, Latin America, and parts of Asia and Africa, they had discounted the chances of such movements in the region, despite Tunisia being far from the first.

There has actually been a long history of nonviolent pro-democracy struggle in North Africa and the Middle East. Egypt wrested its independence from Great Britain as a result of a massive nonviolent resistance campaign launched in 1919. In Sudan, military dictators were ousted in nonviolent insurrections in 1964 and 1985, though the democratic experiments that followed were cut short by military coups a few years later. In 1991, in a nonviolent struggle succeeded in ousting the Traore dictatorship in Mali, despite the massacre of hundreds of peaceful protesters by the armed forces. Though it is one of the poorest countries in the world, Mali has been one of the most stable and democratic countries in the region ever since. The recently published book Civilian Jihad: Nonviolent Struggle, Democratization and Governance in the Middle East documents numerous other popular pro-democracy movements throughout the Arab world.

The current struggle in Egypt—the center of Arab media, scholarship, and culture—has enormous ramifications for the region as a whole. The predominantly young secular activists who initiated the struggle reject not only the U.S.-backed dictatorship of Hosni Mubarak but also conservative Islamist leaders; they have put together a broad coalition of young and old, Muslim and Christian, poor and middle class to challenge a brutal corrupt regime which has held power for nearly thirty years. Like-minded civil society activists are organizing elsewhere. Indeed, 2011 could be to the Arab world what 1989 was to Eastern Europe.

In the early days of the uprisings, top U.S. officials defended the United States' close ties with the authoritarian leaders of Tunisia and Egypt, and, making lukewarm statements about the need for "reform" and urging "both sides" to refrain from violence (despite the far greater violence from state authorities), they refused to back the pro-democracy movements, call for democratic change, or threaten the suspension of U.S. military aid. However, the very day Tunisian dictator Zine el Abidine Ben Ali fled Tunisia, President Obama came out with a strong statement lauding the pro-democracy movement and criticizing the dictator's oppression. Similarly, in the early days of the Egyptian protests, Obama administration officials made similar calls for "restraint" on "both sides," speaking only in terms of reform from within Hosni Mubarak's authoritarian regime. By the fifth day of the demonstrations, however, apparently not wanting to be on the wrong side of history, the Obama administration started speaking in terms of a transition to democratic rule and making it clear that large-scale repression of nonviolent protesters—which would presumably be implemented with U.S. supplied weaponry—would be unacceptable.

These shifts illustrate that, despite the longstanding sense of fatalism among Arabs that Washington will ultimately impact what happens on the "Arab street," the Arab street has proven itself capable of impacting what happens in Washington.

This change is long overdue. The Obama administration, in rejecting the dangerous neoconservative ideology of its predecessor, had fallen back onto the realpolitik of previous administrations by continuing to support repressive regimes through unconditional arms transfers and other security assistance. Indeed, Obama's understandable skepticism of the neoconservative doctrine of externally mandated, top-down approaches to democratization through "regime change" turned into an excuse for further arming these regimes—which then use these instruments of repression to subjugate popular, indigenous, bottom-up struggles for democratization.

At the same time, there was a subtle, but important, shift in the U.S. government's discourse on human rights when Obama came to office two years ago. The Bush administration pushed a rather superficial structuralist view. It focused, for instance, on elections—which can, in many cases, be easily rigged and manipulated—in order to change certain governments for purposes of expanding U.S. power and influence. Obama has taken more of an agency view of human rights, emphasizing such rights as freedom of expression and the right to protest, recognizing that human rights reform can only come from below and not imposed from above.

Until now, this had largely been rhetorical. Even now, as of this writing, the United States still needs to take a firmer stance toward Mubarak and the Egyptian military. And, regarding U.S. policy in the region as a whole, the United States needs to stop propping up other Arab dictators and supporting the Israeli occupation through ongoing military assistance.

However, the Obama administration has been reminded of where power actually comes from: even if a government has a monopoly of military force and even if a government has the support of the world's one remaining superpower, it is still ultimately powerless if the people refuse to recognize its authority. Through general strikes, filling the streets, mass refusal to obey official orders, and other forms of nonviolent resistance, even the most autocratic regime cannot survive.

One cannot help but admire the Egyptians, who—like the Tunisians, Serbians, Filipinos, Poles, and many others before—have faced down the teargas, water cannons, truncheons, and bullets for their freedom. However, as long as the United States remains the world's No.1 supplier of security assistance to repressive governments in the Middle East and elsewhere, the need for massive nonviolent action in support for freedom and democracy may be no greater than here.

Stephen Zunes wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Stephen is a professor of Politics and chair of Middle Eastern Studies at the University of San Francisco. He chairs the academic advisory committee for the International Center on Nonviolent Conflict and is the author of Nonviolent Social Movements and Tinderbox: U.S. Middle East Policy and the Roots of Terrorism.

Inequality Drives Egyptians to Streets, But Ours Is Worse

Published on Tuesday, February 1, 2011 by GRITtv

by Laura Flanders

It's amazing what inequality can drive people to, eventually. Just look at Egypt.

“These big guys are stealing all the money,” one 24-year-old textile worker standing at his second job as a fruit peddler told a reporter this weekend. "People are desperate.”

"I wish we could be like the United States with a democracy, but we cannot," said another.

And so they protest, regardless of police batons, curfews and shootings. With over a 150 estimated dead, a march of millions is scheduled for Tuesday.

In spite of what some on Fox News (and the Israel lobby's camp) sought to argue this weekend -- namely that the protests were all the work of Islamist radicals -- every report from the ground contradicts that. As in Tunisia, the protesters are driven by fury at poverty, lack of options, and the looting of their state by the super powerful.

It's an equation we understand -- elsewhere: a massive gap between rich and poor is inconsistent with democracy. But before you get carried away with third world conditions there, try here. On Friday a guest blogger at Yves Smith's Naked Capitalism blog noted a remarkable fact: the U.S. actually has much greater inequality than Egypt—or Tunisia, or Yemen.

The Gini Coefficient is a number economists use to measure inequality, and the U.S. is ranked as the 42nd most unequal nation — Egypt is 90th.

It's not just numbers — we can see it every day. As Edwidge Danticat told us last week, “There are places in the US that are like Haiti, that are like Zimbabwe.”

While 22 million were searching  for jobs in the US this week, Goldman Sachs tripled Chief Executive Lloyd Blankfein's base salary and awarded him $12.6 million of stock, a 42 percent increase from '09. The billionaire Koch brothers threw a lavish secret party for their looter cronies, to talk about their election plans.

The average American may not be suffering the way the average Egyptian has been but as Danticat noted, there's a tendency to exaggerate the suffering of what we think of as the “third world” while assuming that the U.S. has it better.

As for that anti-democratic gap between rich and poor -- not better, worse. And here too, our democracy is suffering. What are we going to do about it?

When Corporations Choose Despots Over Democracy

Published on Wednesday, February 2, 2011 by TruthDig.com

by Amy Goodman

“People holding a sign ‘To: America. From: the Egyptian People. Stop supporting Mubarak. It’s over!” so tweeted my brave colleague, “Democracy Now!” senior producer Sharif Abdel Kouddous, from the streets of Cairo.

More than 2 million people rallied throughout Egypt on Tuesday, most of them crowded into Cairo’s Tahrir Square. Tahrir, which means liberation in Arabic, has become the epicenter of what appears to be a largely spontaneous, leaderless and peaceful revolution in this, the most populous nation in the Middle East. Defying a military curfew, this incredible uprising has been driven by young Egyptians, who compose a majority of the 80 million citizens. Twitter and Facebook, and SMS text messaging on cell phones, have helped this new generation to link up and organize, despite living under a U.S.-supported dictatorship for the past three decades. In response, the Mubarak regime, with the help of U.S. and European corporations, has shut down the Internet and curtailed cellular service, plunging Egypt into digital darkness. Despite the shutdown, as media activist and professor of communications C.W. Anderson told me, “people make revolutions, not technology.”

The demands are chanted through the streets for democracy, for self-determination. Sharif headed to Egypt Friday night, into uncertain terrain. The hated Interior Ministry security forces, the black-shirted police loyal to President Hosni Mubarak, were beating and killing people, arresting journalists, and smashing and confiscating cameras.

On Saturday morning, Sharif went to Tahrir Square. Despite the SMS and Internet blackout, Sharif, a talented journalist and technical whiz, figured out a workaround, and was soon tweeting out of Tahrir: “Amazing scene: three tanks roll by with a crowd of people riding atop each one. Chanting ‘Hosni Mubarak out!’ ”

Egypt has been the second-largest recipient of U.S. foreign aid for decades, after Israel (not counting the funds expended on the wars and occupations of Iraq and Afghanistan). Mubarak’s regime has received roughly $2 billion per year since coming to power, overwhelmingly for the military.

Where has the money gone? Mostly to U.S. corporations. I asked William Hartung of the New America Foundation to explain:

“It’s a form of corporate welfare for companies like Lockheed Martin and General Dynamics, because it goes to Egypt, then it comes back for F-16 aircraft, for M-1 tanks, for aircraft engines, for all kinds of missiles, for guns, for tear-gas canisters [from] a company called Combined Systems International, which actually has its name on the side of the canisters that have been found on the streets there.”

Hartung just published a book, “Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.” He went on: “Lockheed Martin has been the leader in deals worth $3.8 billion over that period of the last 10 years; General Dynamics, $2.5 billion for tanks; Boeing, $1.7 billion for missiles, for helicopters; Raytheon for all manner of missiles for the armed forces. So, basically, this is a key element in propping up the regime, but a lot of the money is basically recycled. Taxpayers could just as easily be giving it directly to Lockheed Martin or General Dynamics.”

Likewise, Egypt’s Internet and cell phone “kill switch” was enabled only through collaboration with corporations. U.K.-based Vodafone, a global cellular-phone giant (which owns 45 percent of Verizon Wireless in the U.S.) attempted to justify its actions in a press release: “It has been clear to us that there were no legal or practical options open to Vodafone ... but to comply with the demands of the authorities.”

Narus, a U.S. subsidiary of Boeing Corp., sold Egypt equipment to allow “deep packet inspection,” according to Tim Karr of the media policy group Free Press. Karr said the Narus technology “allows the Egyptian telecommunications companies ... to look at texting via cell phones, and to identify the sort of dissident voices that are out there. ... It also gives them the technology to geographically locate them and track them down.”

Mubarak has pledged not to run for re-election come September. But the people of Egypt demand he leave now. How has he lasted 30 years? Maybe that’s best explained by a warning from a U.S. Army general 50 years ago, President Dwight D. Eisenhower. He said, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

That deadly complex is not only a danger to democracy at home, but when shoring up despots abroad.

© 2011 Amy Goodman

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 900 stations in North America. Goodman is the first journalist to receive the Right Livelihood Award, widely known as the 'Alternative Nobel Prize' for "developing an innovative model of truly independent grassroots political journalism that brings to millions of people the alternative voices that are often excluded by the mainstream media." She is the author of “Breaking the Sound Barrier,” recently released in paperback and now a New York Times best-seller.