California Free Press

We Don't Need More Stuff; We Need a Different Way of Distributing the Stuff We Have.

by John Lawrence

Everyone is talking about how to get the economy moving again and how to create jobs. President Obama talks about "winning the future." This means more education, more entrepreneurialism, more new industries, more new products for consumers to buy. Surely, all this new economic activity is exactly what we need or is it? Since the GDP of the US is dependent on consumers consuming to the tune of 70% of the entire economy, it stands to reason that for the economy to expand, consumers need to consume more. But wait a minute. We are already stuffed to the gills with products rammed down our throats by TV advertisers. Maybe what we need is less consumption. Americans are already experiencing an epidemic of obesity. We should be consuming less fast food. But that would bring the profits of McDonald's down. They might even have to lay off employees. Their stock might plummet. Wal-Mart offers us a plethora of cheap crap made in China. But if we stopped buying it, Wal-Mart's profits would go down, their stock price would tumble and the Dow Jones average might even find itself in bear market territory. Everyone agrees that this would be terrible for the economy. But it might be good for the citizens.

I say we need to participate less in the market economy and be more self-subsistent. This would result in a decrease in GDP, but an increase in citizen independence. The more we rely on ourselves to fulfill our needs, the less we rely on the market economy and the better off we are when that economy goes kerflooey. The recent economic meltdown was all about Wall Street and their shenanigans. It was of paramount importance to bail out Wall Street and then all good things would follow. Such was the conventional wisdom. Only good things didn't follow. People's homes were foreclosed on en masse even when banks couldn't prove that they held title to the houses. Main Street, the middle class - they were not protected at all. The culprits who caused the crisis were bailed out. The average citizen who lost his job and his house and maybe even his wife was not bailed out at all. In fact Republicans are doubling down on destroying what remains of the safety net which might have helped these unfortunates to maintain the skeleton of a half way decent way of life. Congress has continued to sponsor and uphold legislation that encourages corporations to outsource jobs. The budget is to be balanced on the backs of the poor and middle class and not by asking the rich to contribute a little more. We are rapidly retreating to the Dickensian era where to ask for a little more porridge was to be answered with a "certainly not!"

What we need is not more consumption of cheap Chinese produced crap or even newly minted crap from our own entrepreneurs. What we need is a better system of distributing the immense amount of stuff that we are already capable of producing. And in particular we are in need of a more widely distributed system of ownership so that profits redound to the average citizen and not to the upper .1% who are becoming immensely wealthy far beyond their needs while the poor and middle class are being reduced to penury and poverty. What we need is a government that looks out for the little guy, not one who is all for the competitive struggle to produce more and more goods and win the future that way. How about winning the future by taking back our ability to be self-sustaining? We need to return to an era when people produced a large amount of their own food by growing it themselves instead of relying on the marketplace of consumer provided food by large agricorporations which use pesticides, herbicides and hormones to provide us with food which in most cases will not kill us right away. That will take place in 30-40 years when cancer sets in. But in a lot of cases of e coli and salmonella brought on by filthy conditions for animals in factory farms, it will kill us or sicken us immediately. So profits are concentrated in the hands of a few corporations instead of being widely distributed which would take place if there were widespread family gardening which also produces healthier foods. If everyone farmed to some extent, we would all be better off but GDP and corporate profits would decline because we wouldn't be participating to such a great extent in the market economy.

Sociologists decry the fact that in many parts of the world people are living on $2. a day. But those in this category that are rural may in fact be 98% self-subsistent. In other words they are providing for their own needs without participating in the market economy or are only participating to the tune of $2. a day. On the other hand the urban poor who are living on $2. a day may not be in a position to be self-subsistent, and they are truly poor because they have to meet all their needs by means of the market economy and $2. a day doesn't go very far. Just recently many Americans met probably 75% of their needs without participating in the market economy. Take my grandparents, for example. My Grandfather lived and worked on a small dairy farm. They had chickens and hogs and a large garden. So they provided perhaps 90% or more of their own food instead of buying it at the market. They sold milk into the marketplace in exchange for dollars which they used to purchase what they could not provide for themselves. Instead of buying oil or gas, my grandfather farmed with horses and he grew the fuel that they consumed with the result that he did his own energy production and did not have to depend on Exxon Mobil or Chevron for energy. And as a bonus horses did not pollute. Since chemicals were not available, his farming was organic by default. He learned carpentry and built his own buildings with the result he didn't have to hire a contractor. They were largely self-sufficient and self-subsistent. Of course, they made their own clothes instead of buying them in a store. Women had a whole variety of functions within the household instead of vying for jobs in the marketplace, another way in which they were self-sufficient. They actually weathered the Great Depression quite well since they weren't dependent on the market economy. Even my parents who had government jobs as teachers, the kind that Republicans are attacking today, raised chickens and had a really large garden from which they provided much of their own food. And women used to bake instead of buying prepared foods.

So maybe the answer to the economic malaise that we find ourselves in today will be solved not by creating new industries to manufacture more and better stuff but by figuring out ways to be less dependent on the marketplace and more self-sufficient. Profit centers need to be more widely dispersed instead of profits ending up in the hands of the Fortune 400. Think about it: when you participate in the market economy, the money you spend ends up in the hands of a very few and select group of corporations and wealthy individuals and families. These individuals, families and corporations have effectively captured government through their paid lobbyists so that government operates solely in their interests. Jefferson envisioned a country of independent yeoman, small farmers and craftsmen. In today's America, there are hardly any such people. Instead most rely on a job to provide them with income which they use to provide for all their needs by purchasing goods and services in the marketplace. As more and more people lose their jobs because the jobs are outsourced or are replaced by automated machines, there is no place to go but down. But the self-employed, the self-sufficient and self-subsistent will be able to provide for themselves and their families irregardless of what is happening in the marketplace. Those absolutely dependent on wages to make a living are already becoming neo-serfs needing two or three minimum wage jobs to make a go of it. The worst off are dependent on charity.

 

 

Postcard from Greece: This Should Not be About Austerity, It's About the Future of Democracy

by Arianna Huffington, from Huffingtonpost, June 28, 2011

Given that the Greeks invented democracy, it's only fitting that they're now being given the chance to reinvent it. And yes, I know we Greeks have a reputation for mythmaking and drama -- but, as I found out during my trip to Greece last week, those really are the stakes.

Until I went over and witnessed what's happening, I too had become convinced that the real issues were the ones the media were obsessively covering: the effects of a potential sovereign default on the Euro and worries about the crisis spreading to other European countries.

But here's the bigger issue: Can a truly democratic movement break the stranglehold of corrupt elites and powerful anti-democratic institutional forces that have come to characterize not just the politics of Greece, but most Western democracies, including our own? Greece is only an extreme example of an unfolding seismic social shift that is challenging democracies the world over.

What happens in Greece might very well tell us whether democracy will recover from the crisis of legitimacy exacerbated by the financial crisis or whether it will shrink -- undermined by the very forces that brought on the crisis in the first place.

It's way too early to tell whether the forces of democracy will prevail, but I came away extraordinarily moved and heartened by the courage, passion, engagement and dedication I witnessed during a trip in which three different perspectives converged.

First and foremost, there was The Square.

The happenings in Cairo's Tahrir Square led the news for weeks earlier this year, but from what we are being shown back in America, you wouldn't know that there's a remarkably similar scene unfolding in Athens. Not only are the physical setting, the demographics of the participants, and the way they're being organized similar to Tahrir Square, but so are the demands being made. In Athens, the place of the moment attracting thousands of people a day is Syntagma Square, situated directly across from the Greek parliament.

The movement has become a permanent encampment in Syntagma, with a growing number of people taking up residence in the square, vowing not to leave until their demands are met. Of course, the young are well-represented there -- no surprise when unemployment among Greek youth runs as high as 40 percent -- but I was struck by the wide range of participants. Young, old, activists, pensioners, unemployed, self-employed, they're all there, every day and every night. As you'd expect, various political parties and organized groups -- some resorting to violence -- are trying to co-opt the square. Indeed, on Tuesday, a demonstration of 20,000 protesters that started peacefully disintegrated when a group of mostly young people began hurling stones at the police.

As has recently been the case around the world, the protests are being fueled by social media. Given that the Greeks have always been all about connection, expansiveness and intimacy, it's no surprise that social media have combined with the Greek personality to create a perfect storm of expression, engagement and democracy. According to MRB Hellas, from 2008 to 2010, the number of Greeks using social networks grew by 350 percent. Currently, almost 92 percent have at least one social media account, making it much easier for protests to be coordinated via a Facebook page -- "Indignants at Syntagma" (the name taken from the Spanish protest, "los indignados") -- which more than 152,000 people have "liked."

Although social media are being used to connect the square to the rest of the country and help draw people in, once in the square itself, people are using good old face-to-face interaction to connect and organize. As Costas Douzinas, a law professor at the University of London's Birkbeck Institute, wrote in the Guardian, "the parallels with the classical Athenian agora, which met a few hundred metres away, are striking."

The way it works, explains Reuters' Renee Maltezou, is this:

Every night, the "people's assembly" gathers and decides, by a show of hands, what will be discussed. A volunteer and rotating "coordinating committee" then gives anybody who wants to speak a slip of paper with a number on it. Speakers speak for two minutes in the order numbers are drawn. The assembled then vote, with results quickly put up on a website. As Douzinas notes, "no issue is beyond proposal and disputation," and participants include not just students, activists and pensioners, but economists, professors and philosophers. When not debating and voting, they form teams to deal with first aid, garbage collection and communications -- there's even a "keep cool team" to settle disputes.

Everywhere I went I was stunned by the level of engagement -- it's not just those physically at the square who are all in. The sense I came away with was that they're all all in. Waiters, taxi drivers, storekeepers, salespeople, anybody sitting next to you at dinner -- they're all talking about the same thing.

"The experience of standing daily and confronting the parliament opposite has changed the politics of Greece for good and made the elites worried for the first time," writes Douzinas. "Their common demand is that the corrupt political elites who have ruled the country for some 30 years and brought it to the edge of collapse should go."

What happens in Greece is not so different from what has been happening in America: a few profit, but when the chickens come home to roost, the pain is not equally distributed -- and what happened is suddenly everybody's fault.

So, yes, there's a lot of anger and resentment in the square -- most of it very justified -- but there's also an incredible amount of hope, and, considering how hard things are for millions of people in Greece, an incredible lack of cynicism. This isn't just an "anti" protest -- there's a lot of "pro" in it, as well. "What I like about this square is that people discuss things, they express themselves without fear," said 18-year-old student Stavroula Koloverou. "We want the system to change and we want all traditional politicians out. We want young people suffering in this system who still have dreams to take over."

Still have dreams -- it's a testament to the Greek character when so much of what they're living through is a nightmare.

"They don't just represent the Greek people, they are the people," said Peter Bratsis, a lecturer in political theory at the UK's University of Salford. "It's beyond the control of the political parties and this is something different."

The second perspective I got on my trip came during dinner with the Greek prime minister, George Papandreou. Even those who don't follow Greek politics will likely recognize his name. That's because, as the Financial Times' Tony Barber explains, Papandreou is a member of the "politikos kosmos," the "entrenched semi-hereditary political caste that has ruled and misruled Greece for as long as anyone can remember." Not only was his father Andreas prime minister for two terms, his grandfather held the position for three terms.

And the task confronting the son/grandson is one worthy of the great Greek dramatists. As Barber writes, Papandreou must now rescue his country by "dismantling the system of gluttonous patronage and parasitism on the state that his father Andreas constructed." So far it's been a rocky road. Assuming office in the middle of the crisis, in 2009, Papandreou's tenure has been a precarious balancing act of trying to satisfy the draconian demands of the EU while dealing with the increasing unrest and economic misery of his people. The week before I met him, he'd just narrowly survived a vote of no confidence.

We met for dinner at Kastelorizo, a restaurant in Kifissia, a suburb of Athens where the prime minister lives and where, as it happens, I was born. We were joined by his wife, Ada, whom he met more than 20 years ago when he was campaigning in Patras in the Peloponnese, where she was born. Eating fresh fish followed by fresh fruit, we talked about the country's deep-seated problems, but also about all the incredible possibilities. The saying "a crisis is a terrible thing to waste" has never been more true than it is in today's Greece. The decay has been allowed to fester for so long, nothing short of a major crisis could have precipitated the widespread demands for reform.

And though many of the demonstrators camped out at Syntagma are clearly directing their frustrations toward his office, the prime minister spoke about them with understanding and a clear awareness not only of their power and authenticity, but also their potential. Can he harness their energy, idealism, ingenuity and passion?

"What they say is correct, we have to change," he told me. "Corruption is everywhere -- and even when we change our laws you cannot eradicate corruption overnight." He is, he said, trying to make the government more transparent by posting every bill online before it gets voted on by parliament. He's also posting job listings. "We posted 87 openings," he told me, "and received 28,000 applications, which created its own problems in the way we handled the avalanche."

But the big problem is that, as he told me, "Greece needs a new narrative." Whether he can provide that narrative is unclear, but this is clearly a man who chafes at the portrayal of his people that dominates the European media. "There is so much good being done, so much creativity and innovation, that are not getting any attention," he said, "while everyone is focusing just on what's dysfunctional."

He went on to talk about a woman who started a snail farm in Milatos that now exports snails around the world. He also told me about a farmer growing olive oil in Kritsa in Crete who branded it Lambda and now sells it at Harrods. "We have such an over-abundance of resources," he said.

The question he's facing is whether any politician remotely associated with the old guard -- however well-intentioned -- can be the one to tap into these resources and build on what has been awakened. Yes, Greece is corrupt, and the problems exist at all levels. It's a place where playing by the rules came to be seen as for suckers only, creating a system of clientelism, in which attaching yourself to a powerful individual or political machine for income was seen as the smart thing to do.

But now people are rushing, quite literally, to reengage in civic life. They want to start fresh and awaken the public good. They want a real democracy again. And my daily interactions with Greeks during my visit were a reminder of the incredible talents and abilities and resources that are being wasted.

Nevertheless, the media's focus is on the shrunken and pinched debate about austerity. Instead of a debate about how to tap into the human and natural resources Greece teems with, all we hear is about how deeply services should be cut. Well, the Greeks don't do pinched well. They're an expansive lot, and if any people can pry open this dangerously narrow debate with their humanity, it's the Greeks. Because this isn't just a policy debate -- it's a debate about what the big outlines of what we call democracy are going to be for the next century. The forces of the status quo would have you believe austerity is the answer -- that it's the answer in Greece, the answer in Spain, the answer in the UK and the answer in the U.S. But it's also clear that it's not just the Greeks who want something more out of civic life than they're currently getting.

In fact, austerity is not the answer even in the purely economic debate. As the Guardian's Michael Burke shows, the problem Greece is facing isn't due to too much spending. "Falling taxation revenues are the problem," he writes, "as the cuts themselves have sent the economy into a tailspin." He also explodes another Greek myth (the non-ancient kind) prevalent in Europe right now -- that the Greeks are lazy, and that's what brought their problems on. As he notes, Greeks work the second-longest weekly hours of any workers in Europe and have the highest level of weekend hours worked.

Which brings me to the third perspective of my trip -- inspired by the Special Olympics. I was privileged to attend the opening days of the group's World Summer Games as the guest of Coca-Cola CEO Muhtar Kent, who serves on the Special Olympics board. If you ever have the chance to go to a Special Olympics event, please do so, as your life will be much richer for it. I was especially struck by the words of His All Holiness, Bartholomew I, the head of the Eastern Orthodox Church. In a small gathering he held with some of the athletes, he called the games "an extraordinary invitation to healing."

And watching the opening ceremonies, it was clear he wasn't talking just about the athletes. Sharing in the triumph of the human spirit overcoming adversity is indeed healing. And what's going on in Greece right now, to paraphrase the Patriarch, is an extraordinary invitation to reengage. It's a moment to tap into what's best about us, to connect those who, as the student in Syntagma Square said, "still have dreams," and, together, overcome massive challenges.

As Tim Shriver, who heads the Special Olympics, put it at the lighting of the Olympic torch at the 45,000-seat Kallimarmaro stadium, which hosted the first modern Olympic Games in 1896: "Despite all the difficulties and challenges this country is facing, Greece did not fail us, and the athletes of Special Olympics will not fail Greece." He then called for a "dignity revolution where there's no more us and them" -- a sentiment that clearly has a wider resonance given all that is going on in Greece, as did his declaration the day before on the Parthenon: "There's a stiff wind out here, but we will prevail."

I hope with all my heart that Greece will, too. And not just because that's where I was born and raised, but because the Greeks' struggle -- the struggle to reclaim democracy -- is our struggle, too.

How Libby, Montana, Got Medicare for All

By: Kay Tillow, Wednesday June 15, 2011 8:27 pm from Firedoglake

In 2009 when the Washington beltway was tied up with the health care reform tussle, Montana Democratic Senator Max Baucus, chairman of the all powerful Senate Finance Committee, said everything was on the table–except for single payer.  When doctors, nurses and others rose in his hearing to insist that single payer be included in the debate, Baucus had them arrested.  As more stood up, Baucus could be heard on his open microphone saying, “We need more police.”

Yet when Senator Baucus needed a solution to a catastrophic health disaster in Libby, Montana, and surrounding Lincoln County, he turned to the nation’s single payer healthcare system, Medicare, to solve the problem.

Baucus’ problem was caused by a vermiculite mine that had spread deadly airborne asbestos killing hundreds and sickening thousands in Libby and northwest Montana.  The W. R. Grace Company that owned the mine denied its connection to the massive levels of mesothelioma and asbestosis and dodged responsibility for this environmental and health disaster.  When all law suits and legal avenues failed, Baucus turned to our country’s single payer plan, Medicare.   

The single payer plan that Baucus kept off the table is now very much on the table in Libby.  Unknown to most of the public, Baucus inserted a section into the health reform bill that covers the suffering people of Libby, Montana, not just the former miners but the whole community—all covered by Medicare.

They don’t have to be 65 years old or more.
They don’t have to wait until 2014 for the state exchanges.
No ten year roll out—it’s immediate.
They don’t have to purchase a plan—this is not a buy-in to Medicare—it’s free.
They don’t have to be disabled for two years before they apply.
They don’t have to go without care for three years until Medicaid expands.
They don’t have to meet income tests.
They don’t have to apply for a subsidy.
They don’t have to pay a fine for failure to buy insurance.
They don’t have to hope that the market will make a plan affordable.
They don’t have to hide their pre-existing conditions.
They don’t have to find a job that provides coverage. 

Baucus inserted a clause in the Affordable Care Act to make special arrangements for them in Medicare, and he didn’t wait for any Congressional Budget Office scoring to do it.

Less than two months after the passage of the health reform bill on March 23, 2010, Nancy Berryhill of the Social Security Administration in Denver joined personally in setting up an office in Libby to sign up these newly eligible people.  “This is a new thing,” Berryhill told the Missoulian.  “No other group like this has ever been selected to receive Medicare.”  Berryhill issued a nationwide alert to inform anyone who had lived or stayed in Lincoln County of their eligibility.  She opened a storefront in Libby at the old downtown city hall where she signed up 60 people on the first day.  She plastered the towns of Whitefish and Eureka with pamphlets explaining the program and added three new staffers to the office in Kalispell. 

Berryhill said she did not know how much the care would cost.  That kind of analysis was beyond her directive to sign the people up.  There have been no reports of competition from the private for-profit Medicare Advantage plans.  The sick are not profitable.

No one should begrudge the people of Lincoln County.  The mine wastes were used as soil additives, home insulation, and even spread on the running tracks at local schools.  Miners brought the carcinogens home on their clothes.  The W. R. Grace Company dumped much of the clean up costs onto the federal government.  A June 17, 2009, order by the Environmental Protection Agency, the first of its kind, declared Lincoln County a public health disaster.  The Libby Medicare provision in the health reform law is based on the area covered by that EPA order.    

Baucus gave his reasons to the New York Times for its only story on this unique benefit:  “The People of Libby have been poisoned and have been dying for a decade.  New residents continue to get sick all the time.  Public health tragedies like this could happen in any town in America.  We need this type of mechanism to help people when they need it most.”

Health tragedies are happening in every town.  Over 51 million have no insurance.  Over 45,000 uninsured people die needlessly each year.  Employers are cutting coverage and dropping plans.  States in economic crisis are slashing both Medicaid and their employees’ plans.  Nothing in last year’s reform law will mitigate the skyrocketing costs.  Most insurance is threadbare and doesn’t cover.  More than 50% of us now go without necessary care.  As Baucus said of Medicare, “We need this mechanism to help people when they need it most.”  We all need it now.

Bill Clinton recently stated that the U. S. could give coverage to all for one trillion dollars a year less than we now pay if we adopted the system of any other advanced nation.  (Unfortunately, he did not say this when it would have mattered most during the 1993 and 2009 health care reform debates.)

Other industrialized countries have found that to cover everyone for less they must remove the profit-making insurance companies.  Congressman John Conyers has reintroduced HR 676, the Expanded and Improved Medicare for All Act, which does exactly that.  There are 60 cosponsors.  It would cover all medically necessary care for everyone including dental and drugs by cutting out the 30% waste and profits caused by the private insurers.

So as the Ryan Republicans try to destroy Medicare and far too many Democrats use the deficit excuse to suggest cuts in its benefits, let us counter with the Libby prescription to clean up the whole mess.  Only a single payer, improved Medicare for All, can save and protect Medicare, rein in the costs, and give us universal coverage.

Medicare will celebrate its 46th birthday on July 30, 2011, and all are invited to join in the festivities.  Medicare was passed in 1965 and implemented within less than a year.  When we pass HR 676, this single payer bill, we can all be enrolled in the twinkling of an eye.

www.unionsforsinglepayer.org

All Unions Committee for Single Payer Health Care–HR 676

 

Darrel Issa Stocked Up on Goldman Sachs Bonds While Blocking Its Investigation

from the OB Rag June 29, 2011 · 1 comment

in: American Empire, Economy, San Diego

The $2.4 Billion Goldman Sachs headquarters in New York City opened in 2009.

By Lucas O’Connor / Issa Exposed / June 29, 2011

Darrell Issa is back in hot water for using his powerful Congressional perch to help his personal investments. A new report out today from Think Progress finds that Issa was busy last year buying up Goldman Sachs High Yield Bonds worth up to $50,000 a pop while pressing strongly to thwart an SEC investigation into potential wrongdoing at Goldman Sachs:

Oversight Committee Chairman Rep. Darrell Issa (R-CA) raised hell last year to stop the federal government from investigating Goldman Sachs regarding allegations that the company defrauded investors. In April 2010, shortly after the Securities and Exchange Commission (SEC) announced a civil suit against Goldman Sachs, Issa sent a letter to SEC Chairwoman Mary Schapiro demanding to know if there was “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats over the timing of the lawsuit.

Issa’s investigation of the SEC’s investigation into Goldman Sachs stole the headlines and reinforced Goldman Sach’s claim that they had done nothing wrong. Explaining his defense of Goldman Sachs, Issa said he was representing the views of ordinary Americans who are worried about the “growth of government and the growth of  government wanting to become more complex, with more agencies and more control over our lives.”

This sheds additional light on Issa’s engagement in financial issues since taking over the Oversight Committee earlier this year, specifically reinforcing his strong resistance to any investigation or hearing that might reflect poorly on private financial institutions .

Issa has continued to bring heat on the SEC since taking over the Oversight Committee, targeting the Commission with one of the first subpoenas issued . The focus of his concern? Potential conflict of interest at the SEC arising from personal investments related to ongoing investigations. Of course.

Last month, subcommittee chair Patrick McHenry — bankrolled almost exclusively by the private financial industry — grilled Professor Elizabeth Warren for hours over the soon-to-launch Consumer Financial Protection Bureau, ending with McHenry accusing Professor Warren of perjury. Issa has strongly backed McHenry’s behavior, and Warren will be back to testify again on July 14th.

Issa has also targeted the bi-partisan Federal Crisis Inquiry Commission despite a miniscule budget after it assigned some blame for the financial meltdown to Wall Street.

Despite representing one of the districts hardest hit by the foreclosure crisis, Issa has consistently refused to pursue private financial institutions in his investigations into ongoing economic turmoil, and Issa had made increasingly outlandish excuses as he has refused four separate requests from ranking Democrat Elijah Cummings to issue subpoenas to major mortgage banks implicated in fraudulent foreclosure practices.

Since Issa has previously shown no compunction about personally profiting from what he does as a member of Congress, and we know that Issa prefers to stack his hearings with personal friends and campaign contributors , today’s revelations go straight to the heart of Issa’s credibility in all of these investigations and non-investigations. How can Issa conduct any investigations or hearings without an assumption that he’s seeking personal benefit before the country’s benefit?

Bridge Comes to San Francisco With a Made-in-China Label

by David Barboza, from the New York Times, June 25, 2011

 

SHANGHAI — Talk about outsourcing.

At a sprawling manufacturing complex here, hundreds of Chinese laborers are now completing work on the San Francisco-Oakland Bay Bridge.

Next month, the last four of more than two dozen giant steel modules — each with a roadbed segment about half the size of a football field — will be loaded onto a huge ship and transported 6,500 miles to Oakland. There, they will be assembled to fit into the eastern span of the new Bay Bridge.

The project is part of China’s continual move up the global economic value chain — from cheap toys to Apple iPads to commercial jetliners — as it aims to become the world’s civil engineer.

The assembly work in California, and the pouring of the concrete road surface, will be done by Americans. But construction of the bridge decks and the materials that went into them are a Made in China affair. California officials say the state saved hundreds of millions of dollars by turning to China.

“They’ve produced a pretty impressive bridge for us,” Tony Anziano, a program manager at the California Department of Transportation, said a few weeks ago. He was touring the 1.2-square-mile manufacturing site that the Chinese company created to do the bridge work. “Four years ago, there were just steel plates here and lots of orange groves.”

On the reputation of showcase projects like Beijing’s Olympic-size airport terminal and the mammoth hydroelectric Three Gorges Dam, Chinese companies have been hired to build copper mines in the Congo, high-speed rail lines in Brazil and huge apartment complexes in Saudi Arabia.

In New York City alone, Chinese companies have won contracts to help renovate the subway system, refurbish the Alexander Hamilton Bridge over the Harlem River and build a new Metro-North train platform near Yankee Stadium. As with the Bay Bridge, American union labor would carry out most of the work done on United States soil.

American steelworker unions have disparaged the Bay Bridge contract by accusing the state of California of sending good jobs overseas and settling for what they deride as poor-quality Chinese steel. Industry groups in the United States and other countries have raised questions about the safety and quality of Chinese workmanship on such projects. Indeed, China has had quality control problems ranging from tainted milk to poorly built schools.

But executives and officials who have awarded the various Chinese contracts say their audits have convinced them of the projects’ engineering integrity. And they note that with the full financial force of the Chinese government behind its infrastructure companies, the monumental scale of the work, and the prices bid, are hard for private industry elsewhere to beat.

The new Bay Bridge, expected to open to traffic in 2013, will replace a structure that has never been quite the same since the 1989 Bay Area earthquake. At $7.2 billion, it will be one of the most expensive structures ever built. But California officials estimate that they will save at least $400 million by having so much of the work done in China. (California issued bonds to finance the project, and will look to recoup the cost through tolls.)

California authorities say they had little choice but to rebuild major sections of the bridge, despite repairs made after the earthquake caused a section of the eastern span to collapse onto the lower deck. Seismic safety testing persuaded the state that much of the bridge needed to be overhauled and made more quake-resistant.

Eventually, the California Department of Transportation decided to revamp the western span of the bridge (which connects San Francisco to Yerba Buena Island) and replace the 2.2-mile eastern span (which links Yerba Buena to Oakland).

On the eastern span, officials decided to build a suspension bridge with a complex design. The span will have a single, 525-foot tower, anchored to bedrock and supported by a single, enormous steel-wire cable that threads through the suspension bridge.

“We wanted something strong and secure, but we also wanted something iconic,” said Bart Ney, a transportation department spokesman.

A joint venture between two American companies, American Bridge and Fluor Enterprises, won the prime contract for the project in early 2006. Their bid specified getting much of the fabricated steel from overseas, to save money.

California decided not to apply for federal funding for the project because the “Buy America” provisos would probably have required purchasing more expensive steel and fabrication from United States manufacturers.

China, the world’s biggest steel maker, was the front-runner, particularly because it has dominated bridge building for the last decade. Several years ago, Shanghai opened a 20-mile sea bridge; the country is now planning a much longer one near Hong Kong.

The selection of the state-owned Shanghai Zhenhua Heavy Industries Company was a surprise, though, because the company made port cranes and had no bridge building experience.

But California officials and executives at American Bridge said Zhenhua’s advantages included its huge steel fabrication facilities, its large low-cost work force and its solid finances. (The company even had its own port and ships.)

“I don’t think the U.S. fabrication industry could put a project like this together,” Brian A. Petersen, project director for the American Bridge/Fluor Enterprises joint venture, said in a telephone interview. “Most U.S. companies don’t have these types of warehouses, equipment or the cash flow. The Chinese load the ships, and it’s their ships that deliver to our piers.”

Despite the American union complaints, former California Gov. Arnold Schwarzenegger, a Republican, strongly backed the project and even visited Zhenhua’s plant last September, praising “the workers that are building our Bay Bridge.”

Zhenhua put 3,000 employees to work on the project: steel-cutters, welders, polishers and engineers. The company built the main bridge tower, which was shipped in mid-2009, and a total of 28 bridge decks — the massive triangular steel structures that will serve as the roadway platform.

Pan Zhongwang, a 55-year-old steel polisher, is a typical Zhenhua worker. He arrives at 7 a.m. and leaves at 11 p.m., often working seven days a week. He lives in a company dorm and earns about $12 a day.

“It used to be $9 a day, now it’s $12,” he said Wednesday morning, while polishing one of the decks for the new Bay Bridge. “Everything is getting more expensive. They should raise our pay.”

To ensure the bridge meets safety standards, 250 employees and consultants working for the state of California and American Bridge/Fluor also took up residence in Shanghai.

Asked about reports that some American labor groups had blocked bridge shipments from arriving in Oakland, Mr. Anziano dismissed those as confused.

“That was not about China,” he said. “It was a disagreement between unions about which had jurisdiction and who had the right to unload a shipment. That was resolved.”

The US Does Not Need Workers; It Needs Consumers

by John Lawrence

Why is unemployment so high? Simply put it's because corporations and businesses can produce a surfeit of consumer goods without the need for additional human labor. Since 125,000 new faces enter the work force every month, there should be new jobs created for these people if they are to make a living since most people, but not all, make their living through work. Some, however, the rentier class, make their living from stocks, rent, dividends and interest, but not very many. But the American and even the world - since we're in a global economy - production machine doesn't need additional workers; it needs more consumers. Everything can be produced with a diminishing number of workers. Why? Consider automation, robotization, computerization. In short today machines do most of the work. You only have to watch one of those shows on the Science Channel to appreciate this: "How Stuff is Made." You see that most industrial processes have been completely automated.

Back in the old days production was very labor intensive. Stuff was made by hand. Machines were very primitive or non-existent depending how far you go back. The land was tilled and crops planted by hand whereas today huge tractors and automated farm machinery mean that one man can do the work that was done by hundreds a hundred years ago. What little labor is needed in today's world can easily be outsourced to wherever labor is cheapest. We have gone from an economy which was very labor intensive, one that required a lot of hands for the production of goods, to one that requires very little labor to keep the machines and robots humming. And the process of mechanizing and automating production processes continues. Robots are getting ever smarter.

So where does that leave the average person who is trying to make a living? Not in a very good position with the current economic model. It essentially leaves him or her in the position of a serf begging for a job and competing with thousands of others for work. The serfs were even better off because at least their labor was needed. Today's industrial reserve army is not really needed by the capitalists and corporatists who control the economy. That means two things: 1) the value of labor is depreciated because so much of it is available and unneeded and 2) there is a growing percentage of the population that must either be sustained by some form of welfare or unemployment compensation or cast to the wolves to beg, borrow and steal.

What is needed is a new economic paradigm which recognizes that very little labor is needed and machines can do most of the work. What would that new economic model look like? There would need to be a much larger leisure class than now exists. The wealthy are very few in number as a percentage of the population as a whole. They don't have to work because they have a steady stream of income which represents a return on their assets. Ownership of real estate produces a return in the form of rent. Ownership of stock produces a return in the form of dividends. Interest income is at an all time low because interest rates are so low, but when they go up again, people will be able to make a living if they have enough money in money market, CD and savings accounts. Unfortunately the distribution of wealth is way out of whack. Those in a position of being able to make a living off of so-called unearned income are very few. Those in the position that their only recourse is to make a living from their labor are the vast majority. What is needed is to turn this situation around so that the vast majority can make a living off of return on assets and only a small minority, whose labor is actually necessary for the functioning of society, will be necessary to make money from work. Or the work could be spread around so that everyone might work a few hours a week and make their living mainly on the return on assets or acquired wealth and a small portion of their living off their labor.

This is effectively what advanced societies (not including the US) have done. A large portion of the wealth of the society is held publicly. This does not preclude the private acquisition of wealth, but insures that the distribution of wealth is not as skewed as it is in the US. This makes it possible for the less fortunate, the less able and the unemployed to make a living as a return on public wealth. The fortunate do not need public assistance, but the unfortunate do. Public wealth can provide for free health care, free education and free unemployment compensation among other things. By taxing the rich, money is redistributed to the poor so that the processes of production and consumption can continue. Or public wealth in the form of natural resources can be sold and the profits divided evenly among the people. Many countries use their oil assets as a form of public wealth. Otherwise, all the money ends up in the hands of the wealthy and production stops because the vast majority of people have no money to consume. When money is redistributed or recycled from rich to poor, the production and consumption processes can hum merrily along. So taking money from the rich in the form of taxation and redistributing it to the poor is very important for the healthy functioning of society especially in advanced societies where most of the work is done by robots and human labor is increasingly unnecessary.

So all this banter about the rich being job creators is a bunch of hooey. The rich are not job creators; they are robot acquirerers and job destroyers. They make capital investments of a nonhuman variety because they are more efficient in the production process than are humans. For one thing machines can whiz and hum 24 hours a day. Humans need their rest. Safety standards for machines are more lax than they are for humans. Maintenance is simpler. Machines don't get sick or disgruntled. All in all if a capitalist can replace a human with a machine, he will do it. Capital investment in machines is more desirable than an investment in human capital.

So what does that say about the value of education? Essentially a college education is of diminishing value. Sure some will chase the fantasy of more and more education in order to better compete for fewer and fewer jobs. In the long run the student loan debt required to obtain a credentialization in some field will not be worth it. Since more and more people will be left to their own devices instead of hired, the sensible thing is to prepare for a life of self-employment. Instead of preparing to participate in the global economy with its attendant risks of outsourcing and downsizing, prepare to participate in the local economy in a job from which you cannot be fired and which cannot be outsourced. A college education prepares one mainly to be a servant of a corporation. It shows that one was docile and compliant enough to follow years and years of instruction, sit in classrooms and take tests successfully. It shows the employer that a potential hiree has the requisite qualities of docility and compliability to make a good employee, one who won't make waves or criticize the corporation, one who will adopt the ethos and become enculturated in corporate values, one who, in other words, will sell his soul to the corporation.

Another way to fight back against the job destroyers (not creators) is to form cooperative work enterprises such as the Mondragon corporation which is wholly employee owned. The employee, in addition to acquiring a paycheck, acquires a share of the profits as well. So the worker becomes an owner and makes part of his living from a return on assets just like the wealthy do. Wealth, therefore, is more widely distributed and can be further distributed by reducing the work week, hiring more employees and distributing wealth even more widely.

In an age in which there is a diminishing need for human labor and most work in the production process is done increasingly by machines, the rational thing to do is to distribute the necessary work more widely (i.e. reduce unemployment), reduce the work week and create a situation where each individual makes a portion of their living off of acquired public wealth. In Norway, for instance, the old age pension system is entirely funded by profits from a publicly owned asset: oil. These profits then are invested conservatively so they will be available to future generations.

 

A Stalled Economy and a Presidency Adrift

By Michael Gerson, Published: June 27, Washington Post

If there is a single moment that symbolizes President Obama’s dramatically altered reelection prospects, it was his visit to a Jeep plant in Toledo on June 3. Obama’s remarks that day were familiar. America had faced the worst recession “in our lifetimes.” His opponents had wanted to do “nothing.” The president, in contrast, had acted. As a result, “American manufacturing and American industry is back.” While there are “always going to be bumps on the road to recovery,” the future is bright and “nobody can stop us.” Employees chanted, “Yes, we can!” wearing T-shirts that read, “President Obama: Thank you” and “Obama is changing history.”

The event coincided with the release of economic data showing anemic job creation and unemployment rising above 9 percent — adding to existing concerns about high fuel costs and collapsing housing values. Outside that plant in Ohio, the cheering for Obama had been fading for some time. It was a victory lap taken before a largely silent stadium.

Before Toledo, Obama’s main task was to take credit for a slow recovery. After Toledo, his main task is to explain and confront a stalled economy. The adjustment has not been easy.

A slow recovery requires a message of patience. A stalled economy demands an impression of action. So Obama’s main political problem comes down to this: He has exhausted many of the obvious options for action. A major stimulus package will not be repeated — and some previously passed spending will expire at the end of the year. The Federal Reserve is reluctant to pump more money into the economy. The chairman of the Fed, Ben Bernanke, warns that some causes of the economic slowdown — particularly a dismal housing market — are likely to continue into next year. So what is Obama’s economic strategy? To wait and hope? And how long will Democrats find such an approach sufficient?

The president’s problem is further compounded by a consuming debate in Washington that is largely irrelevant to his political needs. A major program of spending cuts and/or tax increases is not the normal response to a flat-lining economy. Whatever the long- and medium-term benefits of serious deficit reduction, its immediate economic influence is likely to be marginal.

This is not to say the deficit debate is inconsequential. On the current spending path, federal debt will exceed the size of the entire American economy by 2021. Democrats generally believe that the deficit should be confronted by increasing the percentage of the economy taken in taxes. Republicans generally believe that the deficit should be confronted by reducing the percentage of the economy devoted to government spending. In the abstract, the Republican approach is more popular. But it requires cuts in entitlements, which aren’t popular.

This disagreement has been bumped up to the presidential level. Obama will have a large influence on its outcome. But the argument itself has little to do with his immediate political interest in job creation. It is not a matter of taking the right or wrong side; for Obama, it is simply the wrong debate.

The president seems to recognize his predicament. “Of course,” he said recently, “there’s been a real debate about where to invest and where to cut, and I’m committed to working with members of both parties to cut deficits and debt. But we can’t simply cut our way to prosperity.”

This argument is also a kind of admission. It indicates how thoroughly Republicans are dominating the political discussion. There is little attention in Washington to anything other than cutting deficits and debt. Obama invited some of this attention by his own spending habits. But this focus has little to do with his urgent need for economic growth. Heading into a presidential election season, Obama is not determining the ground on which the election will be fought.

The next few weeks will bring some must-watch reality television. Can Obama and House Speaker John Boehner work a debt-limit deal involving spending cuts and caps while clearing out some tax preferences and exclusions? Will Boehner be able to sell such an agreement to suspicious House conservatives? Will the speaker need to turn to House Democrats to get the votes he needs? Will Majority Leader Eric Cantor further distance himself from Boehner and take advantage of conservative discontent?

Meanwhile, the Obama administration drifts on a sea of economic events, heading toward a lee shore.

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The Old Superstition

by Paul Krugman

from the New York Times, June 28, 2011, 7:05 am

I picked up a copy of Lionel Robbins’s 1934 book The Great Depression in a used book shop in Norwich. It’s quite revealing: judicious in tone, full of tables and facts, clearly meant to be seen as the work of a wise observer – indeed, a Very Serious Person.

And utterly, utterly wrongheaded

“The first essential of any recovery from the position in which the world now finds itself is a return of business confidence,” declares Robbins. “But how is confidence to be restored?” He comes out against expansionary monetary policy, even to reverse the deflation of 1929-33 – he doesn’t really have any logical explanation, but having decided that the problem is “confidence”, he declares that monetary expansion would create “uncertainty” and therefore hurt confidence. He condemns exchange rate flexibility, again because it creates uncertainty and undermines confidence.

And after surveying the wreckage all around him, he declares that the cause of the depression was excessive government intervention, and the remedy, the thing needed to restore that all-essential confidence was … drum roll .. a return to the gold standard.

You can sort of see how this kind of policy analysis based on superstition might have seemed plausible in 1934, although even pre-General Theory Keynes could have explained just how wrong Robbins was (and did). But one would have hoped that we were past this sort of thing today.

The point, of course, is that we aren’t. The new BIS report is very much in the same vein as Robbins 1934, with much less excuse. Robbins suffered from the lack of a framework to make sense of events; the BIS, like so many economists, faced with exactly the economic syndrome Keynes analyzed, and for that matter even Milton Friedman would have seen as demanding strong action, has chosen to ignore that framework and play monetary Calvinball instead.

I was originally going to end this post by saying something about stupidity, but that’s not right: the people at the BIS aren’t stupid. What’s going on here is something different and worse: we’re seeing the desire for conventional respectability outweighing the lessons of history; we’re seeing vague prejudice (prejudice that just so happens to serve the interests of rentiers) trumping analysis.

History will not forgive these people.

Sticker Shock: What Extreme Weather Costs the US

by Tara Thean

from Time magazine, June 27, 2011

 
It's not hard to imagine the damage weird weather inflicts on our planet. Hurricane Katrina, for example,  obliterated coastal communities, wiped out businesses and left hundreds of dead bodies in its wake. Quantifying the dollar cost of such a one-off (we hope) event is pretty easy too: Katrina left us with a bill of $81 billion, according to the National Hurricane Center. But what about the year-in, year-out price tag of our increasingly volatile weather? It's a whole lot harder to calculate the cost of a chronic condition like that — or at least it was. Now, a study by the National Center for Atmospheric Research (NCAR) estimates that the bottom line cost of all the meteorological craziness is a staggering $485 billion per year in the U.S. alone, up to 3.4 percent of our country's GDP.

"It's clear that our economy isn't weatherproof," Jeffrey Lazo, the study's lead author, said in a statement. "Even routine changes in the weather can add up to substantial impacts on the U.S. economy."

The fact that it took until now for someone to try to come up with a hard figure like this is a measure of just how daunting the number-crunching can be. After all, when it comes to the weather yo-yo, a debit to one industry can be a credit to another. Take what happens in a snowstorm: air travel is disrupted and heating costs skyrocket, but ski resorts hit the jackpot. Or take a dry spell: crop supplies dwindle, but construction projects are able to stay on schedule.

Other industries are affected in myriad other ways. If you work in mining, you absolutely hate weird weather events, which eat up 14% of the mining economy each year, probably through several avenues: price fluctuations as demand for oil, gas, and coal changes in tandem with the weather; threats to the security of mine water supply; and damage to mines and associated transport infrastructure. Agriculture cuts a close second at 12%; no surprise, crops deal with torrential rain and unreliable temperatures even worse than we do. The manufacturing, finance, insurance, retail and utilities sectors are also particularly sensitive: people don't buy as many bikinis and bikes in rainy summers, and weather-induced power outages are a huge blow to electric utility operations. But be thankful if you are in wholesale trade, retail trade, or services. These are barely touched by the weather, partly because manufacturers cannot function without wholesalers no matter what the climate; and America still needs its health care and financial advice even when it's raining.

Lazo also found that different states have different vulnerabilities to wild weather. New York was the most sensitive, with weather having a 13.5% impact on its gross state product, and Tennessee fared best with only a 2.5% impact. While the researchers did not provide a concrete explanation for all of the state-to-state differences, they noted that states with a larger gross state product, or larger economic outputs, are more weather-sensitive in absolute terms. (A 10% loss of economic activity in a big-revenue state is simply a lot more money than the same 10% in a smaller state.) Differences may also arise from the fact that coastal regions are hit hardest by tropical storms, while other areas are more susceptible to drought and severe winters. But the study noted that no one part of the country seemed radically more weather sensitive than any other part.

No matter the regional differences, $485 billion is a lot of money, and it remains to be seen how effectively Americans will respond to the threat. If a recent survey by the HNTB Corporation, an infractructure contracting group, is any indication, we have a lot of work to do . Over two thirds of Americans don't realize that flooding is the biggest natural threat to their home, for example; fewer than 1 in 10 have prepared their homes for flooding, and 63% refuse to pay more taxes for flood-protective measures in their neighborhoods.

Floods are only one part of the weird weather picture, but HNTB flood management practice leader Rob Vining says the survey's findings are a perfect example of how we do a much better job of reacting to disasters than preparing for them. That may be human nature, but it's a part of our nature we have to learn to fight. If a broken planet isn't enough to mobilize us, a flat-broke country ought to be.

Read more: http://ecocentric.blogs.time.com/2011/06/27/sticker-shock-what-extreme-weather-costs-the-u-s/#ixzz1QZEHNH57

Shock Doctrine: 'Emergency Finance Managers' and the Right-Wing's Power Grab

by Sarah Jaffe, Alternet

Emergency financial managers are being put in place by democratically elected governors throughout the country.

June 26, 2011   The onslaught of radical policies from the wave of Tea Party-supported right-wing state politicians swept in in the 2010 elections has been nearly overwhelming. Nearly every state that saw a Republican takeover of the statehouse or legislature has faced attacks on collective bargaining, immigration, reproductive freedoms, or health care. New power grabs have popped up constantly, and copycat bills have sprung up in their wake as if an official playbook has been passed around the country.

But one of the nastiest moves has been the institution, by Michigan governor Rick Snyder, of an “emergency manager” over several cities in his state, as well as the Detroit public school system. This manager has the unilateral authority to fire officials, close schools, void union contracts, and assume total control over areas declared to be in a financial state of emergency by the state.

And it looks like the idea is spreading.

****
In March, the Michigan legislature passed an update to state law that gave emergency financial managers expanded powers over cities and school districts facing financial distress. The provision drew protests immediately, with thousands converging on the capitol on March 16, the day the law was signed. Unions and community organizations recognized the law as a threat, not just in the cities where emergency financial managers were imposed, but around the state, where unions would be pressured to make concessions in order to keep a financial manager from being imposed on them. Since financial managers have the power to wipe away a union contract with a pen stroke, the unions are left with an impossible choice—concede great chunks of hard-won benefits and wages, or risk losing it all.

Ed Brayton at the Michigan Messenger wrote:

“While opponents of the law were organizing their efforts, the Emergency Managers already in place wasted no time in putting their newly gained powers to use. Robert Bobb, who was at the time the Emergency Manager for the Detroit Public Schools, announced on April 15 that he would use his authority to void union contracts and his office immediately sent layoff notices to all 5,466 members of the teachers union. The very same day Joseph Harris, the emergency manager in charge of the city of Benton Harbor, issued an order stripping all authority from elected boards in that city, including the city council. That order would provoke massive opposition and bring the attention of the national media to the realities of the new law.”

Benton Harbor is 92 percent African American and 42 percent of its population lives below the poverty line. Helping those people doesn't seem to be in the job description of the financial manager, who has cut off support for an innovative local gardening program that helped the city's food-insecure residents sustain themselves. Apparently food isn't one of the “core services” that Snyder's spokeswoman told the Lansing State Journal were being preserved by the emergency managers.

As for the schools, the claim is that “failing” schools will be fixed by allowing for-profit charter companies to take them over. But that claim doesn't hold up under scrutiny. Recently, the Rachel Maddow show highlighted one Detroit school that was far from failing. Young mothers were not only graduating, but graduating with honors and going on to college from the Catherine Ferguson Academy, yet the emergency manager targeted the school for closure anyway. News that it would remain open as a charter school was bittersweet at best, since the for-profit company taking over the school specializes in "strict discipline academies" for students with legal problems. Teachers have already been informed that their wages will be cut.

Innovative public education programs like the Ferguson Academy aren't profitable, but they are an example of the good that public education can do. And the local food program, which promoted community self-sufficiency and entrepreneurship, was far less costly than tax breaks for big business. That these programs help people do exactly what conservatives want them to do—pull themselves up by their bootstraps and make a better life for themselves and their families—is further evidence that the ideals of "success” and “efficiency” touted by the new radical right are actually just cover for their real agenda: consolidating their own power.

A lawsuit filed Wednesday, June 22 challenges the emergency manager law. Again, from the Michigan Messenger:

“This is an infringement on basic democracy,” said plaintiffs attorney John Philo of the Sugar Law Center for Economic and Social Justice. “It really is an experiment in a new form of government — one person rule.”

The complaint alleges that the law, “violates the rights of local voters by attempting to delegate law-making power and the power to adopt local acts to unelected emergency mangers, by suspending the rights of local electors to establish charters and to elect local officials, and by imposing substantial new costs and expenses upon local municipalities without providing new revenue.”

The law is so extreme, the plaintiffs say, that it “establishes a new form of local government, previously unknown within the United States or the State of Michigan, where the people within local municipalities may be governed by an unelected official who establishes local law by decree.”

Even if the people did vote on an official, it should be noted, there's a difference between voting for a mayor, say, and an official with near-unlimited powers. Even Snyder's office realized that it would be unseemly to make Detroit Mayor Steve Bing the emergency manager of his city or even its school system. That might be too much power for one individual.

One Michigan blogger grimly joked:

“I see in Michigan’s future: EFMs declaring war on other EFMs. And the citizenry of one city being told to fight the citizenry of other cities. to protect the turf and honor of our noble EFMs.”

****
Pennsylvania has been a quieter front in the war on working people, overshadowed by Wisconsin, Ohio, Michigan, and even its neighbor New Jersey. But it has its own bill working its way through the legislature that would update existing legislation and consolidate state control over a city, in this case the capital city of Harrisburg.

Act 47, the Financially Distressed Municipalities Act, has been on the books for a while in the state, and was developed to help Pennsylvania's cities recover from financial stress. But the plan put forth under the act for Harrisburg is quite different from earlier plans for other cities in the state (including Pittsburgh, Scranton, Reading and Johnstown).

Michael Wood, of the Pennsylvania Budget and Policy Center, explained that the plan for Harrisburg would dictate the sale of particular city assets and eliminate much of the separation of powers between elected leadership, requiring staff to be shared between city council, mayor, controller and treasurer. This is a change from the usual recommendations, which Wood said include taxing commuters as well as making changes to union contracts and city services.

But on top of the existing powers under Act 47, a group of state senators have put forward bill 1151, which would allow the state to appoint a three-person board to run Harrisburg if the plan isn't enacted, stripping power from the elected city council. The bill also gives the state the power to renegotiate union contracts for the city's public employees, including police and firefighters. Wood wrote in an email:

“A 'doomsday' proposal like the one put forth by Senator Piccola, where the state takes over management of the city if the Act 47 plan is not adopted, has not been considered before -- and reflects a distinct departure from previous state policy regarding helping out distressed communities. The plan seems likely to be restricted to only the City of Harrisburg, due to some of the specifics in the bill."

Piccola is the senator who represents Harrisburg, and, Wood noted, is a main supporter of school voucher programs. Pennsylvania's public education is already suffering budget cuts of roughly $1 billion—around $8 million in Harrisburg alone.

Wood, who grew up not far from Benton Harbor, Michigan, noted that the push for emergency control over Harrisburg looks much like what's happening there, particularly in demographics. “The cuts of state aid for schools is felt most directly by the state's poor urban and some rural schools,” he said, “State aid is based on district wealth (or lack of wealth), so the poorest schools get the most state aid. When the cuts are handed down, these same districts take the biggest share.”

As in Michigan, it's notable as well that the budget cuts handed down by the governor actually increase the likelihood that Harrisburg, and other cities around the state, will require further financial help, thus pushing them further into dependence on the state government and whatever requirements it—and the conservatives at the helm—dish out.

***** 
A story about right-wing power grabs just wouldn't be complete without an appearance by Wisconsin governor Scott Walker. Walker's become the poster boy for conservative overreach, and rumors have been swirling that he's planning his own emergency financial manager plan.

Walker denied it, but Rick Ungar at Forbes wrote in April that Wisconsin progressive activists were reporting a plan to be introduced in the legislature that would give the governor the ability to appoint a financial manager if a municipality failed a financial stress test. The bill, they said, would be very similar to Snyder's in Michigan.

Ungar wrote:

“Walker’s plans give further credence to the notion that the efforts of the GOP governors with Republican majorities in their state legislative bodies are part of a coordinated plan to enforce a right-wing agenda designed to not only destroy state, county and municipal employee unions, but to take control of local governments by replacing elected officials with appointees, both corporate and individual, of the state’s highest executive officer.”

*****
Naomi Klein, in her book The Shock Doctrine, explained the way radical right-wing economists have used the shock created by an emergency, natural disaster, or coup d'etat to impose their preferred policies of privatization, deregulation, and slashing social services on countries around the world. Those economists, of course, came from right here in the USA—starting with the University of Chicago's Milton Friedman.

She opens the book with New Orleans after Hurricane Katrina, where a natural disaster somehow became an excuse to privatize the schools and bulldoze public housing.

The hurricane that's hit Michigan, Wisconsin, Pennsylvania and Florida is the same hurricane that's hit the world—financial crisis, ongoing recession, debt and a lack of tax revenue. The response, of course, has differed in different places, but Klein's point is that the Friedmanites were ideologues in search of a crisis they could exploit to put in their preferred policies—and if that required working with dictators, so be it.

We shouldn't be surprised, then, to see those policies being imposed here at home in the name of financial emergency. Klein notes that it's not always war or natural disaster that creates crisis:

"...if an economic crisis hits and is severe enough--a currency meltdown, a market crash, a major recession--it blows everything else out of the water, and leaders are liberated to do whatever is necessary (or said to be necessary) in the name of responding to a national emergency.”
Klein made the link between that radical economic policy and dictatorships, usually violent ones, where a single person or small group used power consolidated by that same shock technique to control the population. Obviously, the same type of violence is not being used in the states that are considering emergency manager legislation, but there's no question that the “shock” of the ongoing recession is being used to push through policies that were quite different from the campaign-trail promises of the Republicans in power.

While the emergency financial managers are being put in place by democratically elected governors with the blessing of democratically elected legislatures, they represent a consolidation of power that may be unprecedented in this country and is certainly undemocratic.

Local groups are organizing against these measures on the ground, particularly in Michigan, but the real problem is figuring out just where the next copycat bill will arise.

 

“America Has the Wealth to End the Despair”

Published on Sunday, June 26, 2011 by YES! Magazine

Nurses come face-to-face with the fallout of the financial crisis every day. Now they've joined the worldwide movement for a tax that would curb financial speculation—and help fill public needs.

by Sarah Anderson and Marlee Blasenheim

Sandy Falwell, who has worked in a neonatal intensive care unit for some 20 years, could tell plenty of stories about the impact of the Great Recession on the lives of her patients. One of the most painful: After a woman gave birth to a 2-pound baby, she told Falwell that she blamed herself for her baby’s premature birth. During her pregnancy she had been unable to afford insulin treatments for her diabetes—in part because she was taking care of her elderly parents.  Photo by Jason

Falwell is a member of National Nurses United, a union whose members come face-to-face with the fallout of the financial crisis every day. On Tuesday, they rallied on Wall Street with the message that “America has the wealth to end the despair and deprivation.”

Rose Ann DeMoro, the union’s executive director, explained:  “There’s a financial transaction fee that we’re going to have Wall Street pay—they’ve paid it here in the past—it’s very American. These yo-yos who buy and sell and buy and sell our country should have to pay a tax on that.”

Such taxes place a small fee on each trade of stocks, derivatives, foreign exchange, and other financial instruments, with the goal of raising massive revenues for public needs while also discouraging reckless speculation.

The United States had a transactions tax from 1914 to 1966, which levied a 0.20 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help financial recovery and job creation during the Great Depression.

The nurses’ rally was part of a global day of action during which people in more than 35 countries demanded a tax on financial transactions. The actions were timed for the eve of a meeting of leaders of European Union nations, where the debate over such taxes is much further along than in the United States. There are high hopes that Europe will implement them in the near future, which would give a big boost to U.S. advocates.

Here are a few highlights from other countries, where many of the campaigns have taken on a “Robin Hood” theme:

• In Berlin, Robin Hoods rolled giant Euro coins down the street to Chancellor Angela Merkel’s residence, where someone who looked an awful lot like her (except with a head four times as large as a normal human) received the money as she prepared to depart for the European Council meeting.
• In Lebanon, the League of Independent Activists opened opening a banner reading “Big Day for a Tiny Tax” in English and Arabic on the Central Bank before delivering a statement to government officials.
• In Brussels, activists met with the Belgian Prime Minister Yves Leterme, who assured them that his government will support a Europe-wide transaction tax.
• In Nepal, activists met with their Deputy Prime Minister and Finance Minister and delivered a lobby letter before taking their message to various historical sites in Kathmandu.
• In Norway, a casino/stock exchange installation was set up alongside a “Robin Hood forest” in the center of Oslo. 
• In New Zealand, activists with 350.org and Oxfam did an action at a shopping mall, resulting in this not-to-be-missed short video of a break-dancing Robin Hood.

For more on these actions and continued coverage of the global day of action, click here.

Back on Wall Street, Karen Higgins, a Co-President of National Nurses United told the crowd, “Around the world, we’re calling for a more fair and just economy. The finance tax we’re talking about comes from the trillions of trade of stocks and bonds sold here every day. The revenue is badly needed in our communities.”

The nurses’ union was joined on the street by a long list of other unions and organizations, including the Amalgamated Transit Union, Vocal NY, AFSCME, UNITE HERE Local 100, Community Voices Heard, Transport Workers Union Local 100, United Steam Workers, and PSC-CUNY.

A big theme of the day was that the New York rally was just the beginning of what they're hoping to be a growing movement. Minnesota nurse Jean Ross, clearly angered by the role of the financial industry in creating the current crisis, said, “Wall Street should be happy that we’re just talking about a financial transaction tax. We could be talking about restitution.”

Sarah Anderson and Marlee Blasenheim adapted this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Sarah is director of the Global Economy Project at the Institute for Policy Studies.

How to Drive the Economy Off a Cliff While Insisting You’re Actually Fixing it

by Andy Cohen on June 17, 2011, from the OB Rag

in: American Empire, Economy, Popular

Republicans continue on their propaganda campaign that cutting taxes leads to economic and employment prosperity, in defiance of a mountain of evidence to the contrary.

“Everything is on the table” say Senate Minority Leader Mitch McConnell and House Majority Leader Eric Cantor when referring to the ongoing budget debate as the deadline looms to raise the nation’s debt ceiling.  But we know that’s not at all true.  There is, in fact, one glaring item that as far as Republicans are concerned is most certainly NOT on the table, and we know this because the very same gentlemen who’ve told us that “everything is on the table” have also told us explicitly that, in reality, not everything is on the table.  They’ve told us that the one thing that has been the single biggest contributor to our nation’s debt and deficit crisis over the last 10 years is a complete non-starter (Cantor’s words).

That one thing:  Taxes.  It is the single most divisive issue in American politics today; perhaps even more so than the current Battle Royale over Medicare.  Democrats insist that the wealthiest Americans need to pay their fair share; that the Bush tax cuts of 2001 and 2003 have led us into an economic abyss and that they need to be eliminated (something that by law actually should have happened already).  Republicans insist that we’re being taxed into oblivion, which they claim is directly responsible for our current economic crisis.  Their plan is to further cut taxes—and government regulation, but that’s another issue for another post—and sit back and watch as the economy mystically, magically grows and sprouts millions of new jobs.

A little recap:  During the Clinton administration, taxes went up slightly to what were historically very moderate levels, the top tax rate being 39%.  The economy grew by leaps and bounds, 20 million jobs were created during Clinton’s eight years in office (compared with a paltry 1 million new jobs during Bush’s eight years), he left a budget surplus of $246 billion when he handed the reins to George W. Bush, and according to the CBO and Bush’s own Office of Management and Budget had Clinton’s policies remained in place the national debt would have been paid off by 2009.

A look back at the numbers in January 2001, when Republicans took complete control of the government (both houses of Congress and the White House), finds an unemployment rate of 4.2%, up from 4.0% in January of 2000 (courtesy of the Bureau of Labor Statistics).  Compare that to the 7.8% in January 2009 (when Obama took office) and the current 9.1% figure.  Given that the statistical equivalent of full employment is generally considered to be somewhere between four and five percent unemployment, it becomes clear that the higher tax rate has absolutely nothing to do with high unemployment numbers, since tax rates currently sit at historical lows.

Our economy as a whole was clearly better off in the late 90’s.

Just for a little historical perspective:  Republican wunderkind Ronald Reagan, 1 ½ years into his presidency, presided over the highest unemployment rates since WWII, with unemployment holding steady at well over 10% for 10 months between 1982 and 1983, reaching a high of 10.8%.  This after implementing one of the largest tax cuts in history at the time.

Last week I wrote about what the official Republican budget plan looks to do to Medicare:  In short, they want to kill it altogether.  But their plan isn’t any more credible on tax policy.  It should be common knowledge by now that the basic premise behind Republican economic policy is tax cuts:  When the economy is struggling, you cut taxes.  When the economy is booming, you cut taxes.  When unemployment is high, cut taxes.  Their theory is that tax cuts spur job growth by putting more money in the hands of businesses, which in turn cause businesses to hire more workers.  It’s a nice theory, but complete fantasy.

The Republican “Path to Prosperity” does precisely that:  It cuts taxes to where the top rate sits at 25% (compared to 36% now, which in truth is a 28% effective rate), claiming they can balance the budget by slashing revenues.  And according to the CBO, they actually do manage to balance the budget and run a slight ¼% surplus beginning in 2040.  But to do this, 68% of medical costs are shifted directly to seniors instead of the 75% that is currently covered by Medicare.

In 2001 the United States had a budget surplus.  By 2002 that surplus was gone, and the U.S. began to see the debt and the deficit both skyrocket out of control.  What was the leading cause of the exploding debt and deficit?  Well, every credible analysis says that it was the Bush tax cuts that are the primary culprit.

Study after study after study have shown us that the single largest contributor to our current debt and deficit crisis are the Bush tax cuts of 2001 and 2003.  The Center for Budget Policy and Priority have released more graphs demonstrating this than Sadaharu Oh has base hits, yet Republicans continue to double and triple down on the same disastrous policies.

Republicans like Paul Ryan and Tim Pawlenty, the former Republican governor of Minnesota and current candidate for president, are selling the gullible public a suicide kit.  (See this one of many analyses of Pawlenty’s recently released budget plan, which has been ridiculed and derided across the political spectrum.)  They continue to insist that it was Obama’s policies that have driven the debt and deficit in two years, and not Republican policies.  But this study by the CBPP definitively shows us otherwise.

According to the study, under current policies (which includes maintaining the Bush tax cuts), the U.S. debt will reach $20 trillion by 2019, and the Bush tax cuts and the wars in Iraq and Afghanistan will account for half of that by themselves.  TARP and other recovery measures?  Less than 10%, with TARP and the Fannie and Freddie bailouts disappearing almost entirely from the radar.  It’s the economic recovery efforts, after all, on which Republicans place the entirety of the blame for our current troubles, but that’s simply nothing less than a bald faced lie.

Republicans continue to point to past surges in economic growth as evidence that their policies work.  But as Dave Weigel of Slate (a self-proclaimed libertarian, no less) points out—particularly in the case of the Reagan era—the spikes in economic growth that figures like Ryan and Pawlenty point to came after tax increases, not tax cuts.  Further, it was the periods after tax cuts that saw the least amount of growth, and the biggest jump in the deficit and debt.

In fact, if nothing other than ending the Bush tax cuts happened, projections tell us that the debt would level off completely.

The continued insistence by Republicans that raising taxes cuts economic and employment growth off at the knees has been repeated so often that the more gullible among us accept it as fact with absolutely no accompanying evidence.  We’ve seen that the exact opposite is true, though, or at the very least that tax rates have little to do with employment numbers.  In fact, it can be argued that raising taxes only moderately can spur job growth.  In 1986 Ronald Reagan, signed a tax reform bill that had the effect of raising taxes on the wealthy.  What happened to the unemployment rate?  January 1986 saw unemployment at 6.7% and hovering around 7% for most of the year before steadily declining through 1989 and into 1990, reaching a low of 5.0%.

In other words, Reagan’s tax hikes did not kill jobs, and didn’t stifle job creation.  Bill Clinton raised taxes and presided over unprecedented economic and employment growth.

So here we sit in 2011 with major economic and budget problems, with over 12 million unemployed and a major jobs crisis.  Republicans surged to control of the House of Representatives on a “jobs, jobs, jobs” campaign meme in 2010, yet all we hear about is the debt and the deficit, and how it’s the Democrats and President Obama who are to blame.  We have not seen one single jobs bill come out of Congress.  Not.  One.

With any and all efforts by Democrats to address economic issues being treated with utter contempt by their Republican counterparts, it’s no wonder our economy is slipping backward instead of continuing to improve.  If Republicans continue their intransigence on revenues we will surely see our entire country fall into oblivion—both economically and culturally.  Republican policies have led to a shocking and growing disparity in income levels between the very rich and the withering middle class. A healthy economy is one that is sustained by the purchasing power of its middle class.  At the rate we’re going, and if Republicans have their way, it won’t be long before the middle class disappears completely, and we’re left with two distinct classes of Americans:  The über wealthy, and the working poor who have barely enough to secure the bare essentials.  It’ll be the 1920’s all over again.  Which is exactly what Republicans want:  A return to the “good old days.”

James Hubbell Home Tour, Father's Day 2011

by John Lawrence

James Hubbell Home Tour, Father's Day 2011, Julian, CA from John Lawrence on Vimeo.

 

America, Land of the Free to Go Hungry

Published on Friday, June 24, 2011 by The Guardian/UK

The GOP's Ryan plan caricature of food stamps as a welfare entitlement out of control will tug the safety net from millions

by Eric Augenbraun

As unfortunate as our current age of austerity is claimed to be, legislators at both the federal and state levels seem to relish the opportunity it has provided them to dismantle the last vestiges of the social safety net. If the economic crisis taught us anything, after all, it is that there is too much government regulation on Wall Street, and too many government safeguards for those most in need, right?

With the latest set of proposals, "belt tightening" will have a very literal meaning for millions of Americans as Republicans in Congress have now proposed cutting and radically restructuring the Supplemental Nutrition Assistance Program (Snap) – the program more commonly known as food stamps – despite record numbers of people presently on the rolls. Without question, these cuts and changes would prove devastating for many of those to whom food stamps represent a last line of defence against hunger.

Food stamps were first instituted in 1939 at the tail end of the Great Depression, but were discontinued in 1943. It was more than two decades later that the program was established on a permanent basis with the Food Stamp Act of 1964 – as a part of President Lyndon B Johnson's "Great Society". Since then, it has undergone some changes but remains essentially intact.

And it is a good thing it has.

In March 2011, a record 44.5 million Americans received food stamps, which was an 11.1% increase over the year before. Even more illustrative of the profound impact the economic recession has had on poor and working-class Americans is the fact that this represents a 64% increase over the number of recipients in March 2008.

Faced with this evidence of increased need, on 31 May, the House appropriations committee nevertheless approved the fiscal year 2012 agricultural appropriations bill, which includes $71bn for Snap – $2bn less than President Obama's recommendation. On 16 June, the bill was just barely approved with a 217-203 vote in the House.

Meanwhile, Wisconsin Republican and House budget committee chairman Paul Ryan's "Path to Prosperity" budget proposes deep cuts to Snap, and even more fundamental changes to how it is administered:

"[P]rograms that subsidize food and housing for low-income Americans remain dysfunctional, and their explosive growth is threatening the overall strength of the safety net."

His plan would turn Snap into a block grant program in 2015 (along with Medicare, starting 2013), meaning the funds would be delivered to the individual states with only loose stipulations about how they are to be used. The belief is that this improves flexibility and promotes innovation and creativity in the delivery of federal funds. But coupled with Republicans' intention to slash Snap by 20% over the next ten years – or $127bn, as the Center on Budget and Policy Priorities calculates – Ryan's plan could leave millions in danger of going hungry.

While Ryan has not made clear the specifics of how the cuts would be instituted, Dottie Rosenbaum of the CBPP speculates that they would most likely come in two areas: a change in eligibility requirements and an across-the-board cut in the benefits available. Additionally, she argues, block-granting Snap would render it "unable to respond automatically to increased need resulting from rising poverty and unemployment during an economic downturn" and would also give individual states the option of placing their own restrictions on the program. Finally, Rosenbaum responds to Ryan's claim that Snap has undergone "relentless and unsustainable growth" by pointing out that "[t]he recent growth in the number of people participating in Snap closely tracks the increases in poverty associated with the recent recession."

A fuller appreciation of the potentially disastrous effects of these cuts is gained by examining their possible impact at the local level. "Nobody really wants to see what it will look like if they block-grant Snap, because it's going to be ugly," says Carey Morgan, the executive director of the Greater Philadelphia Coalition Against Hunger. Her organization screens 6,000–7,000 Philadelphia-area households per year for eligibility for food stamps, of which about 70% qualify. Then, they assist families with the application process and provide them with case work services for dealing with what can be a complex bureaucracy.

Morgan, who recognizes the structural roots of poverty and its inherent relationship to hunger, notes that Ryan's plan would hit Philadelphia particularly hard:

"When we see the rates of poverty being 27%, which is what it is in Philadelphia, of course you're going to have high rates of hunger."

Moreover, the costs of cutting food could have attendant effects in other areas. She adds:

"If you can't eat, you're going to get sicker and you're going to be sick more often, and those medical costs will go up. Food is a great preventative tool."

It seems like common sense, but apparently, not to Ryan and his ilk.

One enduring legacy of the Reagan administration has been the extent to which it greased the ideological rails for the continued destruction of the welfare state – long after he had his crack at it by perpetuating lurid fantasies about the purportedly pathological (largely urban and black or hispanic) poor. Who could forget Reagan's most notorious and nefarious tall tale? That of the "welfare queen":

"She has 80 names, 30 addresses, 12 social security cards and is collecting veteran's benefits on four non-existing deceased husbands. And she is collecting social security on her cards. She's got Medicaid, getting food stamps, and she is collecting welfare under each of her names. Her tax-free cash income is over $150,000."

This and similar anecdotes have framed the rightwing discourse about poverty for the past 35 years. If the poor are a fundamentally defective, lazy and criminal underclass, the logic goes, what good can government aid possibly do?

But nothing could be further from the truth, which is obvious if one just talks with some of the people who rely on these benefits. For instance, Tamika Finn is a 34-year-old, recently-unemployed single mother from West Philadelphia. She cares for her mother and son – both of whom are disabled – while she completes an associates degree in information technology. "I'm grateful to have food stamps," she says. But, she maintains, "the goal is always to get off and do something different – do something better." Dispelling the notion that recipients wish to remain on food stamps indefinitely, Morgan points out that "99% of the people we talk to are not proud of getting the benefit and are not looking to scam the system."

The assault on the welfare state has hardly been the work of Republicans alone. Lest we forget, it was Bill Clinton who signed Personal Responsibility and Work Opportunity Reconciliation Act of 1996 into law, keeping his promise to "end welfare as we know it". Among many other things, this act made significant cuts to Snap. Incidentally, it was also Bill Clinton who, in 1999, repealed the Glass-Steagall Act of 1933, which prevented speculation by banks. This move is now believed to have contributed to the current economic crisis.

Indeed, the logic of slashing the social safety net fits cozily with an upwardly redistributive program of tax cuts and deregulation. And, of course, this is the path we have been on for the last 30 years. Morgan sums up bankruptcy of this trend nicely: "Our priorities are completely messed up if we are cutting food, which is a basic right to the most vulnerable populations we have." As the oft-repeated maxim goes, the true test of a society is how it treats its weakest members.

© Guardian News and Media Limited 2011

Eric Augenbraun is a political writer and researcher based in Philadelphia. He also writes about baseball at TheGoodPhight.com

Bernie Sanders Calls Out Republicans on "Shared Sacrifice"

 

Private Prisons Spend Millions On Lobbying To Put More People In Jail

By Andrea Nill Sanchez posted from ThinkProgress Justice on Jun 23, 2011 at 12:13 pm

Yesterday, the Justice Policy Institute (JPI) released a report chronicling the political strategies of private prison companies “working to make money through harsh policies and longer sentences.” The report’s authors note that while the total number of people in prison increased less than 16 percent, the number of people held in private federal and state facilities increased by 120 and 33 percent, correspondingly. Government spending on corrections has soared since 1997 by 72 percent, up to $74 billion in 2007. And the private prison industry has raked in tremendous profits. Last year the two largest private prison companies — Corrections Corporation of America (CCA) and GEO Group — made over $2.9 billion in revenue.

JPI claims the private industry hasn’t merely responded to the nation’s incarceration woes, it has actively sought to create the market conditions (ie. more prisoners) necessary to expand its business.

According to JPI, the private prison industry uses three strategies to influence public policy: lobbying, direct campaign contributions, and networking. The three main companies have contributed $835,514 to federal candidates and over $6 million to state politicians. They have also spent hundreds of thousands of dollars on direct lobbying efforts. CCA has spent over $900,000 on federal lobbying and GEO spent anywhere from $120,000 to $199,992 in Florida alone during a short three-month span this year. Meanwhile, “the relationship between government officials and private prison companies has been part of the fabric of the industry from the start,” notes the report. The cofounder of CCA himself used to be the chairman of the Tennessee Republican Party.

The impact that the private prison industry has had is hard to deny. In Arizona, 30 of the 36 legislators who co-sponsored the state’s controversial immigration law that would undoubtedly put more immigrants behind bars received campaign contributions from private prison lobbyists or companies. Private prison businesses been involved in lobbying efforts related to a bill in Florida that would require privatizing all of the prisons in South Florida and have been heavily involved in appropriations bills on the federal level.

Tracy Velázquez, executive director of JPI recommends that we “take a hard look at what the cost of this influence is, both to taxpayers and to the community as a whole, in terms of the policies being lobbied for and the outcomes for people put in private prisons.”

San Diego Pisses Off Its Chief Benefactor Over Balboa Park Improvements

by John Lawrence

San Diego has missed a chance to catapult Balboa Park from a merely great destination into a top of the line world class destination and pissed off billionaire benefactor Irwin Jacobs whose philanthropy has benefitted UCSD, the San Diego Symphony (to the tune of $100 million), Balboa Park's Museum of Photography and many other San Diego institutions at the same time! After Mayor Jerry Sanders asked Jacobs to come up with a plan to rid Balboa Park of automobiles before the 2015 hundredth anniversary of the park, Jacobs went to work. He put his own time, energy and money into it, hired an architectural firm to draw up plans and came up with something that would not only allow pedestrian access to every museum in the park without crossing traffic but also allowed automobile traffic to continue through the park to an underground, centrally located parking garage. Sanders has mentioned that the city couldn't take care of the park any more and that the new model would be that funding for the park in general would be based on philanthropic contributions. In other words he would henceforth rely on private donations not only for creating a traffic free zone with which he tasked Dr. Jacobs, but he would rely on philanthropists for improvements and maintenance in general.

All well and good until the Jacobs plan started to generate its detractors among them the Save Our Heritage Foundation (SOHO) which complained that a proposed bypass around what amounts to a warehouse with a blank wall would detract from its historical value. Then the sparring and criticism began. SOHO came up with its own plan which would allow traffic through the main plaza of the park just as occurs now but would eliminate a few parking places in the plaza. While the Jacobs plan would cost $20-$30 million, the SOHO plan would only cost around $500,000. However, Jacobs pledged to raise the money from his millionaire buddies and throw in a generous amount himself. Then around June 9, 2011 the San Diego City Council Rules Committee voted not to give Jacobs a "memorandum of understanding" which would have allowed him to proceed with his plans for the park. Jacobs immediately suspended all activities.

The San Diego Union editorialized that this amounted to "a dagger in the heart of Philanthropy":

At just the moment when City Hall is trying to build a new financial model based on philanthropy to assure a sparkling future for San Diego’s priceless gem, Balboa Park, the City Council Rules Committee this week essentially turned its back on $25 million in philanthropy for the park. This cannot be allowed to stand. There is, according to city studies, a backlog of at least $240 million in infrastructure repairs needed at Balboa Park. The city, needless to say, does not have that kind of money. Spurred by Mayor Jerry Sanders and Councilman Todd Gloria, the city created the Balboa Park Conservancy, still in its infancy, to raise private donations to whittle away at the infrastructure backlog. It has also been the dream of urban planners and many park lovers for decades to remake the central Plaza de Panama, now a parking lot, and the roadway leading past the Spreckels Organ Pavilion, which now carries up to 7,000 vehicles a day, into a grand plaza and esplanade for people. Mayor Jerry Sanders asked Irwin Jacobs, the Qualcomm co-founder and philanthropist, for help in ridding the plaza and esplanade of traffic in time for the 2015 centennial of the historic Panama-California Exposition, a celebration expected to draw hundreds of thousands of additional visitors to the park. That’s no easy task, given the lack of time and money, and the many park stakeholders – the museums, the zoo, other institutions, historic preservationists, surrounding neighbors and other groups – who all want and deserve a voice in what happens in the park. Jacobs took the ball and ran with it, as he has so many times before on behalf of San Diego, spending hundreds of thousands of his own dollars on engineering and design plans. What his team came up with was a controversial plan to build a bypass road off the Cabrillo Bridge that would divert vehicles around the plaza and esplanade, connecting to a largely underground parking garage behind the Organ Pavilion topped by grassy fields. Jacobs said it would cost $40 million, to be financed with garage parking fees and $25 million in private donations he pledged to raise. Before going further, he wanted conceptual approval of the plan from the City Council. But the Rules Committee balked, refusing to give it a favorable recommendation, prompting Jacobs to balk, suspending his efforts. It is not our purpose today to argue on behalf of the specifics of the Jacobs plan. It is our purpose to argue that there is too much at stake for Balboa Park and, indeed, the broader San Diego community, for the process to fall apart now. The leadership challenge is for the mayor, the council and the many stakeholders who love the park but sometimes have conflicting goals to find a way to come together – and fast.

A dagger it most certainly is. Here is a guy who voluntarily complied with the Mayor's request to rid Balboa Park of automobile traffic, spent money to come up with plans for doing so, and then was rebuffed by San Diego after having already given city institutions hundreds of millions of dollars! Maybe San Diegans just like saying no to a billionaire. Talk about looking a gift horse in the mouth. The City Council even complained about the horseshit in the stable! Perhaps the problem is with the language "bypass off the Cabrillo Bridge" which implies altering the structure of the bridge itself. According to the plan, this is not the case. The bypass has nothing to do with the bridge, and is located a good distance from it. It is really a bypass around the Plaza de Panama which happens to be a bridge not to be confused with the Cabrillo Bridge. Even CalTrans got into the act concerned about the bypass' alleged infringement on the Cabrillo Bridge. The mistake is calling it a "bridge bypass" which suggests that it somehow ties into the structure of the Cabrillo Bridge itself. Such is not the case.

SOHO is in the unenviable position of defending the historical right of automobiles to traverse the park. They want cars in the park because they were always there so they have a right to be there. It's traditional! It's historic! Car traffic represents the American Way of Life. Car free zones are so very European. Pedestrians love to breathe exhaust fumes and play chicken with cars while crossing the street. And what's more San Diego doesn't need any friggin billionaire's money. The city will be glad to pay for any improvements to the park. Oh, what's that? The city's broke! So instead of building this model of relying on philanthropists to take care of the park, after rejecting the Jacobs proposal, the city now will allow the park to deteriorate, maintenance to go undone and improvements to languish by the wayside. But Balboa Park will keep its historic character! That's the important thing.

City Councilman Todd Gloria twittered "Mark my words, the community's vision for a parking free/pedestrian friendly Plaza de Panama in #BalboaPark will be achieved by 2015." Yeah, right. Maybe the cheap charlie version of one. And future philanthropic projects in San Diego? You can't use a billionaire as a pinata and expect to get any. He just might take his marbles and go home!

Are We Giant Suckers? While the US Blows Money on the Military, Europe Spends Dough on Social Programs

by Joshua Holland, Alternet

Hawks simultaneously argue that lavish U.S. military spending subsidizes Europe’s social welfare programs, and that we’re the smarter party in this deal.

June 17, 2011  

Last week, during his final European visit before retiring, Secretary of Defense Robert Gates blasted our NATO allies for spending too little on their militaries.

“The blunt reality,” he told an audience in Brussels, “is that there will be dwindling appetite” in the U.S. “to expend increasingly precious funds on behalf of nations that are apparently unwilling to devote the necessary resources … to be serious and capable partners in their own defense.’’

It's not uncommon for American hawks to whine about those soft Europeans not shelling out enough dough on weapons systems. But let's take a look at what "defense" actually means in this context.

On average, wealthy countries in the Organization for Economic Cooperation and Development spend 2.5 percent of their economic output on their militaries. That's not peanuts with very large economies. Europe is shielded by nuclear arms in the hands of the UK and France (not counting the nukes we “lend” to Germany, Italy, Turkey, Belgium and the Netherlands under a NATO agreement). There are no nation-states likely to attack the continent anytime soon.

So Gates isn't talking about being “capable partners in their own defense” at all – not as long as the word “defense” maintains its meaning. Whatever one thinks about the intervention in Libya, for example, one can't argue that we're actually defending ourselves. What he's saying is that they're not ponying up enough to engage in far-flung conflicts in service of Western hegemony. In this, he is accurate – they enjoy the fruits of an international system dominated by the West without paying through the nose for it.

We do. The U.S. devotes 5.1 percent of its economic activity to "defense," but that only counts the Pentagon's annual budget. It doesn't include military and homeland security spending tucked into other areas of the federal budget. Just a few examples: the costs of maintaining our nuclear arsenal are part of the Department of Energy budget; caring for veterans is in the Department of Veterans' Affairs budget; foreign military assistance falls under the State Department's budget. It also doesn't include the costs of maintaining troops in Iraq and Afghanistan. Those conflicts will run us $170 billion this year -- enough to offer insurance to 35 million low-income people or provide renewable energy to 100 million households, according to the national priorities project.

American hawks accuse Europe of essentially using the United States' enthusiasm for spending a fortune on its military to subsidize Europe's more generous social safety net. And it is true that in 2008, the EU accounted for 26 percent of the world’s military spending, while the U.S., with an economy that‘s around 7 percent smaller, accounted for 46 percent of global military spending. And in 2007, we forked over 16.2 percent of our economy to finance our social safety net, which was 3.1 percentage points below the OECD average.

For their tax dollars –or euros -- they get universal health care, deeply subsidized education (including free university tuition in many countries), modern infrastructure, good mass transit and far less poverty than we have here at home. That may help explain why we have Tea Partiers screaming for cuts while Europe is ablaze with riots against its own "austerity" measures.

And while we outspend everyone on our military, among the 20 most developed countries in the world, the United States is now dead last in life expectancy at birth but leads the pack in infant mortality—40 percent higher than the runner-up. We also lead in the percentage of the population who will die before reaching age 60. Half of our kids need food stamps at some point during their childhoods. There's certainly a modest difference in priorities dividing the Atlantic, but common sense suggests that we're the ones who have it all wrong.

But interestingly, conservatives simultaneously argue that lavish U.S. military spending subsidizes Europe’s social welfare programs, and that we’re the smarter party in this deal. Our kids get the wonderful opportunity to die in distant lands, while theirs are burdened with the horrors of decent retirement security and free health care.

Max Boot, a prominent and utterly pathological neoconservative, went so far as to lament that we, too, are spending too little on the military these days, writing, “It’s hard to remember now, but there was a time when the federal government spent most of its money on the armed forces. In 1962, the total federal budget was $106 billion of which $52 billion—almost half—went for defense. It wasn’t until 1976 that entitlement spending exceeded defense spending.”

For Boot, however, the really frightening prospect is that we’ll go the way of Europe. “Last year government spending in the 27 European Union nations hit 52% of GDP,” he wrote. “But most of them struggle to devote even 2% of GDP to defense... When Europeans after World War II chose to skimp on defense and spend lavishly on social welfare, they abdicated their claims to great power status.”

On that last point, it's worth noting that in a 2010 poll of citizens in 27 countries, 53 percent of respondents said the EU had a positive influence on the world, while 46 percent felt the same about the United States. Europe is unquestionably a global power.

Boot asked, “What happens if the U.S. switches spending from defense to social welfare? Who will protect what used to be known as the 'Free World'? Who will police the sea lanes, stop the proliferation of weapons of mass destruction, combat terrorism, respond to genocide and other unconscionable human rights violations, and deter rogue states from aggression?”

What he doesn’t say is that the American Right has long opposed the kind of international security cooperation that might shift some of the cost of policing the world to other states. If we didn’t insist on doing it ourselves, perhaps we wouldn’t have to.

But I suppose that when Americans are waiting in line for food stamps—or waiting to pay their respects to a soldier who died in some godforsaken country thousands of miles away—they can take an abstract pride in being the world’s only superpower. The argument has always seemed to me like the biggest loser in Las Vegas saying that the house is a sucker.

So remember to take pride in American power, and remember that it comes at a very high price.

Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy: And Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America. Drop him an email or follow him on Twitter.

US Nurses Join International Push for Financial Transaction Tax

Published on Thursday, June 23, 2011 by Labor Notes

by Mischa Gaus

Hundreds of nurses and their allies rallied on Wall Street Wednesday to remind the bankers they owe the nation, and the union movement is determined to collect.

Nurses rallied on Wall Street in downtown Manhattan. The bankers should be happy that unions are calling for a transaction tax “because some us would like them to make restitution,” said Jean Ross, a Minnesota nurse. (Photo: Jenny Brown)

Nurses rallied on Wall Street in downtown Manhattan. The bankers should be happy that unions are calling for a transaction tax “because some us would like them to make restitution,” said Jean Ross, a Minnesota nurse. (Photo: Jenny Brown) “This shared sacrifice stuff is a bunch of hooey. They haven’t given a thing,” said Deb Burger, co-president of National Nurses United, which led the protest. “People are suffering in their homes, in isolation. It is not your fault.”

The action took place as unions in 40 nations rallied in support of a tax on trading stocks, bonds, and derivatives. The tax—already in place in Great Britain and parts of Asia—is an attempt to slow down the tremendous churn in the financial markets by putting a meter on the Wall Street casino.

A small fee per trade could generate up to $350 billion a year in the U.S., NNU says, which could save 1.75 million homeowners from foreclosure.

While the nurses sang and danced between the speeches, the rally wasn’t exactly a lighthearted affair.

The bankers should be happy that unions are calling for a transaction tax “because some us would like them to make restitution,” said Jean Ross, a Minnesota nurse and NNU co-president.

“They should be locked up,” said Selena Hodge, a bloodbank technician at Temple University Hospital in Philadelphia, who weathered a month-long strike last year to preserve her union. Still, her health insurance is now five times as expensive—$100 a week for family coverage.

“We’re paying the price for something we didn’t create,” said Shawn Kramer, a telemetry nurse from Tampa, Florida, who won his union six months ago. “These companies speak dollars and cents, not compassion.”

Larry Hanley, president of the Amalgamated Transit Union, connected the struggle to rein in Wall Street to the attack on unions everywhere. Corporations still win big, he said, and stick working people with the bill.

“We’ve heard that our wages, pensions, and health care are unsustainable,” said Hanley. “Their tax cuts are what’s unsustainable.”

Wednesday’s rally was one piece of NNU’s “Main Street Contract” campaign, which seeks to counter the corporate agenda with union and community demands for job creation, guaranteed health care, secure retirements, and decent education.

“It’s embarrassing that we have to be out here asking for basic needs in a country as rich as ours,” said Bonnie Nesbit, a Michigan Nurses vice president and endoscopy nurse in western Michigan.

To achieve its goals, the union will mount populist appeals because legislative avenues are unproductive, said Rose Ann DeMoro, NNU executive director.

People understand that Wall Street is the “fulcrum point,” she said, and that the rich must pay a bigger share—themes echoed in the large union-backed May 12 march on Wall Street and in SEIU’s emergent Fight for a Fair Economy.

As unions begin to realize their allies aren’t in boardrooms or statehouse corridors, DeMoro said, they could make a powerful statement by moving out of D.C. and standing apart from its “hub of corruption.”

Churning in the Wake

The pain left in the wake of the Great Recession turns up every day in the country’s hospitals, and the nurses responsible for cleaning up the mess can barely conceal their anger.

Neonatal intensive care nurse Sandy Falwell told the crowd about a one-pound baby she cared for, born premature because her mother’s diabetes was not controlled. The mother explained she couldn’t afford insurance for the insulin necessary for a successful pregnancy. “And now I’ve probably killed my baby,” the mother told Falwell, who works at Children’s Hospital in D.C.

“We need help, and we need to put the blame where it belongs,” Falwell said, “and that’s on Wall Street.”

Jacqui Fitts, a medical-surgical nurse in Taunton, Massachusetts, said she’s seen patients so desperate they’re taking pillows and linens from their hospital rooms.

“The difference between the high and low is more and more pronounced,” she said.

The rich schedule elective surgeries while the poor reappear every few weeks for preventable problems they can’t manage.

“We patch them up and give them a safe place to stay for a day,” she said. “Then it’s back into the streets, or in their car.”

Burger said a fellow nurse who distributes food to the homeless has seen the number of clients triple, from 100 to 300.

The elderly especially are skipping drugs or cutting pills in half, said Linda Condon, another Taunton nurse.

“They call it noncompliance but we know it’s because they can’t afford to take care of themselves,” Fitts said.

Nurses from all over the country brought their anger to Wall Street.

“They got us into this mess,” Condon said. “It’s time to solve the problem where it started.”

© 2011 Labor Notes

Number of Homeless Families Grows in San Diego and Nation

by Staff on June 21, 2011, from the OB Rag

in: Civil Rights, San Diego

 The Damm Family in Their Car, Los Angeles, CA, USA

SAN DIEGO — An annual report on homelessness from the Department of Housing and Urban Development shows the number of homeless people in families climbed 20 percent from 2007 to 2010, that was even as homelessness across the country declined by 3.3 percent over the same period.

A similar trend in San Diego County is taxing available resources, according to Peter Callstrom, executive director of San Diego’s Regional Task Force on the Homeless.

“There are only so many beds that accommodate a family unit, so I know there’s waiting lists in order to accommodate the need,” he said. “But we don’t have it in every region of the county that has shelter beds specified for family units, so I know that they’re all tremendously challenged.”

An annual survey done by the task force shows a 19 percent increase in the county’s homeless population since 2008. This year about 9,000 people were counted sleeping on the street or in the county’s temporary shelters during a single night in January.

Callstrom said the trend isn’t good, but without the three-year federal Homelessness Prevention and Rapid Rehousing program, it would likely be worse here.

“Over the course of just the first half of this project already over 3,000 families and individuals have been served through that new program,” he said. “So there could be as many as 3,000 additional individuals and families out on the street.”

The homelessness prevention program matches families and individuals at risk of becoming homeless with services before they are out on the street. Its funding was part of the American Recovery and Reinvestment Act.

Here is the full press release from HUD:

HUD ISSUES 2010 ANNUAL HOMELESS ASSESSMENT REPORT TO CONGRESS

New data shows impact of Recovery Act on mitigating homelessness caused by recession

WASHINGTON – According to its latest national homeless assessment, the U.S. Department of Housing and Urban Development reports the number of homeless persons in the U.S. held steady between 2009 and 2010, despite the economic downturn. For the first time, HUD’s annual report reveals how the Recovery Act’s Homelessness Prevention and Rapid Re-Housing Program (HPRP) helped to mitigate homelessness in America, assisting nearly 700,000 persons in the first year of the program.

“It’s clear that had it not been for President Obama’s Recovery Act, many hundreds of thousands of persons may have fallen into homelessness or remained there ,” said HUD Secretary Shaun Donovan. “During the height of our nation’s economic hardship, we’ve managed to stabilize and even prevent homelessness as we work to find permanent housing solutions for the most vulnerable among us.”

Based on data collected from thousands of local communities, HUD’s 2010 Annual Homeless Assessment Report to Congress finds a continued decline in the number of persons experiencing long-term homelessness due to the dramatic increase in the number of permanent supportive housing units. Those who were chronically homeless – persons with severe disabilities and long homeless histories – decreased one percent between 2009 and 2010, from 110,917 to 109,920. Since 2007, the number of people who are chronically homelessness has decreased by 11 percent, partially due to the number of 34 percent increase in permanent supportive housing beds during that same timeframe.

Homelessness Prevention and Rapid Re-housing Program– Approximately 690,000 people received assistance in the first year of the HPRP including 531,000 (77 percent) individuals who were prevented from becoming homelessness in the first place. The remaining 159,000 (23 percent) persons received ‘rapid re-housing’ assistance to move from the streets or shelters into permanent housing.

Most HPRP participants (59 percent) received assistance for two months or less. Participants receiving homelessness prevention assistance had slightly longer lengths of participation than persons receiving rapid re-housing assistance because prevention assistance was more likely to be provided on a recurring basis, while rapid re-housing was more likely to be one-time assistance – such as a security deposit.

HUD’s annual assessment is based on two measures of homelessness:

Point-In-Time ‘Snapshot’ Counts – these data account for sheltered and unsheltered homeless persons on a single night, usually at the end of January. The number of people experiencing homelessness on a single night increased by 1.1 percent over the last year: from 643,067 in January 2009 to 649,879 in January 2010. A total of 79,344 family households, and 241,621 persons in families, were homeless on the night of the 2010 PIT count. Since 2009, the number of homeless families increased 1.1 percent, and the number of homeless persons in families increased 1.5 percent

12-Month Counts –Using Homeless Management Information Systems (HMIS),these dataprovide more detailed information on persons who access a shelter over the course of a full year. In 2010, 411 communities covering over 4,700 cities and counties submitted useable HMIS data resulting in a 23 percent increase from 2009. This increase results in more precise results as HMIS data collection and reporting capacities continue to improve. HUD estimates that 1.6 million persons experienced homelessness and found shelter between October 1, 2009 and September 30, 2010, a 2.2 percent increase from 2009. The characteristics of sheltered homeless individuals are very different from the characteristics of sheltered persons in families. Individuals are more likely to be white men, over 30 years old, and have a disabling condition, while adults in families are more likely to be younger African-American women without a reported disability. Of all those who sought emergency shelter or transitional housing during 2010, the following characteristics were observed:

• 78 percent of all sheltered homeless persons are adults.

• 62 percent are male.

• 58 percent are members of a minority group.

• 37 percent are 31-to-50 years old.

• 63 percent are in one-person households.

• 37 percent have a disability.

HUD’s report also reveals the following trends:

From 2007-2010:

• Since 2007, the annual number of people using homeless shelters in principal cities has decreased 17 percent (from 1.2 million to 1.0 million), and the annual number of people using homeless shelters in suburban and rural areas has increased 57 percent (from 367,000 to 576,000).

• The number of homeless persons in families has increased by 20 percent from 2007 to 2010, and families currently represent a much larger share of the total sheltered population than ever before. The proportion of homeless people who are using emergency shelter and transitional housing as part of a family has increased from 30 percent to 35 percent during this same period. The increase in sheltered family homelessness is almost certainly a consequence of the economy.

• Despite increases over the past year, there has been overall a 3.3 percent decline in the number of homeless persons from 2007 to 2010: a 3.6 percent decline for individuals and a 2.8 percent decline for persons in families. The overall decline in homelessness during this period can be attributed to a steep drop in homelessness in Los Angeles between 2007 and 2009.

• There were almost 94,000 more sheltered homeless persons in families in 2010 as there were in 2007, and almost 72,000 fewer sheltered homeless individuals. The number of sheltered homeless individuals has declined six percent since 2007, from 1.15 million to 1.04 million.

Looking Ahead

The long-term impacts of the recession are unclear. A recent study found a nearly five-fold increase in the rate of housing overcrowding, suggesting that many families are doubling up in response to the economic downturn. If some of these family support networks already are struggling to make ends meet, some of the doubled-up families may find their way into the homeless residential service system during 2010.

HUD will use the findings from the 2010 AHAR to continue to work to end all homelessness through the Obama Administration’s initiative, Opening Doors, an unprecedented federal strategy to end veteran and chronic homelessness by 2015, and to end homelessness among children, families, and youth by 2020.

Read HUD’s 2010 Annual Homeless Assessment Report to Congress .

War is a Profit Center for Defense Contractors and Selected Foreign Dictators

by John Lawrence

War is immensely profitable; that's why there is so much of it. It's the only domestic industry to speak of. All the rest have been outsourced. War constitutes almost the entire GDP of Afghanistan while enriching the corrupt Karzai and his henchmen. War is immensely profitable to Pakistan too - $2 billion a year profitable. Lockheed Martin, General Dynamics, Boeing and other defense contractors would see their profits sag if it weren't for their lucrative contracts from the Defense Department. Although war is essentially the only domestic industry, we're still dependent for parts for cruise missiles and smart bombs from China. Senator Bernie Sanders had to actually introduce a piece of legislation to get the Smithsonian gift shop to stop stocking busts of Washington and Jefferson MADE IN CHINA! While the US pours billions of dollars down the rathole of war, other countries are using their resources to build up their infrastructure, provide free education to their citizens, free health care and a decent quality of life. THe US is drowning in debt precisely because it has squandered its resources on its war economy. Where other countries have built bridges, the US has destroyed bridges. The destructive power of the US is second to none while its politicians squabble over whether or not to provide a few crumbs for the poor.

And as for the countries we have expended so much blood and treasure on, they essentially say to us: "don't bang your ass on the door on the way out." Are they grateful? No. Are they glad we came? No. They use us for the money that we bring with the wars we fight. Our "puppet" leaders such as Karzai want the long green so they go along with our ridiculous assertions of bringing them freedom and democracy, and then they ridicule us when the gravy train runs out. Today President Obama gave a very rational explanation of his troop withdrawals from Afghanistan. It was very precise and rational, almost mathematically tautological. We will bring out so many now, so many next year, so many the year after that etc. And as our troops stand down, their troops will stand up? Where have I heard that before? At least we can't be accused of cutting and running. However, President Obama said nothing about withdrawing the money from Afghanistan. That's what I want to hear. Like, for instance, we withdraw $200 million per week (of the $2 billion per week we're spending now) followed by another $500 million per week next year etc. Withdrawing troops is almost irrelevant if we are continuing to spend the same amount of money there. The American people want the money withdrawn as well as the troops with the money being spent at home instead of over there. But there was nary a word about who's going to pay all those Afghani soldiers who are standing up as ours stand down (hint: it's us) or who's going to keep on paying all those expensive private contractors about whose prescence there's not even a mention. And when the money gravy train dries up, all those Afghani soldiers just might switch sides if the other side offers to pay them. Or maybe they might do it anyway just for the hell of it. If anyone thinks they are loyal to the corrupt Karzai, they have another think coming. And just as soon as American money dries up, Karzai himself will be off to his Swiss villa and his Swiss bank account: MISSION ACCOMPLISHED! As the US leaves Afghanistan they will probably be treated to the same refrain: don't bang your ass on the door on the way out!

The US has spent $1.3 trillion on two wars in the past decade while ballooning the national debt. And all this has done is to give the US the reputation as an overlord and an occupier in most of the developing world. Karzai freely calls the US an occupier and doesn't mind criticising us to his heart's content. The same is true of Pakistan. With friends like these we don't need enemies. We give Israel between $2 and $3 billion in aid each year despite the fact that they don't host any of our military bases. Instead we put bases in places like Bahrain and other Arab dictatorships. We give Egypt $2 billion a year despite the fact that there are no military bases there either. It's simply a bribe for their good behaviour in not attacking Israel. Meanwhile, we starve the American people, throw them out on the streets, cut unemployment aid to the bone, deny poor people health care and do everything we can to increase the homeless population. Charity begins at home yet we throw billions at foreign dictators in an attempt to control and rule the world. We think we can buy the rest of the world off, and all it's doing is bankrupting us here at home.

A smart policy regarding terrorism would be to declare that we will hunt down terorists wherever they are found using our intelligence resources and take them out wherever they are found using drones and SEALs. Please note that this would cost very little compared to an invasion of a sovereign nation using ground troops. This policy was actually carried out with regard to the killing of bin Laden. Let's execute the same policy with regard to al Zawahiri, al Quaeda's new number 1. We have satellite imagery of everywhere on the globe combined with the ability to monitor cell phones and bank accounts. We don't need full scale invasions followed by nation building. Terrorists can launch an attack from anywhere on the globe. It's ridiculous to believe that an attack could only come from Afghanistan or Pakistan, and, therefore, we must stay there on and on and root out all the Taliban. Terrorists don't need the Taliban or Afghanistan or Pakistan. They can strike from anywhere and we can take them out anywhere. Why don't we confine our attention to the kind of raids that killed bin Laden that don't require invasions and occupations or bribes paid to dictators? You go in, you take out the target and then you go out. Mission accomplished without a lot of money being expended. And save billions in "foreign aid."

The New York Times reported:

On Monday, the United States Conference of Mayors made that connection explicitly, saying that American taxes should be paying for bridges in Baltimore and Kansas City, not in Baghdad and Kandahar. The mayors’ group approved a resolution calling for an early end to the American military role in Afghanistan and Iraq, asking Congress to redirect the billions now being spent on war and reconstruction costs toward urgent domestic needs. The resolution, which noted that local governments cut 28,000 jobs in May alone, was the group’s first venture into foreign policy since it passed a resolution four decades ago calling for an end to the Vietnam War. And in a speech on the Senate floor on Tuesday, Senator Joe Manchin III, Democrat of West Virginia, said: “We can no longer, in good conscience, cut services and programs at home, raise taxes or — and this is very important — lift the debt ceiling in order to fund nation-building in Afghanistan. The question the president faces — we all face — is quite simple: Will we choose to rebuild America or Afghanistan? In light of our nation’s fiscal peril, we cannot do both.” Demonstrators describing themselves as “angry jobless citizens” said they would picket the Capitol on Wednesday to urge members of Congress to use any savings from Mr. Obama’s troop reductions to create more jobs. The group sponsoring the demonstration, the Prayer Without Ceasing Party, said in a statement on Tuesday that it was “urging the masses to call their congressmen and the president to ensure that jobs receive a top priority when the troops start returning to America.” Spending on the war in Afghanistan has skyrocketed since Mr. Obama took office, to $118.6 billion in 2011. It was $14.7 billion in 2003, when President George W. Bush turned his attention and American resources to the war in Iraq. The increase is easy to explain. When Mr. Obama took office, he vowed to aggressively pursue what he termed America’s “war of necessity” (Afghanistan) and to withdraw from America’s “war of choice” (Iraq). He has done so; the lines on Iraq and Afghanistan war spending crossed in 2010, when the United States spent $93.8 billion in Afghanistan versus $71.3 billion in Iraq, according to the Congressional Research Service.

If the US, which has a greater Defense budget than all the rest of the world's countries combined, does not wake up and realize that it is more important to build a strong domestic society at home than it is to try and control the world, the US will end up a hollowed out, bankrupt country approaching Third World status - the only developed country to descend to that level. And it is all because of our value of spending far more on war than on domestic tranquillity. It is all about the fact that we have kowtowed to corporations which a few short years ago contributed 30% of Federal revenues and now contribute 7%. It is all about political power which now has little relationship to the wishes of the people and is more and more a handmaiden of rich corporate interests whose lobbyists actually write most of the laws and whose tax lawyers spend their days figuring out how little their employers have to pay in taxes. And capital gains are taxed at a low, low 15% instead of 29% which was the rate in much of the 1990s. The tax burden, therefore, is shifted to the working stiffs, and the upper 1% gains a fortune.

While we create job programs in Afghanistan, we eliminate them at home:

“Do we really need to be spending $120 billion in a country with a G.D.P. that’s one-sixth that size?” asked Brian Katulis, a national security expert at the Center for American Progress, a policy group with close ties to the Obama administration. “Most Americans would be shocked to know that we’re spending that kind of money for jobs programs for former Taliban, and would wonder where are our jobs programs for Detroit and Cleveland?”

In 2010, Congress — at the Obama administration’s request — set aside $100 million to support programs in Afghanistan aimed at moving former insurgents off the battlefields and into the country’s mainstream economy. Those efforts — similar to what the Bush administration did in Iraq — have yet to bear much fruit; the 1,700 fighters . who have enrolled in the reintegration program represent only a fraction of the estimated 20,000 to 40,000 Taliban insurgents, The New York Times reported Monday.

 

US priorities are totally out of whack. The reason why so many of the world's other developed countries are doing so well and provide so many benefits to their citizens is precisely because they spend so much less on war. The war economy of the US combined with preferential treatment for the wealthy in terms of tax cuts is precisely why the quality of life in the US is aiming towards its nadir. Public anything is to be eliminated with the privatization of every function of domestic life. Public schools are to be eliminated in favor of private schools. Public health care is to be eliminated in favor of the privatization of health care. More and more perks and privileges are to be heaped upon the already wealthy. Private wealth is to replace public wealth. Infrastructure is allowed to crumble because this mostly affects the public while the private wealthy can spend their way around any crumbling infrastructure. Other countries still have the arcane notion that the country's worth has something to do with the welfare of the majority of its people. The US is only concerned with the welfare of its wealthiest citizens.

Republicans in Congress, while having failed to impose their neocon values of privatization and tax cuts for the rich on other countries, are going all out to at least impose those values on its own citizens making the US the bastion of the war economy and favoritism towards the wealthy and large corporations. This combined with a totally dysfunctional political system in which money rules is making the US a country which is totally out of step with the rest of the world and is sacrificing its people on the altar of war.

Climate of Denial: Can Science and the Truth Withstand the Merchants of Poison?

By Al Gore

June 22, 2011 7:45 AM ET, Rolling Stone

The first time I remember hearing the question "is it real?" was when I went as a young boy to see a traveling show put on by "professional wrestlers" one summer evening in the gym of the Forks River Elementary School in Elmwood, Tennessee.

The evidence that it was real was palpable: "They're really hurting each other! That's real blood! Look a'there! They can't fake that!" On the other hand, there was clearly a script (or in today's language, a "narrative"), with good guys to cheer and bad guys to boo.

But the most unusual and in some ways most interesting character in these dramas was the referee: Whenever the bad guy committed a gross and obvious violation of the "rules" — such as they were — like using a metal folding chair to smack the good guy in the head, the referee always seemed to be preoccupied with one of the cornermen, or looking the other way. Yet whenever the good guy — after absorbing more abuse and unfairness than any reasonable person could tolerate — committed the slightest infraction, the referee was all over him. The answer to the question "Is it real?" seemed connected to the question of whether the referee was somehow confused about his role: Was he too an entertainer?

 Photo Gallery: 11 extreme-weather signs the climate crisis is real

That is pretty much the role now being played by most of the news media in refereeing the current wrestling match over whether global warming is "real," and whether it has any connection to the constant dumping of 90 million tons of heat-trapping emissions into the Earth's thin shell of atmosphere every 24 hours.

 This article appears in the July 7, 2011 issue of Rolling Stone. The issue is available on newsstands and in the digital archive on June 24.

Admittedly, the contest over global warming is a challenge for the referee because it's a tag-team match, a real free-for-all. In one corner of the ring are Science and Reason. In the other corner: Poisonous Polluters and Right-wing Ideologues.

How Obama gave up on climate change legislation

The referee — in this analogy, the news media — seems confused about whether he is in the news business or the entertainment business. Is he responsible for ensuring a fair match? Or is he part of the show, selling tickets and building the audience? The referee certainly seems distracted: by Donald Trump, Charlie Sheen, the latest reality show — the list of serial obsessions is too long to enumerate here.

Photo Gallery: 12 politicians and executives blocking progress on climate change

But whatever the cause, the referee appears not to notice that the Polluters and Ideologues are trampling all over the "rules" of democratic discourse. They are financing pseudoscientists whose job is to manufacture doubt about what is true and what is false; buying elected officials wholesale with bribes that the politicians themselves have made "legal" and can now be made in secret; spending hundreds of millions of dollars each year on misleading advertisements in the mass media; hiring four anti-climate lobbyists for every member of the U.S. Senate and House of Representatives. (Question: Would Michael Jordan have been a star if he was covered by four defensive players every step he took on the basketball court?)

How oil and gas companies have blocked progress on global warming

This script, of course, is not entirely new: A half-century ago, when Science and Reason established the linkage between cigarettes and lung diseases, the tobacco industry hired actors, dressed them up as doctors, and paid them to look into television cameras and tell people that the linkage revealed in the Surgeon General's Report was not real at all. The show went on for decades, with more Americans killed each year by cigarettes than all of the U.S. soldiers killed in all of World War II.

This time, the scientific consensus is even stronger. It has been endorsed by every National Academy of science of every major country on the planet, every major professional scientific society related to the study of global warming and 98 percent of climate scientists throughout the world. In the latest and most authoritative study by 3,000 of the very best scientific experts in the world, the evidence was judged "unequivocal."

But wait! The good guys transgressed the rules of decorum, as evidenced in their private e-mails that were stolen and put on the Internet. The referee is all over it: Penalty! Go to your corner! And in their 3,000-page report, the scientists made some mistakes! Another penalty!

And if more of the audience is left confused about whether the climate crisis is real? Well, the show must go on. After all, it's entertainment. There are tickets to be sold, eyeballs to glue to the screen.

Part of the script for this show was leaked to The New York Times as early as 1991. In an internal document, a consortium of the largest global-warming polluters spelled out their principal strategy: "Reposition global warming as theory, rather than fact." Ever since, they have been sowing doubt even more effectively than the tobacco companies before them.

To sell their false narrative, the Polluters and Ideologues have found it essential to undermine the public's respect for Science and Reason by attacking the integrity of the climate scientists. That is why the scientists are regularly accused of falsifying evidence and exaggerating its implications in a greedy effort to win more research grants, or secretly pursuing a hidden political agenda to expand the power of government. Such slanderous insults are deeply ironic: extremist ideologues — many financed or employed by carbon polluters — accusing scientists of being greedy extremist ideologues.

After World War II, a philosopher studying the impact of organized propaganda on the quality of democratic debate wrote, "The conversion of all questions of truth into questions of power has attacked the very heart of the distinction between true and false."

Is the climate crisis real? Yes, of course it is. Pause for a moment to consider these events of just the past 12 months:

• Heat. According to NASA, 2010 was tied with 2005 as the hottest year measured since instruments were first used systematically in the 1880s. Nineteen countries set all-time high temperature records. One city in Pakistan, Mohenjo-Daro, reached 128.3 degrees Fahrenheit, the hottest temperature ever measured in an Asian city. Nine of the 10 hottest years in history have occurred in the last 13 years. The past decade was the hottest ever measured, even though half of that decade represented a "solar minimum" — the low ebb in the natural cycle of solar energy emanating from the sun.

• Floods. Megafloods displaced 20 million people in Pakistan, further destabilizing a nuclear-armed country; inundated an area of Australia larger than Germany and France combined; flooded 28 of the 32 districts that make up Colombia, where it has rained almost continuously for the past year; caused a "thousand-year" flood in my home city of Nashville; and led to all-time record flood levels in the Mississippi River Valley. Many places around the world are now experiencing larger and more frequent extreme downpours and snowstorms; last year's "Snowmaggedon" in the northeastern United States is part of the same pattern, notwithstanding the guffaws of deniers.

• Drought. Historic drought and fires in Russia killed an estimated 56,000 people and caused wheat and other food crops in Russia, Ukraine and Kazakhstan to be removed from the global market, contributing to a record spike in food prices. "Practically everything is burning," Russian president Dmitry Medvedev declared. "What's happening with the planet's climate right now needs to be a wake-up call to all of us." The drought level in much of Texas has been raised from "extreme" to "exceptional," the highest category. This spring the majority of the counties in Texas were on fire, and Gov. Rick Perry requested a major disaster declaration for all but two of the state's 254 counties. Arizona is now fighting the largest fire in its history. Since 1970, the fire season throughout the American West has increased by 78 days. Extreme droughts in central China and northern France are currently drying up reservoirs and killing crops.

• Melting Ice. An enormous mass of ice, four times larger than the island of Manhattan, broke off from northern Greenland last year and slipped into the sea. The acceleration of ice loss in both Greenland and Antarctica has caused another upward revision of global sea-level rise and the numbers of refugees expected from low-lying coastal areas. The Arctic ice cap, which reached a record low volume last year, has lost as much as 40 percent of its area during summer in just 30 years.

These extreme events are happening in real time. It is not uncommon for the nightly newscast to resemble a nature hike through the Book of Revelation. Yet most of the news media completely ignore how such events are connected to the climate crisis, or dismiss the connection as controversial; after all, there are scientists on one side of the debate and deniers on the other. A Fox News executive, in an internal e-mail to the network's reporters and editors that later became public, questioned the "veracity of climate change data" and ordered the journalists to "refrain from asserting that the planet has warmed (or cooled) in any given period without IMMEDIATELY pointing out that such theories are based upon data that critics have called into question."

But in the "real" world, the record droughts, fires, floods and mudslides continue to increase in severity and frequency. Leading climate scientists like Jim Hansen and Kevin Trenberth now say that events like these would almost certainly not be occurring without the influence of man-made global warming. And that's a shift in the way they frame these impacts. Scientists used to caution that we were increasing the probability of such extreme events by "loading the dice" — pumping more carbon into the atmosphere. Now the scientists go much further, warning that we are "painting more dots on the dice."  We are not only more likely to roll 12s; we are now rolling 13s and 14s. In other words, the biggest storms are not only becoming more frequent, they are getting bigger, stronger and more destructive.

"The only plausible explanation for the rise in weather-related catastrophes is climate change," Munich Re, one of the two largest reinsurance companies in the world, recently stated. "The view that weather extremes are more frequent and intense due to global warming coincides with the current state of scientific knowledge."

Many of the extreme and destructive events are the result of the rapid increase in the amount of heat energy from the sun that is trapped in the atmosphere, which is radically disrupting the planet's water cycle. More heat energy evaporates more water into the air, and the warmer air holds a lot more moisture. This has huge consequences that we now see all around the world.

When a storm unleashes a downpour of rain or snow, the precipitation does not originate just in the part of the sky directly above where it falls. Storms reach out — sometimes as far as 2,000 miles — to suck in water vapor from large areas of the sky, including the skies above oceans, where water vapor has increased by four percent in just the last 30 years. (Scientists often compare this phenomenon to what happens in a bathtub when you open the drain; the water rushing out comes from the whole tub, not just from the part of the tub directly above the drain. And when the tub is filled with more water, more goes down the drain. In the same way, when the warmer sky is filled with a lot more water vapor, there are bigger downpours when a storm cell opens the "drain.")

In many areas, these bigger downpours also mean longer periods between storms — at the same time that the extra heat in the air is also drying out the soil. That is part of the reason so many areas have been experiencing both record floods and deeper, longer-lasting droughts.

Moreover, the scientists have been warning us for quite some time — in increasingly urgent tones — that things will get much, much worse if we continue the reckless dumping of more and more heat-trapping pollution into the atmosphere. Drought is projected to spread across significant, highly populated areas of the globe throughout this century. Look at what the scientists say is in store for the Mediterranean nations. Should we care about the loss of Spain, France, Italy, the Balkans, Turkey, Tunisia? Look at what they say is in store for Mexico. Should we notice? Should we care?

Maybe it's just easier, psychologically, to swallow the lie that these scientists who devote their lives to their work are actually greedy deceivers and left-wing extremists — and that we should instead put our faith in the pseudoscientists financed by large carbon polluters whose business plans depend on their continued use of the atmospheric commons as a place to dump their gaseous, heat-trapping waste without limit or constraint, free of charge.

The truth is this: What we are doing is functionally insane. If we do not change this pattern, we will condemn our children and all future generations to struggle with ecological curses for several millennia to come. Twenty percent of the global-warming pollution we spew into the sky each day will still be there 20,000 years from now!

We do have another choice. Renewable energy sources are coming into their own. Both solar and wind will soon produce power at costs that are competitive with fossil fuels; indications are that twice as many solar installations were erected worldwide last year as compared to 2009. The reductions in cost and the improvements in efficiency of photovoltaic cells over the past decade appear to be following an exponential curve that resembles a less dramatic but still startling version of what happened with computer chips over the past 50 years.

Enhanced geothermal energy is potentially a nearly limitless source of competitive electricity. Increased energy efficiency is already saving businesses money and reducing emissions significantly. New generations of biomass energy — ones that do not rely on food crops, unlike the mistaken strategy of making ethanol from corn — are extremely promising. Sustainable forestry and agriculture both make economic as well as environmental sense. And all of these options would spread even more rapidly if we stopped subsidizing Big Oil and Coal and put a price on carbon that reflected the true cost of fossil energy — either through the much-maligned cap-and-trade approach, or through a revenue-neutral tax swap.

All over the world, the grassroots movement in favor of changing public policies to confront the climate crisis and build a more prosperous, sustainable future is growing rapidly. But most governments remain paralyzed, unable to take action — even after years of volatile gasoline prices, repeated wars in the Persian Gulf, one energy-related disaster after another, and a seemingly endless stream of unprecedented and lethal weather disasters.

Continuing on our current course would be suicidal for global civilization. But the key question is: How do we drive home that fact in a democratic society when questions of truth have been converted into questions of power? When the distinction between what is true and what is false is being attacked relentlessly, and when the referee in the contest between truth and falsehood has become an entertainer selling tickets to a phony wrestling match?

The "wrestling ring" in this metaphor is the conversation of democracy. It used to be called the "public square." In ancient Athens, it was the Agora. In the Roman Republic, it was the Forum. In the Egypt of the recent Arab Spring, "Tahrir Square" was both real and metaphorical — encompassing Facebook, Twitter, Al-Jazeera and texting.

In the America of the late-18th century, the conversation that led to our own "Spring" took place in printed words: pamphlets, newsprint, books, the "Republic of Letters." It represented the fullest flower of the Enlightenment, during which the oligarchic power of the monarchies, the feudal lords and the Medieval Church was overthrown and replaced with a new sovereign: the Rule of Reason.

The public square that gave birth to the new consciousness of the Enlightenment emerged in the dozen generations following he invention of the printing press — "the Gutenberg Galaxy," the scholar Marshall McLuhan called it — a space in which the conversation of democracy was almost equally accessible to every literate person. Individuals could both find the knowledge that had previously been restricted to elites and contribute their own ideas.

Ideas that found resonance with others rose in prominence much the way Google searches do today, finding an ever larger audience and becoming a source of political power for individuals with neither wealth nor force of arms. Thomas Paine, to take one example, emigrated from England to Philadelphia with no wealth, no family connections and no power other than that which came from his ability to think and write clearly — yet his Common Sense became the Harry Potter of Revolutionary America. The "public interest" mattered, was actively discussed and pursued.

But the "public square" that gave birth to America has been transformed beyond all recognition. The conversation that matters most to the shaping of the "public mind" now takes place on television. Newspapers and magazines are in decline. The Internet, still in its early days, will one day support business models that make true journalism profitable — but up until now, the only successful news websites aggregate content from struggling print publications. Web versions of the newspapers themselves are, with few exceptions, not yet making money. They bring to mind the classic image of Wile E. Coyote running furiously in midair just beyond the edge of the cliff, before plummeting to the desert floor far beneath him.

The average American, meanwhile, is watching television an astonishing five hours a day. In the average household, at least one television set is turned on more than eight hours a day. Moreover, approximately 75 percent of those using the Internet frequently watch television at the same time that they are online.

Unlike access to the "public square" of early America, access to television requires large amounts of money. Thomas Paine could walk out of his front door in Philadelphia and find a dozen competing, low-cost print shops within blocks of his home. Today, if he traveled to the nearest TV station, or to the headquarters of nearby Comcast — the dominant television provider in America — and tried to deliver his new ideas to the American people, he would be laughed off the premises. The public square that used to be a commons has been refeudalized, and the gatekeepers charge large rents for the privilege of communicating to the American people over the only medium that really affects their thinking. "Citizens" are now referred to more commonly as "consumers" or "the audience."

That is why up to 80 percent of the campaign budgets for candidates in both major political parties is devoted to the purchase of 30-second TV ads. Since the rates charged for these commercials increase each year, the candidates are forced to raise more and more money in each two-year campaign cycle.

Of course, the only reliable sources from which such large sums can be raised continuously are business lobbies. Organized labor, a shadow of its former self, struggles to compete, and individuals are limited by law to making small contributions. During the 2008 campaign, there was a bubble of hope that Internet-based fundraising might even the scales, but in the end, Democrats as well as Republicans relied far more on traditional sources of large contributions. Moreover, the recent deregulation of unlimited — and secret — donations by wealthy corporations has made the imbalance even worse.

In the new ecology of political discourse, special-interest contributors of the large sums of money now required for the privilege of addressing voters on a wholesale basis are not squeamish about asking for the quo they expect in return for their quid. Politicians who don't acquiesce don't get the money they need to be elected and re-elected. And the impact is doubled when special interests make clear — usually bluntly — that the money they are withholding will go instead to opponents who are more than happy to pledge the desired quo. Politicians have been racing to the bottom for some time, and are presently tunneling to new depths. It is now commonplace for congressmen and senators first elected decades ago — as I was — to comment in private that the whole process has become unbelievably crass, degrading and horribly destructive to the core values of American democracy.

Largely as a result, the concerns of the wealthiest individuals and corporations routinely trump the concerns of average Americans and small businesses. There are a ridiculously large number of examples: eliminating the inheritance tax paid by the wealthiest one percent of families is considered a much higher priority than addressing the suffering of the millions of long-term unemployed; Wall Street's interest in legalizing gambling in trillions of dollars of "derivatives" was considered way more important than protecting the integrity of the financial system and the interests of middle-income home buyers. It's a long list.

Almost every group organized to promote and protect the "public interest" has been backpedaling and on the defensive. By sharp contrast, when a coalition of powerful special interests sets out to manipulate U.S. policy, their impact can be startling — and the damage to the true national interest can be devastating.

In 2002, for example, the feverish desire to invade Iraq required convincing the American people that Saddam Hussein was somehow responsible for attacking the United States on September 11th, 2001, and that he was preparing to attack us again, perhaps with nuclear weapons. When the evidence — the "facts" — stood in the way of that effort to shape the public mind, they were ridiculed, maligned and ignored. Behind the scenes, the intelligence was manipulated and the public was intentionally deceived. Allies were pressured to adopt the same approach with their publics. A recent inquiry in the U.K. confirmed this yet again. "We knew at the time that the purpose of the dossier was precisely to make a case for war, rather than setting out the available intelligence," Maj. Gen. Michael Laurie testified. "To make the best out of sparse and inconclusive intelligence, the wording was developed with care." Why? As British intelligence put it, the overthrow of Saddam was "a prize because it could give new security to oil supplies."

That goal — the real goal — could have been debated on its own terms. But as Bush administration officials have acknowledged, a truly candid presentation would not have resulted in sufficient public support for the launching of a new war. They knew that because they had studied it and polled it. So they manipulated the debate, downplayed the real motive for the invasion, and made a different case to the public — one based on falsehoods.

And the "referee" — the news media — looked the other way. Some, like Fox News, were hyperactive cheerleaders. Others were intimidated into going along by the vitriol heaped on any who asked inconvenient questions. (They know it; many now acknowledge it, sheepishly and apologetically.)

Senators themselves fell, with a few honorable exceptions, into the same two camps. A few weeks before the United States invaded Iraq, the late Robert Byrd — God rest his soul — thundered on the Senate floor about the pitiful quality of the debate over the choice between war and peace: "Yet, this Chamber is, for the most part, silent — ominously, dreadfully silent. There is no debate, no discussion, no attempt to lay out for the nation the pros and cons of this particular war. There is nothing."

The chamber was silent, in part, because many senators were somewhere else — attending cocktail parties and receptions, largely with special-interest donors, raising money to buy TV ads for their next campaigns. Nowadays, in fact, the scheduling of many special-interest fundraisers mirrors the schedule of votes pending in the House and Senate.

By the time we invaded Iraq, polls showed, nearly three-quarters of the American people were convinced that the person responsible for the planes flying into the World Trade Center Towers was indeed Saddam Hussein. The rest is history — though, as Faulkner wrote, "The past is never dead. It's not even past." Because of that distortion of the truth in the past, we are still in Iraq; and because the bulk of our troops and intelligence assets were abruptly diverted from Afghanistan to Iraq, we are also still in Afghanistan.

In the same way, because the banks had their way with Congress when it came to gambling on unregulated derivatives and recklessly endangering credit markets with subprime mortgages, we still have almost double-digit unemployment, historic deficits, Greece and possibly other European countries teetering on the edge of default, and the threat of a double-dip recession. Even the potential default of the United States of America is now being treated by many politicians and too many in the media as yet another phony wrestling match, a political game. Are the potential economic consequences of a U.S. default "real"? Of course they are! Have we gone completely nuts?

We haven't gone nuts — but the "conversation of democracy" has become so deeply dysfunctional that our ability to make intelligent collective decisions has been seriously impaired. Throughout American history, we relied on the vibrancy of our public square — and the quality of our democratic discourse — to make better decisions than most nations in the history of the world. But we are now routinely making really bad decisions that completely ignore the best available evidence of what is true and what is false. When the distinction between truth and falsehood is systematically attacked without shame or consequence — when a great nation makes crucially important decisions on the basis of completely false information that is no longer adequately filtered through the fact-checking function of a healthy and honest public discussion — the public interest is severely damaged.

That is exactly what is happening with U.S. decisions regarding the climate crisis. The best available evidence demonstrates beyond any reasonable doubt that the reckless spewing of global-warming pollution in obscene quantities into the atmospheric commons is having exactly the consequences long predicted by scientists who have analyzed the known facts according to the laws of physics.

The emergence of the climate crisis seems sudden only because of a relatively recent discontinuity in the relationship between human civilization and the planet's ecological system. In the past century, we have quadrupled global population while relying on the burning of carbon-based fuels — coal, oil and gas — for 85 percent of the world's energy. We are also cutting and burning forests that would otherwise help remove some of the added CO2 from the atmosphere, and have converted agriculture to an industrial model that also runs on carbon-based fuels and strip-mines carbon-rich soils.

The cumulative result is a radically new reality — and since human nature makes us vulnerable to confusing the unprecedented with the improbable, it naturally seems difficult to accept. Moreover, since this new reality is painful to contemplate, and requires big changes in policy and behavior that are at the outer limit of our ability, it is all too easy to fall into the psychological state of denial. As with financial issues like subprime mortgages and credit default swaps, the climate crisis can seem too complex to worry about, especially when the shills for the polluters constantly claim it's all a hoax anyway. And since the early impacts of climatic disruption are distributed globally, they masquerade as an abstraction that is safe to ignore.

These vulnerabilities, rooted in our human nature, are being manipulated by the tag-team of Polluters and Ideologues who are trying to deceive us. And the referee — the news media — is once again distracted. As with the invasion of Iraq, some are hyperactive cheerleaders for the deception, while others are intimidated into complicity, timidity and silence by the astonishing vitriol heaped upon those who dare to present the best evidence in a professional manner. Just as TV networks who beat the drums of war prior to the Iraq invasion were rewarded with higher ratings, networks now seem reluctant to present the truth about the link between carbon pollution and global warming out of fear that conservative viewers will change the channel — and fear that they will receive a torrent of flame e-mails from deniers.

Many politicians, unfortunately, also fall into the same two categories: those who cheerlead for the deniers and those who cower before them. The latter group now includes several candidates for the Republican presidential nomination who have felt it necessary to abandon their previous support for action on the climate crisis; at least one has been apologizing profusely to the deniers and begging for their forgiveness.

"Intimidation" and "timidity" are connected by more than a shared word root. The first is designed to produce the second. As Yeats wrote almost a century ago, "The best lack all conviction, while the worst are full of passionate intensity."

Barack Obama's approach to the climate crisis represents a special case that requires careful analysis. His election was accompanied by intense hope that many things in need of change would change. Some things have, but others have not. Climate policy, unfortunately, is in the second category. Why?

First of all, anyone who honestly examines the incredible challenges confronting President Obama when he took office has to feel enormous empathy for him: the Great Recession, with the high unemployment and the enormous public and private indebtedness it produced; two seemingly interminable wars; an intractable political opposition whose true leaders — entertainers masquerading as pundits — openly declared that their objective was to ensure that the new president failed; a badly broken Senate that is almost completely paralyzed by the threat of filibuster and is controlled lock, stock and barrel by the oil and coal industries; a contingent of nominal supporters in Congress who are indentured servants of the same special interests that control most of the Republican Party; and a ferocious, well-financed and dishonest campaign poised to vilify anyone who dares offer leadership for the reduction of global-warming pollution.

In spite of these obstacles, President Obama included significant climate-friendly initiatives in the economic stimulus package he presented to Congress during his first month in office. With the skillful leadership of House Speaker Nancy Pelosi and committee chairmen Henry Waxman and Ed Markey, he helped secure passage of a cap-and-trade measure in the House a few months later. He implemented historic improvements in fuel-efficiency standards for automobiles, and instructed the Environmental Protection Agency to move forward on the regulation of global-warming pollution under the Clean Air Act. He appointed many excellent men and women to key positions, and they, in turn, have made hundreds of changes in environmental and energy policy that have helped move the country forward slightly on the climate issue. During his first six months, he clearly articulated the link between environmental security, economic security and national security — making the case that a national commitment to renewable energy could simultaneously reduce unemployment, dependence on foreign oil and vulnerability to the disruption of oil markets dominated by the Persian Gulf reserves. And more recently, as the issue of long-term debt has forced discussion of new revenue, he proposed the elimination of unnecessary and expensive subsidies for oil and gas.

But in spite of these and other achievements, President Obama has thus far failed to use the bully pulpit to make the case for bold action on climate change. After successfully passing his green stimulus package, he did nothing to defend it when Congress decimated its funding. After the House passed cap and trade, he did little to make passage in the Senate a priority. Senate advocates — including one Republican — felt abandoned when the president made concessions to oil and coal companies without asking for anything in return. He has also called for a massive expansion of oil drilling in the United States, apparently in an effort to defuse criticism from those who argue speciously that "drill, baby, drill" is the answer to our growing dependence on foreign oil.

The failure to pass legislation to limit global-warming pollution ensured that the much-anticipated Copenhagen summit on a global treaty in 2009 would also end in failure. The president showed courage in attending the summit and securing a rhetorical agreement to prevent a complete collapse of the international process, but that's all it was — a rhetorical agreement. During the final years of the Bush-Cheney administration, the rest of the world was waiting for a new president who would aggressively tackle the climate crisis — and when it became clear that there would be no real change from the Bush era, the agenda at Copenhagen changed from "How do we complete this historic breakthrough?" to "How can we paper over this embarrassing disappointment?"

Some concluded from the failure in Copenhagen that it was time to give up on the entire U.N.-sponsored process for seeking an international agreement to reduce both global-warming pollution and deforestation. Ultimately, however, the only way to address the climate crisis will be with a global agreement that in one way or another puts a price on carbon. And whatever approach is eventually chosen, the U.S. simply must provide leadership by changing our own policy.

Yet without presidential leadership that focuses intensely on making the public aware of the reality we face, nothing will change. The real power of any president, as Richard Neustadt wrote, is "the power to persuade." Yet President Obama has never presented to the American people the magnitude of the climate crisis. He has simply not made the case for action. He has not defended the science against the ongoing, withering and dishonest attacks. Nor has he provided a presidential venue for the scientific community — including our own National Academy — to bring the reality of the science before the public.

Here is the core of it: we are destroying the climate balance that is essential to the survival of our civilization. This is not a distant or abstract threat; it is happening now. The United States is the only nation that can rally a global effort to save our future. And the president is the only person who can rally the United States.

Many political advisers assume that a president has to deal with the world of politics as he finds it, and that it is unwise to risk political capital on an effort to actually lead the country toward a new understanding of the real threats and real opportunities we face. Concentrate on the politics of re-election, they say. Don't take chances.

All that might be completely understandable and make perfect sense in a world where the climate crisis wasn't "real." Those of us who support and admire President Obama understand how difficult the politics of this issue are in the context of the massive opposition to doing anything at all — or even to recognizing that there is a crisis. And assuming that the Republicans come to their senses and avoid nominating a clown, his re-election is likely to involve a hard-fought battle with high stakes for the country. All of his supporters understand that it would be self-defeating to weaken Obama and heighten the risk of another step backward. Even writing an article like this one carries risks; opponents of the president will excerpt the criticism and strip it of context.

But in this case, the President has reality on his side. The scientific consensus is far stronger today than at any time in the past. Here is the truth: The Earth is round; Saddam Hussein did not attack us on 9/11; Elvis is dead; Obama was born in the United States; and the climate crisis is real. It is time to act.

Those who profit from the unconstrained pollution that is the primary cause of climate change are determined to block our perception of this reality. They have help from many sides: from the private sector, which is now free to make unlimited and secret campaign contributions; from politicians who have conflated their tenures in office with the pursuit of the people's best interests; and — tragically — from the press itself, which treats deception and falsehood on the same plane as scientific fact, and calls it objective reporting of alternative opinions.

All things are not equally true. It is time to face reality. We ignored reality in the marketplace and nearly destroyed the world economic system. We are likewise ignoring reality in the environment, and the consequences could be several orders of magnitude worse. Determining what is real can be a challenge in our culture, but in order to make wise choices in the presence of such grave risks, we must use common sense and the rule of reason in coming to an agreement on what is true.

 

So how can we make it happen? How can we as individuals make a difference? In five basic ways:

First, become a committed advocate for solving the crisis. You can start with something simple: Speak up whenever the subject of climate arises. When a friend or acquaintance expresses doubt that the crisis is real, or that it's some sort of hoax, don't let the opportunity pass to put down your personal marker. The civil rights revolution may have been driven by activists who put their lives on the line, but it was partly won by average Americans who began to challenge racist comments in everyday conversations.

Second, deepen your commitment by making consumer choices that reduce energy use and reduce your impact on the environment. The demand by individuals for change in the marketplace has already led many businesses to take truly significant steps to reduce their global-warming pollution. Some of the corporate changes are more symbolic than real — "green-washing," as it's called — but a surprising amount of real progress is taking place. Walmart, to pick one example, is moving aggressively to cut its carbon footprint by 20 million metric tons, in part by pressuring its suppliers to cut down on wasteful packaging and use lower-carbon transportation alternatives. Reward those companies that are providing leadership.

Third, join an organization committed to action on this issue. The Alliance for Climate Protection (climateprotect.org), which I chair, has grassroots action plans for the summer and fall that spell out lots of ways to fight effectively for the policy changes we need. We can also enable you to host a slide show in your community on solutions to the climate crisis — presented by one of the 4,000 volunteers we have trained. Invite your friends and neighbors to come and then enlist them to join the cause.

Fourth, contact your local newspapers and television stations when they put out claptrap on climate — and let them know you're fed up with their stubborn and cowardly resistance to reporting the facts of this issue. One of the main reasons they are so wimpy and irresponsible about global warming is that they're frightened of the reaction they get from the deniers when they report the science objectively. So let them know that deniers are not the only ones in town with game. Stay on them! Don't let up! It's true that some media outlets are getting instructions from their owners on this issue, and that others are influenced by big advertisers, but many of them are surprisingly responsive to a genuine outpouring of opinion from their viewers and readers. It is way past time for the ref to do his job.

Finally, and above all, don't give up on the political system. Even though it is rigged by special interests, it is not so far gone that candidates and elected officials don't have to pay attention to persistent, engaged and committed individuals. President Franklin Roosevelt once told civil rights leaders who were pressing him for change that he agreed with them about the need for greater equality for black Americans. Then, as the story goes, he added with a wry smile, "Now go out and make me do it."

To make our elected leaders take action to solve the climate crisis, we must forcefully communicate the following message: "I care a lot about global warming; I am paying very careful attention to the way you vote and what you say about it; if you are on the wrong side, I am not only going to vote against you, I will work hard to defeat you — regardless of party. If you are on the right side, I will work hard to elect you."

Why do you think President Obama and Congress changed their game on "don't ask, don't tell?" It happened because enough Americans delivered exactly that tough message to candidates who wanted their votes. When enough people care passionately enough to drive that message home on the climate crisis, politicians will look at their hole cards, and enough of them will change their game to make all the difference we need.

This is not naive; trust me on this. It may take more individual voters to beat the Polluters and Ideologues now than it once did — when special-interest money was less dominant. But when enough people speak this way to candidates, and convince them that they are dead serious about it, change will happen — both in Congress and in the White House. As the great abolitionist leader Frederick Douglass once observed, "Power concedes nothing without a demand. It never did, and it never will."

What is now at risk in the climate debate is nothing less than our ability to communicate with one another according to a protocol that binds all participants to seek reason and evaluate facts honestly. The ability to perceive reality is a prerequisite for self-governance. Wishful thinking and denial lead to dead ends. When it works, the democratic process helps clear the way toward reality, by exposing false argumentation to the best available evidence. That is why the Constitution affords such unique protection to freedom of the press and of speech.

The climate crisis, in reality, is a struggle for the soul of America. It is about whether or not we are still capable — given the ill health of our democracy and the current dominance of wealth over reason — of perceiving important and complex realities clearly enough to promote and protect the sustainable well-being of the many. What hangs in the balance is the future of civilization as we know it.

9 Countries That Do It Better: Why Does Europe Take Better Care of Its People Than America?

AlterNet / By Joshua Holland  

The world's wealthy democracies have somewhat different priorities, leading to some very different outcomes for their citizens.

June 15, 2011  |  An abiding belief in American exceptionalism is more or less ubiquitous across the political spectrum. But in many ways, what makes America different from other advanced democracies are relatively modest differences in priorities. While all wealthy democracies share the same basic model --they derive the bulk of their economic activity from the private sector while offering some form of social safety net for those who fall through the cracks -- even slight differences in priorities can have a huge impact on the lives of their people.

Here are 9 countries that do a better job providing for their citizens than we do.

Taking Care of the Ill: France

If you have access to the best health care in the United States, then you have some of the best care in the world. But that comes with an extremely steep price, and not everyone has that kind of access.

In 2008, the U.S. spent 16 percent of its economic output on health-care and covered 85 percent of its citizens. It was the only OECD country other than Mexico and Turkey to cover less than 90 percent of its people. We have the 37th longest average life expectancy, and a recent study found that American “life expectancy has been stagnant for much of the country and is actually decreasing over much of the Southern portion of the United States.”

France, which has a health-care system ranked number one in the world by the WHO, spent 11.2 percent of its economy to cover everyone.

There are a number of drivers of health-care costs, but one statistic stands out: in the European (and European-style) economies, upwards of 70 percent of the total health-care bill is picked up by the government, meaning that people are insured in large pools with lots of bargaining clout to hold down providers' costs. In the U.S., less than half of our health care is in the public sector, resulting in a patchwork system of private insurers with much higher administrative costs. When you plug what France pays per person for health care into our own government's fiscal projections, you get balanced budgets by around 2014, which then turn into surpluses after 2040.

Collective Bargaining: France

At around 12 percent (in 2008), the United States doesn't have the lowest unionization rate among the wealthy countries. That distinction goes to France, where under 8 percent of the workforce belongs to a union.

But union membership isn't important, collective bargaining is; and around 90 percent of non-managerial French workers – union members or not -- are covered under collective bargaining agreements.

Honorable mention goes to the Scandinavian countries – with 53 percent of its workforce in a union, Norway comes in dead last among them; 68 percent of Swedes belong to a union, topping the list.

Inequality: Denmark

A large body of research shows that higher union density correlates with less inequality. The U.S. is the most unequal society among the wealthy countries – in the OECD, only three middle-income countries (Turkey, Mexico and Chile) have a more lopsided distribution of wealth.

Denmark leads the way, with the flattest distribution among the high-income countries in the OECD.

Poverty: Denmark

Inequality is a measure of how much income those at the top of the pile take in compared to what those at the bottom grab. So, in countries with equal wealth, more inequality means more poverty – the piece of the economic pie shared by those at the bottom end of the scale will be smaller by definition.

Not surprisingly, Denmark, at 5.4 percent, has the lowest poverty rate among the European-style countries.

The OECD uses a different standard of poverty than does the U.S. government. It counts anyone making less than half of the median income as living in poverty. By that standard, we are plagued with a poverty rate of over 17 percent, higher than all the OECD countries other than Mexico, Israel and Chile. (The average among OECD countries in general is 11.1 percent.)

Child Poverty: Denmark

One of the most tragic comparisons for America, among the richest countries in the world, is that more than one in five children live in poverty, as measured by the OECD (PDF). The OECD average is under 13 percent, and Denmark again comes in last, with childhood poverty at around 4 percent. (Following it are Finland, Norway, Austria and Sweden.)

Gender Gap: Italy

Because women are disproportionately represented in lower paying jobs, and people at the bottom of the wage ladder get the most benefits of union membership, high unionization rates are also correlated with lower gender pay-gaps – it's one of several factors, but it's a key one.

Italy has the second highest union rate outside of Scandinavia, and also boasts the smallest gender gap. A female worker in the middle of the pack makes just 1.3 percent less than her male counterpart in Italy. Compare that with American women, who earn more than 20 percent less than American men. (The OECD average is 16 percent, and we're not the worst – that distinction goes to Japan among the European-style economies.)

Taking Care of the Young

At 6.7 deaths per 1,000 live births, the U.S. had the highest infant mortality rate among the high-income nations in 2006. Iceland, with 1.4 deaths/ 1,000 live births, had the lowest.

Among high-income countries, only Canada spent a lower share of its economic output on family benefits, services and tax breaks than the U.S., which devoted about 1.25 percent of GDP. France, which has battled low fertility rates for years, spends almost 4 percent.

The U.S. is the only advanced country that doesn't offer paid maternity and/or paternity leave.

Sweden offers the longest paid leave – 16 months – at about 80 percent of one's income. Denmark allows the parents to divide a year off, with full pay.

Early childhood care and preschool programs confer long-lasting benefits on children who participate in them. About a third of American kids aged 3-5 were enrolled in such programs in 2008, compared with about two-thirds of kids in Denmark.

Taking Care of the Old: Luxembourg

Conservatives paint more progressive countries as being mired with chronically high unemployment. But there's a bit of sleight-of-hand at work: looking only at workers in their prime years, the U.S. has a low employment rate relative to most European countries. Ten of them -- as well as Australia, Canada and Japan – had higher employment rates for people in their prime working years.

But we work our elderly a lot harder than they do in other countries. Among those aged 55-64, over 60 percent of Americans work, compared with just 35.3 percent in Belgium.

The Social Security system in the U.S. replaces 42 percent of the median salary – only the UK is stingier among the wealthy countries (but it pays a bigger share of the wages of lower-income workers). Iceland replaces 109 percent of the earnings of someone in the middle of the economic pack; Luxembourg and the Netherlands replace about 90 percent. The OECD average is 60 percent.

Among the wealthy countries, only Norway and Iceland have a higher retirement age (67) than we do in the U.S. (66). People in Luxembourg can retire with full benefits at 57, and the Italians join them just three months later.

Taxing Corporations Versus Individuals: Luxembourg

The U.S. government collects less in taxes than the other rich countries, on average, but that doesn't tell us who pays what.

It's worth noting that the U.S. is tied for the OECD country that collects the lowest share of the economy in corporate taxes, at 1.8 percent of GDP (in 2008), or about half the group's average.

That means that more of the burden falls on individuals and households. Americans fork over more in personal income taxes than the OECD average as a result – we pay 9.9 percent while the OECD as a whole pays 9 percent.

Denmark leads the world in corporate taxes, and the Slovak Republic has the lowest personal income taxes, but the most “balanced” system (an admittedly arbitrary standard) is arguably Luxembourg's, where corporations were taxed at 5.1 percent and individuals and families at 7.7 percent in 2008.

Aren't They Taxed to Death in General?

What about the “economy-killing” taxes under which those crazy European socialists suffer? Well, in 2007 we paid 7.5 percent of our economic output less in taxes than the average of OECD countries, but citizens of the other wealthy countries got a lot more for their tax dollars than we did – free or very low-cost health care, college educations, better unemployment benefits, job training and the list goes on.

In the United States, we paid the equivalent of 8.2 percent of our economy more in social spending out of our own pockets than the people in other rich countries did that year. So the savings we enjoyed on our tax bills were more than offset by what we paid for those things our counterparts bought with their taxes. When private and public spending on our social welfare are added together, Americans pay just a little bit more than the other citizens of the world's leading economic powers.

But What About the Debt?

Perhaps these countries just ran up piles of debt in the course of taking better care of their people?

That's not the case; among the world's wealthy democracies only six – Japan, Greece, Ireland, Iceland, Belgium and Italy – had a higher ratio of debt to GDP than the United States last year.

Denmark's debt level was less than half of our own.

Much has also been made of the Europeans' supposedly slower growth and lower average incomes. It is true that over the last decade, gross domestic product grew by about 1 percentage point more annually in the United States than in the core countries of the EU-15. But when we talk about “growth,” we mean a growing population as well as increasing productivity: more people making stuff means more total stuff.

The differences in population growth between the United States and the EU are stark. Since 1980, the population of the United States has increased by more than a third, compared with 7 percent in the EU (as a whole). Adding people, however, doesn’t necessarily make countries more affluent. A better standard is the growth of GDP per person. As Paul Krugman pointed out, “Since 1980, per capita real G.D.P.—which is what matters for living standards—has risen at about the same rate in America and in the E.U. 15: 1.95 percent a year here; 1.83 percent there.” That’s essentially a rounding error.

The Wall Street Journal’s editorial board got terribly excited a few years back when a study by a right-wing think tank in Sweden “found that if Europe were part of the U.S., only tiny Luxembourg could rival the richest of the 50 American states in gross domestic product per capita.” A “rising tide still lifts all boats,” the Journal reminded us, “and U.S. GDP per capita was a whopping 32% higher than the EU average in 2000, and the gap hasn’t closed since.”

As far as the raw data go, that’s true. (But several individual European states have GDP per capita that are either higher than, or comparable to, that enjoyed in the United States.) The thing is, those data tell only part of the story about a country’s economic health. We do have different priorities, and European workers expect six to eight weeks of vacation, paid sick days, and fewer hours of overtime—Europeans simply don’t work themselves to the bone as we do. American men and women worked an average of 41 hours per week in 2005, while European men averaged 38 hours and European women only 30. As the OECD noted, “As for holiday and paid leave entitlements, the striking differences between Europe and the United States (including sickness and maternity) obviously explain some of the transatlantic gap in annual working hours.”

When you factor in the difference in time spent on the job, the income gap essentially disappears. Now, is this simply a matter of Americans’ having a superior work ethic, unblunted by the perfidy of the nanny state? Well, no. Overworked Americans are miserable. According to research cited by Boston College’s Sloan Work and Family Research Network, four in 10 workers who work a lot of extra hours say they “feel very angry toward their employers,” versus 1 percent who work only a few extra hours. Just 3 percent of two-income couples who work long hours said they were content with the effort, and nine out of 10 U.S. workers said either, “My job requires that I work very hard,” or “I never seem to have enough time to get everything done on my job.”

So, again, what we see is merely a difference in priorities.

Note: Unless linked above, all data are from the OECD's downloadable Excel files found here. A correction was made to this article after publication.

Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy: And Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America. Drop him an email,  [email protected]  or follow him on Twitter.

Our Billionaires: the Ten Wealthiest Americans

From the OB Rag, June 20, 2011

by Mail Online

Here are America’s 10 wealthiest billionaires:

No. 1. : Bill Gates

Bill Gates

Microsoft tycoon Bill Gates is worth a huge net $54 billion.

No. 2.:  Warren Buffett

Warren Buffett

Financial magnate Warren Buffet smiles as he is introduced at the Berkshire Hathaway. Chairman Warren Buffett has $45 billion to smile about.

No. 3: Larry Ellison

Larry Ellison

Larry Ellison, chief executive officer of Oracle Corp., a computer technology company, is worth $27 billion

No. 4: Christy Walton and family

Christy Walton

As the widow of John Walton, son of Wal-Mart’s founder, Christy Walton has inherited a cool $24 billion

Charles Koch

No. 5: Charles Koch

The chairman and CEO of Koch Industries, said to be the largest private company in the world, is worth $22 billion

David Koch

No. 6: David Koch

As executive vice president of Koch Industries, David trails his brother slightly, with $21.5 billion

Nos. 7 and 8: Alice and Jim Walton

The Wal-Mart siblings and heirs are each worth between $20 and $20.1 billion.

No. 9: S. Robson Walton

Jim, Alice and Rob Walton

As chairman of Wal-Mart Stores Inc., Robson’s net worth stands at $19.7 billion

No. 10: Michael Bloomberg

Michael Bloomberg

New York City’s Mayor, who also owns media company Bloomberg LP, takes home $18 billion

The Truth About the Economy

 

Call Off the Global Drug War

Published on Friday, June 17, 2011 by the Minneapolis Star Tribune

by Jimmy Carter

In an extraordinary new initiative announced earlier this month, the Global Commission on Drug Policy has made some courageous and profoundly important recommendations in a report on how to bring more effective control over the illicit drug trade.

The commission includes the former presidents or prime ministers of five countries, a former secretary general of the United Nations, human rights leaders, and business and government leaders, including Richard Branson, George P. Shultz and Paul A. Volcker.

The report describes the total failure of the present global antidrug effort, and in particular America's "war on drugs," which was declared 40 years ago today. It notes that the global consumption of opiates has increased 34.5 percent, cocaine 27 percent and cannabis 8.5 percent from 1998 to 2008.

Its primary recommendations are to substitute treatment for imprisonment for people who use drugs but do no harm to others, and to concentrate more coordinated international effort on combating violent criminal organizations rather than nonviolent, low-level offenders.

These recommendations are compatible with U.S. drug policy from three decades ago. In a message to Congress in 1977, I said the country should decriminalize the possession of less than an ounce of marijuana, with a full program of treatment for addicts.

I also cautioned against filling our prisons with young people who were no threat to society, and summarized by saying: "Penalties against possession of a drug should not be more damaging to an individual than the use of the drug itself."

These ideas were widely accepted at the time. But in the 1980s President Ronald Reagan and Congress began to shift from balanced drug policies, including the treatment and rehabilitation of addicts, toward futile efforts to control drug imports from foreign countries.

This approach entailed an enormous expenditure of resources and the dependence on police and military forces to reduce the foreign cultivation of marijuana, coca and opium poppy and the production of cocaine and heroin. One result has been a terrible escalation in drug-related violence, corruption and gross violations of human rights in a growing number of Latin American countries.

The commission's facts and arguments are persuasive. It recommends that governments be encouraged to experiment "with models of legal regulation of drugs ... that are designed to undermine the power of organized crime and safeguard the health and security of their citizens." For effective examples, they can look to policies that have shown promising results in Europe, Australia and other places.

But they probably won't turn to the U.S. for advice. Drug policies here are more punitive and counterproductive than in other democracies, and have brought about an explosion in prison populations. At the end of 1980, just before I left office, 500,000 people were incarcerated in America; at the end of 2009 the number was nearly 2.3 million.

There are 743 people in prison for every 100,000 Americans, a higher portion than in any other country and seven times as great as in Europe. Some 7.2 million people are either in prison or on probation or parole — more than 3 percent of all American adults!

Some of this increase has been caused by mandatory minimum sentencing and "three strikes you're out" laws. But about three-quarters of new admissions to state prisons are for nonviolent crimes.

And the single greatest cause of prison population growth has been the war on drugs, with the number of people incarcerated for nonviolent drug offenses increasing more than twelvefold since 1980.

Not only has this excessive punishment destroyed the lives of millions of young people and their families (disproportionately minorities), but it is wreaking havoc on state and local budgets. Former California Gov. Arnold Schwarzenegger pointed out that, in 1980, 10 percent of his state's budget went to higher education and 3 percent to prisons; in 2010, almost 11 percent went to prisons and only 7.5 percent to higher education.

Maybe the increased tax burden on wealthy citizens necessary to pay for the war on drugs will help to bring about a reform of America's drug policies. At least the recommendations of the Global Commission will give some cover to political leaders who wish to do what is right.

A few years ago I worked side by side for four months with a group of prison inmates, who were learning the building trade, to renovate some public buildings in my hometown of Plains, Ga. They were intelligent and dedicated young men, each preparing for a productive life after the completion of his sentence. More than half of them were in prison for drug-related crimes, and would have been better off in college or trade school.

To help such men remain valuable members of society, and to make drug policies more humane and more effective, the American government should support and enact the reforms laid out by the Global Commission on Drug Policy.

© 2011 Jimmy Carter

Jimmy Carter, the 39th president, is the founder of the Carter Center and the winner of the 2002 Nobel Peace Prize.

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The Bush Tax Cuts: A Decade of Economic Disaster

Published on Friday, June 17, 2011 by The Providence Journal

by William Barclay

This month marks the 10th anniversary of the first of the two tax cuts sought by President George W. Bush. The Economic Growth and Tax Relief Reconciliation Act was enacted in 2001 to be followed, in 2003, by the Jobs and Growth Tax Relief Reconciliation Act.

Ten years later, it is time we assess the actual results of these tax cuts, looking at economic performance rather than political promises. The results have been a disaster for the U.S. economy and for almost all of the American people. We have had very slow income and employment growth for the vast majority of families, an extremely unequal distribution of the direct financial benefits from these measures and very slow growth in the economy as a whole.

As a high-income person who has received these tax cuts during the past 10 years, I feel that it is my responsibility to speak out.

Supporters of tax cuts for high-income households, such as House Speaker John Boehner (R.-Ohio), argue that rich people are the “job creators” and that tax cuts encourage them to create jobs and that these new jobs, in turn, increase employment opportunities and improve the wages of the rest of the population.

Did any of these benefits occur after the Bush tax cuts? The quick and accurate answer is, no, they did not. Adjusted for inflation, the median weekly earnings of working Americans actually fell 2.3 percent from the end of the 2000-01 recession to the onset of the Great Recession. This is unique in the post World War II period.

Further, the recovery from the 2000-01 recession was the slowest of any post World War II recession to date, requiring 39 months before the number of employed Americans reached the pre-recession level. Where is even a scintilla of evidence that tax cuts such as those passed in 2001 and 2003 generate income and employment growth for the vast majority of the population?

A significant part of the failure of the Bush tax cuts to generate jobs and income growth flows from the top-heavy distribution of the benefits conveyed by these measures. The vast bulk of the reduced taxes were reaped by a very small number of families. In 2011, the average tax reduction to families receiving an income of $1 million or more (about 321,000 families) will be $139,199.

For this less than 0.5 percent of all families this is a total reduction in taxes of $860 million/week. Compare these tax benefits with the yearly savings proposed by cutting the Women, Infants and Children (WIC) health and nutrition program: $833 million. An obvious question is, why can’t this very small group of very high-income families give up just one week of their tax cut to provide nutrition for the tens of thousands of women and children that benefit from the WIC program?

More significantly, in light of the deficit hysteria gripping Washington, D.C., the combined impact of the 2001 and 2003 Bush tax cuts has been the addition of more than $2.6 trillion to the federal debt. This included more than $400 billion in interest payments on the debt necessary to pay for the cuts.

Of course, one might forgive these policy failures if the promise of economic growth had been fulfilled. On this measure, however, the record is even worse.

The 2000-01 recession ended in the fourth quarter of 2001, just in time for the first Bush tax cut to take effect. From the end of the recession until the onset of the Great Recession, the economy grew at a slower rate than in any other post recession period since World War II. Thus, despite promises from the advocates of the tax cuts, the reality was slower growth rather than faster growth. The additional tax cut in 2003 did nothing to increase the pace of economic growth.

In sum, the Bush tax cuts were a bad idea at the time and are an even worse idea today. Ending these cuts for incomes over $250,000 would generate over $100 billion a year in additional revenue. If we also created additional tax rates for very high-income families (e.g., at $500,000, $1 million, $5 million and $10 million) we could increase federal revenue by more than double that amount and put ourselves on the road to reducing deficits and debts.

© 2011 William Barclay

William Barclay worked for 22 years in financial services before retiring from that sector, and the Chicago Stock Exchange, in 2004. He is now an adjunct professor at the University of Illinois at Chicago’s Liautaud Graduate School of Business and is a member of Wealth for the Common Good.

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Excessive Oil Speculation: Wall Street's Tax on Us

Published on Friday, June 17, 2011 by CommonDreams.org

by Robert Weissman

Where are the anti-tax activists when you need them?

They should be protesting outside of the Commodity Futures Trading Commission, denouncing the agency for failing to take action. And they should be applauding a new legislative proposal by Senator Bernie Sanders.

Right now, Wall Street speculators are imposing an enormous tax on consumers, and the overall economy.

Where are the anti-tax activists?

There's no question that illegal, collusive activity is far too frequent in energy markets. But the much bigger problem is legal speculation.

Wall Street speculation in oil and energy markets is jacking up the price of oil, and thereby siphoning money from the pockets and pocketbooks of consumers.

Even Goldman Sachs suggests that legal speculation may be adding 65-70 cents to the price of a gallon of gasoline. Exxon CEO Rex Tillerson says supply-and-demand fundamentals suggest the price of oil should be $65-$70 a barrel, about a third less than the current price. Experts from the home heating oil industry believe even the $65 figure is too high.

The speculation component of the price of gasoline is exactly like a tax on consumers.

Except that it is the worst kind of tax imaginable.

A government imposed-tax on oil or carbon would go to the U.S. Treasury, for use to advance public purposes, such as investing in renewable energy and energy efficiency. By contrast, the proceeds of this Wall Street-imposed tax are going to Wall Street interests, giant oil companies and foreign oil interests. Wall Street gamblers are benefiting from the higher prices in oil markets. The higher prices of oil -- which have nothing to do with the cost of drilling or refining -- are driving Big Oil's profits to the stratosphere. The formula for success for Exxon, Chevron, BP and the rest is simple: keep costs constant and reap the profits from prices driven higher by oil speculators. Foreign oil interests get the same benefits -- at the expense of worsening the U.S. trade deficit.

The Wall Street-imposed tax is regressive, with working families hit the hardest.

And the unpredictability and impermanence of this Wall Street-imposed tax means that -- while it imposes costs on consumers and the economy -- it does not do much to shift consumer and business decisions. There is a strong case to be made for putting a price on carbon, to encourage consumer and business investments in efficiency and renewable energy technologies. But the Wall Street-imposed tax does little to achieve these objectives. The tax is temporary -- at some point, speculators will race out of the market, driving prices back down -- so it does not send a clear price signal to consumers and businesses to redirect investments to efficiency and renewables.

We, the People are not helpless in the face of this legalized rip-off. We can crack down on out-of-control legal speculation.

The Wall Street Reform and Consumer Protection Act -- the Dodd-Frank Act -- directed the Commodity Futures Trading Commission (CFTC) to enact "position limits" to eliminate excessive speculation in energy markets. Such a rule would limit the amount of oil that Wall Street speculators could trade in the energy futures market, taking control over the oil futures market away from speculators and returning it to those who actually use and supply oil. But under pressure from Wall Street and its allies, the CFTC has failed to act by the mid-January deadline it was given.

To force immediate action, Senator Bernie Sanders -- along with Senators Blumenthal, Merkley, Franken, Whitehouse and Bill Nelson -- earlier this week introduced the End Excessive Oil Speculation Now Act. It would mandate immediate action by the CFTC to end the Wall Street-imposed oil tax. The legislation would end Wall Street's authority to rip off consumers via a privately imposed tax.

Ending the Wall Street-imposed tax would save Americans tens of billions of dollars. But for political opposition from obvious sources, this legislation would win immediate passage.

Where are the anti-tax activists?

© 2011 Robert Weissman

Robert Weissman is the president of Public Citizen.

 

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AARP Tells Members They Won't Fight Social Security Benefit Cuts

Published on Friday, June 17, 2011 by CommonDreams.org

by Roger Hickey

The front page of today's Wall Street Journal features an article [Key Seniors Association Pivots on Benefit Cut] reporting that AARP "is dropping its longstanding opposition to cutting Social Security benefits." The piece is based on a conversation with AARP policy director John Rother. This is a big deal - not because AARP was ever such a strong force against proposed benefit cuts (other groups are doing that much more effectively), but because the mainstream media is now full of headlines like this from ABC News: AARP Appears to Switch Stance on Social Security Cuts and this column by David Von Drehle, from Time Online: Victory! The Grey Goliath Gives Way on Social Security.

AARP members across the country are outraged. Some are burning their membership cards. The timing of this front page story couldn't be worse. Conservatives have fixated Congress and the White House on deficits and spending cuts that will kill jobs -- even though most Americans care more about jobs than deficits. Most Americans were heartened when Paul Ryan's plan for dismantling Medicare was decisively rejected by the very Republican voters of New York's 26th Congressional District - after Ryan got almost every Republican in the Congress to vote for it. Democrats were starting to re-learn how to campaign as defenders of Medicare and Social Security. And now this - from a top level AARP leader - a real momentum killer.

Now, this obviously well-planned article in the Wall Street Journal, timed just as Joe Biden's deficit reduction talks are moving to "the difficult stuff," gives aid and comfort to conservatives and New Democrats who are on a jihad to make Social Security cuts a focus of deficit reduction - even though America's largest retirement program has its own source of funding and can't contribute to the deficit.

It is well-known that Obama administration officials would like to have a deal on Social Security which changes the index by which benefits are raised each year (a big benefit cut) and which raises the retirement age (another big benefit cut) and also the lifts the cap which limits the percentage of their income that richer people pay in Social Security taxes (a revenue increase). So far, that's been a non-starter with Republicans, who can't support tax increases on the wealthy. But with the press now trumpeting AARP's dramatic move toward benefit cuts, Republicans might come under pressure to make a deal. The irony here would be the White House using the AARP to leverage a deal that cuts benefits - while doing nothing to reduce the federal deficit! Their answer if they could pull this off: It will reassure the bond markets.

This just in: The AARP has just issued a statement by their CEO, A. Barry Rand, entitled AARP Has Not Changed Its Position on Social Security. In it, Rand calls the WSJ piece inaccurate and misleading, but doesn't clarify what they think was inaccurate.

In the Journal article, John Rother was clear that he's willing to support SS benefit cuts. AARP in its statement just reiterates its commitment to "solvency" of the program. I believe SS can be made solvent without benefit cuts. John Rother disagrees. Where does the AARP as the largest organization claiming to represent seniors stand? They are not clear.

The AARP statement claims to oppose including Social Security in the deficit discussions. If they really mean that, the group that promotes itself as the most powerful defender of seniors in America should get their vaunted citizen's lobby in gear - to make sure Social Security doesn't become the sacrificial lamb of this dangerous season of budget cutting blood on the floor.

Baby boomers are now beginning to retire - and we have many fewer retirement assets (no pensions, devastated savings, unconventional work histories) - and we are going to depend on Social Security even more than previous generations. We know we didn't join for the movie discounts. If we can't depend on AARP to fight for decent Social Security benefits, maybe we need a more activist organization that will.

Roger Hickey is Co-Director of the Campaign for America’s Future. He was a leader of the campaign to stop the privatization of Social Security, and he is a founder and member of the steering committee of Health Care for America Now. In the late 1980s he and Jeff Faux created the Economic Policy Institute.

Obama Pinned Down Like Gulliver by the Lilliputians on Job Creation

by John Lawrence

The Republicans have Obama exactly where they want him: a failing economy with no chance for any significant job creation program. Why isn't there any chance for a job creation program? Because Republicans control the House and have veto power in the Senate. Obama would just be spinning his wheels even to suggest one. What he could do is to take an ideological stand decrying supply side economics, tax cutting and deregulation for the failures they are, but that would just turn off his campaign donors who are the same ones who supply Republicans with cash so why even bother. So Obama is fenced into a corner hoping that the economy will recover on its own when all indicators are that it won't.

There are two main things that are tanking the economy: joblessness and the continued erosion of the real estate market caused by record numbers of foreclosures. In fact the housing market is worse than the Great Depression in terms of the reduction in value of houses. And there is no upturn in sight. Obama should have made the HAMP (Home Affordable Modification Program) program mandatory instead of leaving it up to the discretion of the banks whether or not to make mortgage adjustments in order to keep people in their houses. Now it's too late. Another mistake Obama made was to make a bargain with Republicans to extend the Bush tax cuts for two years while extending unemployment benefits for only one. Now starting in 2012 the rich will still be enjoying their extended tax cuts while the unemployed will fall off the rolls creating even more misery among the populace just as the campaign season begins. Obama's goose is essentially cooked. He doesn't have any room to operate. He's tied down with the Republicans playing the roll the Lilliputians played with Gulliver.

What Obama could do even at this late date is to say the hell with it and come out and take a strong ideological stand which is opposed to the Republican tax cutting, deregulation small government nonsense. He could devote himself to educating the American people even though he's not in a position to do anything about their plight. The country needs to understand that the Democrats represent a clear choice in contradistinction to the Republican ideology. That clear choice is that the government should be the employer of last resort. The clear choice is that deficit reduction should mean not only spending cuts but revenue increases. The clear choice is that corporations should be regulated. Revenue increases mean more taxes on the wealthy and corporations, closing loopholes, a financial transaction tax and above all elimination of the Bush tax cuts on the wealthy. At least Obama has pledged to end the Bush tax cuts in 2013. Too bad he probably won't be in office to see it. By the time they end he will have lost the election.

The die has been cast. Obama chose to have economic advisors that represented Wall Street instead of the Robert Reichs and Paul Krugmans of the world. He chose to be Republican "lite" instead of representing a clear ideology on the left. He placed his bet that the economy would recover on its own. If it had, he would be sitting pretty for next year's election. At this point the best we can hope for is that Democrats will retake the House and hold onto the Senate. This will ensure four more years of gridlock as a Republican President would veto any constructive job creation legislation, but at least Medicare and Social Security will be safe. Meanwhile, the economy will continue to deteriorate as lobbyists chip away at whatever constructive legislation the Democrats passed during Obama's first two years in office. Case in point: the banking regulation that demanded that the Commodity Futures Trading Commission (CFTC) put position limits on commodity speculation by January 2011. What has the CFTC done in fact? Nothing. It has completely ignored this mandate citing its need to further "study" the situation. The result is that speculators have added $30 - $40 to the price of a barrel of oil and consumers are paying a dollar or more per gallon of gas at the pump. Senator Bernie Sanders has recently sponsored legislation that would order them to put the position limits in place, but c'mon Bernie, do you think it will really pass in the Republican controlled House? Bernie Sanders, God bless him, is whistling Dixie past the graveyard.

The best the Democrats can do at this point is to take a strong ideological stand against the Republicans in an attempt to educate the American people even though they don't have much of a prayer of getting any meaningful legislation passed in the near future. Why don't they do it? Why don't they support the middle class "awakening" in Wisconsin where there is a movement to recall state Senators who supported Governor Walker's union busting policies? There's nary a mention of this budding movement from the White House or Halls of Congress. Again they don't want to turn off their campaign donors. Remember that Obama's largest campaign donor in 2008 was Goldman Sachs. There are only a few honest voices crying out in the wilderness like Dennis Kucinich, Anthony Weiner and Bernie Sanders, and they will be eliminated by one means or another as Weiner recently has. Kucinich is in the process of being redistricted out of his safe constituency.

The net result of the antediluvian, archaic and gridlocked system of government known as the US Constitution is that more efficient and singleminded nations are going to eat our lunch until it is plain and obvious to all that the US is clearly not any longer a superpower. All Obama's brave talk about winning the future, investing in education and high speed rail is only a lot of hot air. The future is what is happening in Wisconsin, Michigan, Ohio, Texas and Florida where ideological Republicans are snuffing out unions and balancing their budgets on the backs of the poor and middle class. A Republican controlled Federal Government will only serve to make those state policies into national policies and end democracy as we know it. Money will rule absolutely, and the middle class will wake up some day and realize that they have been transformed into a bunch of serfs fighting for a place on a freeway exit in which to hold up their sign which says "Will Work for Food.".

The Growing Desperation of the Don’t-Raise-Taxes-on-the-Rich Crowd

by Robert Reich

Thursday, June 16, 2011

The much-vaunted Republican pledge not to raise any taxes is crumbling. Today 34 Senate Republicans voted to end the special tax breaks for ethanol.

According to no-tax-increase purists like Grover Norquist, this is tantamount to a tax increase.

The truth is, Republicans are divided between those who want to bring down the budget deficit and those who want to shrink government. Ending a special tax subsidy helps reduce the deficit but doesn’t necessarily shrink government. That’s why Norquist and his followers have insisted any such tax increase – including even the closing of tax loopholes – be directly linked to a corresponding tax cut.

In order to save face on today’s vote, Norquist says renegade Republicans will still be considered to have adhered to the pledge if they vote in favor of an amendment offered by Senator Jim DeMint to eliminate the estate tax. Talk about grasping at straws. DeMint’s amendment isn’t even up for a vote.

In short, the no-tax pledge is evaporating in the fresh air of reality.

What are anti-tax Republicans to do now?

For one, continue to distort the arguments of those who believe corporations and the rich should pay more taxes.

For example, in the lead op-ed piece in today’s Wall Street Journal, Cato Institute fellow Alan Reynolds claims a higher marginal tax on the super rich will bring in less revenue.

Reynolds uses my tax proposal from last February as his red herring. “Memo to Robert Reich,” he declares, “The income tax brought in less revenue when the highest rate was 70 percent to 91 percent [between 1950 and 1980] than it did when the highest rate was 28 percent.”

Reynolds bends the facts to make his case, picking and choosing among years.

In truth, the most important variable explaining the rise and fall of tax revenues as percent of GDP has been the business cycle, not the effective tax rate. In periods when the economy is growing briskly, tax revenues have risen as a percent of GDP, regardless of effective rates; in downturns, revenues have fallen.

Reynolds also distorts my proposal, implying that the bracket on which I call for a 70 percent tax is the same as in today’s tax code. Wrong. My proposed 70 percent rate would apply only to incomes over $15 million.

$15 million, Alan!

Under my proposal, incomes between $5 million and $15 million would be subjected to a 60 percent rate, and incomes between $500,000 and $5 million to a 50 percent rate.

Importantly, my proposal calls for a substantial rate reduction for families with incomes under $100,000. (Conveniently, Reynolds fails to mention this.)

Reynolds entirely ignores my central argument, which is that rather than depress economic growth, higher taxes on the rich correlate with higher growth. During almost three decades spanning 1951 to 1980, when the top rate was between 70 percent and 91 percent, average annual growth in the American economy was 3.7 percent.

Between 1983 and the start of the Great Recession, when the top rate dropped to between 35 percent and 39 percent, average growth was 3 percent.

How to explain this? Easy.

Since the early 1980s, a larger and larger share of total income has gone to the top (the richest 1 percent of Americans got 10 percent of total income in 1980, and get over 20 percent now). That’s left the vast middle class with insufficient purchasing power to boost the economy – without going deep into debt.

Lower tax rates on the rich — including lower capital gains rates — have exacerbated this regressive trend.

Finally, having misread the facts, distorted my proposal, and ignored my argument, Reynolds fails to rebut my conclusion that raising middle class purchasing power by lowering their tax rates while raising the rates at the top will help spur growth, to the benefit of all. Top earners will do better with a smaller share of a more rapidly- growing economy than a larger share of a slower-growing one.

If I were a cynic, I’d say the Republican right is showing signs of desperation.

Of Snake Oil, Puff Balls, and the Need for a Real Jobs Plan from the President

by Robert Reich

Monday, June 13, 2011

Today the President met with business leaders on his “jobs and competitiveness council,” who suggested more public-private partnerships to train workers, less government red-tape in obtaining permits, and more jobs in travel and tourism, among other things. The President then toured a manufacturing plant in North Carolina, and made an eloquent speech about the need for more jobs.

Fluff.

Doesn’t the White House get it? The President has to have a bold jobs plan, with specifics. Why not exempt the first $20,000 of income from payroll taxes for the next year? Why not a new WPA for the long-term unemployed, and a Civilian Conservation Corps for the legions of young jobless Americans? Why not allow people to declare bankruptcy on their primary residences, and thereby reorganize their mortgage debt?

Or a hundred other ways to boost demand.

Fluff won’t get us anywhere. In fact, it creates a policy vacuum that will be filled by Republicans intent on convincing Americans that cutting federal spending and reducing taxes on the rich will create jobs.

Most Americans are smart enough to see through this. But if the Republican snake oil is the only remedy being offered, some people will buy it. And if the President and Democrats on Capitol Hill continue to obsess about reaching an agreement to raise the debt limit, they risk making the snake oil seem like a legitimate cure.

The puff balls being offered by the CEOs on the President’s jobs and competitiveness council are hardly a substitute. These CEOs won’t suggest hard-ball ideas to boost demand. Why should they? Their companies rely less and less on consumers in the United States – and, for that matter, on American workers. For several years now, these companies’ foreign sales have been growing faster than their US sales and they’ve been creating more jobs abroad than here.

Consider GE, whose Chairman and CEO, Jeffrey Immelt, is also the chairman of the President’s jobs council. By the end of last year, 54 percent of GE’s 287,000 employees worked outside the United States. That’s a turnaround from as recently as 2005, when a majority of the firm’s workers were still located in the United States.

GE and the other companies represented on the President’s jobs council will continue to do fine regardless of shriveled demand in the United States. But unless demand is boosted here, American workers will continue to be hard hit.

If the choice is between Republican snake oil and the puff balls of the President’s job’s council, America will be in deeper and deeper trouble. So will the President.

The Swamp of Washington and the Morass of the Economy

by Robert Reich

Sunday, June 12, 2011

Washington was built on a swamp. In the summer, temperatures can reach over 100 degrees — as they did over the last few days when I made the rounds of Washington Democrats, repeatedly asking why no bold jobs plan is emerging. 

Here’s a sample of their responses:

“Dead in the water. We’ll be lucky if we get votes to raise the debt ceiling without major spending cuts this year and next.”

“Are you kidding? It’s all budget deficit, budget deficit, budget deficit. Nobody’s thinking about anything else.”

“Republicans beat us up so bad over the first stimulus there’s no way we’re gonna try for a second.”

“We got them [Republicans] cornered on Medicare. Now they want to change the subject to jobs. Forget it.”

“No need. We’ll see job growth in the second half of the year.”

“The President doesn’t want to put anything on the table he can’t get through Congress.”

And so it went. Not a shred of urgency.

This morning I was on ABC’s “This Week,” debating jobs and the economy with Republican Senator Richard Shelby of Alabama. Shelby restated the standard Republican playbook of spending cuts and tax cuts (except for one instant when he inadvertently conceded America emerged from the Great Depression only when government spent big time mobilizing the nation for World War II).

But what struck me most was the similarity between Shelby’s overall attitude and that of the Democrats I talked with — a kind of shrug of the shoulders, a sense that it’s really not all that bad out there, and that nothing can be done anyway. (In the green room, before going on, Shelby told me employment in northern Alabama was actually fairly good and the problem was near the coast.)

The recovery is stalling across the nation yet in the Washington swamp it’s business as usual. 

Americans are scared, with reason. We’re in a vicious cycle in which lower wages and net job losses and high debt are causing consumers to cut their spending — which is causing businesses to cut back on hiring and reduce pay. There’s no way out of this morass without bold leadership from Washington to rekindle consumer demand. 

If the Democrats remain silent, the vacuum will be filled by the Republican snake oil of federal spending cuts and cut taxes on big corporations and the wealthy. Democrats — starting with the President — must have the courage and conviction to tell the nation the recovery is stalling, and what must be done.

The Stalled Recovery, Smoke and Mirrors, and the Carnage on the Street

by Robert Reich

Friday, June 10, 2011

The Dow ended the week below 12,000 for the first time since March. This is the sixth straight week of downs for the Dow. It’s almost as bad over at the Nasdaq. All the gains racked up in 2011 have now been erased.

What’s going on?

The real economy is catching up with the financial economy, as it always does eventually. Wall Street is built on smoke and mirrors, while the real economy is based on jobs and wages. Smoke and mirrors can only take you so far – as we learned so painfully three years ago.

Jobs and wages stink, if you haven’t noticed. They’ve been bad for months, even before this week’s data made it fairly clear the recovery has stalled.

Stock prices had been rising nonetheless. That was partly because big corporations were enjoying big sales and fat profits from their foreign operations. But foreign sales are slowing. Chalk that up to the European debt crisis, Europe’s insane austerity measures, Japan’s tragedy, and China’s concerns about inflation.

Meanwhile, other companies have been busy restocking inventories in the hope American consumers will be in a mood to buy. But that hope is coming to an end, as the reality dawns that American consumers can’t and won’t buy very much, given their shrinking home values, high debts, and job worries.

Stock prices were also rising because of Wall Street’s certitude that it can make loads of money from the gullibility of millions of small investors. Here’s where the smoke and mirrors come in.

Over the past year, the Street lured small investors back into the market on the smokey promises that the worst is over and stock prices are bound to rise. The lure became a self-fulfilling prophesy. As investors re-entered the market, they bid up stock prices. Hence, the mirror.

Insiders on the Street are always the first to bail when they sense they’ve been overselling, as they started to do a few weeks ago. This gives them a second opportunity to make money off small investors — by selling short.

The nation’s second-largest financial redistribution in history (the largest, on a percentage basis, occurred in 1929) came in 2007 and 2008 – from small investors and their pension funds to the Street’s savvy traders who shorted them. Now it’s been repeated, although on a smaller scale.

And Washington? Completely clueless. Our representatives in the nation’s capital continue to obsess about future budget deficits and games of chicken over raising the debt ceiling — neither of which has anything at all to do with the stalled recovery and the carnage on the Street.

Otherwise, the airwaves are filled with Weiner’s tweets, Gingrich’s implosion, and Palin’s emails. When times are tough we look for entertainment.

Why the President Must Come Up With Demand-Side Solutions, And Not Go Over to the Supply Side

by Robert Reich

Thursday, June 9, 2011

“I am concerned about the fact that the recovery that we’re on is not producing jobs as fast as I want it to happen,” President Obama said Tuesday, amid the flood of bad economic news, including last Friday’s alarming jobs report.
 
Does this mean we’re about to see a bold package of ideas from the White House for spurring growth of jobs and wages? Sadly, it doesn’t seem so.
 
Obama says he’s interested in exploring with Republicans extending some of the measures that were part of last year’s tax-cut package “to make sure that we get this recovery up and running in a robust way.”
 
Accordingly, the White House is mulling a temporary cut in the payroll taxes businesses pay on wages. White House advisors figure this may appeal to Republican lawmakers who have been discussing the same idea. It would, in essence, match the 2 percent reduction in employee contributions to payroll taxes this year, enacted as part of the deal to extend the Bush tax cuts.
 
Other ideas under consideration at the White House include a corporate tax cut, accompanied by the closing of some corporate tax loopholes.
 
Can we get real for a moment? Businesses don’t need more financial incentives. They’re already sitting on a vast cash hoard estimated to be upwards of $1.9 trillion. Besides, large and middle-sized companies are having no difficulty getting loans at bargain-basement rates, courtesy of the Fed.
 
In consequence, businesses are already spending as much as they can justify economically. Almost two-thirds of the measly growth in the economy so far this year has come from businesses rebuilding their inventories. But without more consumer spending, businesses won’t spend more. A robust economy can’t be built on inventory replacements.
 
The problem isn’t on the supply side. It’s on the demand side. Businesses are reluctant to spend more and create more jobs because there aren’t enough consumers out there able and willing to buy what businesses have to sell.
 
The reason consumers aren’t buying is consumers’ paychecks are dropping, adjusted for inflation. And job losses are mounting. The 83,000 new private-sector jobs created in May represent a net loss because 125,000 jobs are needed merely to keep up with an expanding labor force. The number of Americans filing new claims for unemployment benefits edged higher last week.
 
At the same time, many Americans are falling behind in their mortgage payments. And housing prices continue to drop – making homeowners feel even poorer.
 
Close to 60 percent of the half-trillion drop in household debt since the depth of recession has been defaults rather than repayments. This makes it harder for people who’d like to enter the housing market to get new mortgage loans, or for anyone to refinance.  Other consumer debt burdens are rising. On Tuesday the Fed reported consumer credit outstanding rose in April – mostly from record-high levels of student-loan debt and an up-tick in credit-card borrowing due to food and gas price increases outpacing wage gains.
 
All this translates into a continuing crisis on the demand side. Consumers can’t and won’t buy more. Between January and March, sales grew just .15 percent around the country – perilously close to no growth at all. May sales look even worse. Chain stores are reporting weaker sales. Consumer confidence has dropped sharply.
 
How to get jobs back, then? By reigniting demand. Put more money in consumers’ pockets and help them renegotiate their mortgage loans.
 
For example: Enlarge the payroll tax break for workers — not just for employers. Exempt the first $20,000 of income from payroll taxes for a year. Create a WPA for the long-term unemployed. Allow distressed homeowners to declare bankruptcy on their primary residence, thereby giving them more clout with lenders to reorganize their mortgage loans. Lend federal money to (rather than bail out) states and cities that are now firing platoons of teachers, fire fighters, and other workers because state and local coffers are empty.
 
But we’re not hearing any of these sorts of demand-side solutions from the White House. In seeking Republican votes, Obama is putting forth Republican supply-side ideas – lowering the employer costs of hiring, cutting corporate taxes – that have nothing to do with this demand-side crisis. He may attract some Republican votes for these, but what’s the point if they’re irrelevant to the real problem?
 
The President’s putative embrace of the false notion that businesses need more financial incentives in order to hire also risks giving legitimacy to other Republican supply-side nostrums being pushed by House Republicans and GOP presidential aspirants. On Tuesday, Tim Pawlenty called for lower taxes on corporations (down to 15 percent from the current 35 percent), and lower taxes on the rich (to 25 percent from the current 35). Newt Gingirch wants to lower corperate income taxes to 12.5 percent and eliminate the estate tax altogether. And so on.

The President should advance ideas that work, and go to battle for them. 

Supply-side economics doesn’t work. It’s been tried for thirty years, to no avail. And now, when our continuing economic crisis is so palpably being driven by inadequate demand, it’s more bogus than ever.
 
The last thing we need is for the President to go over to the supply side.

Why Washington Isn’t Doing Squat About Jobs and Wages

by Robert Reich

  Saturday, June 4, 2011

The silence is deafening. While the rest of the nation is heading back toward a double dip, Washington continues to obsess about future budget deficits. Why?

Republicans don’t want to do anything about jobs and wages. They’re so intent on unseating Obama they’d like the economy to remain in the dumps through Election Day. They also see the lousy economy as an opportunity to sell Americans their big lie that government spending is the culprit — and jobs will return if spending is cut and government shrinks.

Democrats, meanwhile, don’t want to admit the recovery has stalled.  They worry such talk will further undermine consumer confidence or spook the bond market. They don’t want to head into the election year sounding downbeat. And they don’t think they have the votes for anything that will have much effect before Election Day anyway. 

But there’s a third reason for Washington’s inaction. It’s not being talked about — which is itself evidence of the problem.

The unemployed are politically invisible. They don’t make major campaign donations. They don’t lobby Congress. There’s no National Association of Unemployed People.

Their ranks are filled with women who had been public employees, single mothers, minorities, young people trying to enter the labor force, and middle-aged men who have been out of work for longer than six months. You couldn’t find a collection of people with less political clout.

Women who had been teachers, public health professionals and social workers have been hit hard. These jobs continue to be slashed by state and local governments. Public schools alone accounted for nearly 40% of the nation’s total public sector job losses in the last year. From March 2010 to March 2011, women lost 214,000 public sector jobs, compared with a loss of 115,000 public jobs by men.

Unmarried mothers are having a particularly difficult time getting back jobs because their work was heavily concentrated in the retail, restaurant and hotel sectors. Many of these jobs disappeared when consumers reduced their discretionary spending, and they won’t come back in force until consumers start spending more again.

According to a new report by the California Budget Project, the recession erased more than half the jobs single mothers in California had gained from 1992 to 2002. The result has been a drop in the share of unmarried mothers in jobs, from 69.2% in 2007 to 58.8% in 2010. Unmarried mothers who still have jobs are working fewer hours per week than before.

Blacks also continue to be hard hit. Their unemployment rate here in California reached 20% this past March, up 5% from a year ago. That’s more than double their rate before the downturn. Some of this is because of the comparatively low education levels of many blacks, and their weak connections to the labor market. Some is due to employer discrimination. Blacks were among the last hired before the recession and therefore among the first to be let go in the downturn. That means they’ll be among the last hired as the economy recovers.

Many young people who have never been in the job market are unable to land a first job. Employers with a pick of applicants see no reason to hire someone without a track record, particularly those without much education. Unemployment among high school dropouts is hovering around 30%. Even recent college graduates are having a much harder time than usual finding a job. Many are settling for jobs that don’t ordinarily require college degrees, which pushes those with less education even further back in the line.

Older workers who have lost their jobs are at the greatest risk of continued unemployment. Employers assume they aren’t as qualified or reliable as those who are younger and have been working more recently. According to research by the Urban Institute, once you’re laid off, your chance of finding another job within a year is 36% if you’re under the age of 34. But your odds drop the older you get. If you’re jobless and in your 50s, your chance of landing another job within the year is only 24%. Over 62, you’ve got only an 18% chance.

What do these jobless have in common? They lack the political connections and organizations to get the ears of politicians, and demand policies to spur job growth.

Acampada Sol: Spain’s Call for Economic Democracy

27 May 2011 :: J.E. Robertson from cafe Sentido

In Spain’s capital, Madrid, in the heart of the city, at the Puerta del Sol, from which major roads radiate out toward all corners of the country, thousands of protesters, of all ages and social classes, young and old, have set up camp, literally, in what is now a Europe-wide demand for economic democracy. The protesters and “participantes” include not only young and old, students, post-grads and laborers, but also those who work and those who cannot find work.

Spain, at present, is suffering an astonishing 45% rate of unemployment among young people, principally those between the ages of 18 and 25. Many of them blame the ruling class and the generation that holds power for setting up an economic and political system they say is rigged against their interests. But the movement has spread far beyond the young and the unemployed.

Many of the those who attend the protests, and some who camp in Puerta del Sol, are fully employed, and spend their days working and their evenings and mornings protesting. The movement is best described as a peaceful grassroots uprising, demanding full “economic democracy”, a term that is often heard circulating among those gathered in the square and at the “assemblies” (asambleas) that form around specific issues.

There are meetings, or asambleas, to debate the specifics of a given political or economic issue, and out of those asambleas, a ground-up democratic process forms “commissions” (comisiones), which then help to organize the process of debate and the exchange of ideas, regarding that specific issue. Some of the comisiones in the square have a practical on-the-ground function relating to keeping the encampment functioning.

There are comisiones for food, energy, legal issues, communications and outreach, and there are tables that are set up to take down people’s ideas and suggestions. Donations of food and clothes have been brought in to make it possible for the (mostly young) people who are camping overnight in the square to stay there and keep the footprint of the movement visible.

A public address system announces when one of the asambleas is about to form, in a certain part of the square, so that people can attend or join the debate, and have their say. The movement has spread to villages and cities across Spain, and a coordinated effort to formulate parallel local and “global” strategies and platform positions, is ongoing.

An online campaign, involving multiple different websites, Facebook groups, Twitter accounts, and hashtag discussions, is helping to give material shape to the spontaneously formed, “people power” revolution. Protests are now being staged in Athens, in Paris, in London, and across Europe, with the demand for prosecution of financial felons, and political reforms oriented toward fairness and toward honoring the voice of the people.

In Puerta del Sol, one of the initiatives being considered would require a referendum to approve any new binding economic agreements that would affect people living in Spain, one of its autonomous regions, provinces or cities, to ensure that narrow economic interests don’t impose the structures that benefit them on a populace, to the detriment of democracy. Specifics of the initiative are under consideration, including the frequency and manner in which such referenda would be staged.

The movement in Spain is clearly rooted in the energy, methodology and ideas of similar actions taken in Tunisia, in Cairo, and in Madison, Wisconsin, to protest against misuse of government power, the purchasing of political influence and the suppression of fundamental rights for citizens.

Why the Republican War on Workers’ Rights Undermines the American Economy

Published on Wednesday, June 15, 2011 by RobertReich.org

by Robert Reich

The battle has resumed in Wisconsin. The state supreme court has allowed Governor Scott Walker to strip bargaining rights from state workers.

Meanwhile, governors and legislators in New Hampshire and Missouri are attacking private unions, seeking to make the states so-called “open shop” where workers can get all the benefits of being union members without paying union dues. Needless to say this ploy undermines the capacity of unions to do much of anything. Other Republican governors and legislatures are following suit.

Republicans in Congress are taking aim at the National Labor Relations Board, which issued a relatively minor rule change allowing workers to vote on whether to unionize soon after a union has been proposed, rather than allowing employers to delay the vote for years. Many employers have used the delaying tactics to retaliate against workers who try to organize, and intimidate others into rejecting a union.

This war on workers’ rights is an assault on the middle class, and it is undermining the American economy.

The American economy can’t get out of neutral until American workers have more money in their pockets to buy what they produce. And unions are the best way to give them the bargaining power to get better pay.

For three decades after World War II – I call it the “Great Prosperity” – wages rose in tandem with productivity. Americans shared the gains of growth, and had enough money to buy what they produced.

That’s largely due to the role of labor unions. In 1955, over a third of American workers in the private sector were unionized. Today, fewer than 7 percent are.

With the decline of unions came the stagnation of American wages. More and more of the total income and wealth of America has gone to the very top. Middle-class purchasing power depended on mothers going into paid work, everyone working longer hours, and, finally, the middle class going deep into debt, using their homes as collateral.

But now all these coping mechanisms are exhausted — and we’re living with the consequence.

Some say the Great Prosperity was an anomaly. America’s major competitors lay in ruins. We had the world to ourselves. According to this view, there’s no going back.

But this view is wrong. If you want to see the same basic bargain we had then, take a look at Germany now.

Germany is growing much faster than the United States. Its unemployment rate is now only 6.1 percent (we’re now at 9.1 percent).

What’s Germany’s secret? In sharp contrast to the decades of stagnant wages in America, real average hourly pay has risen almost 30 percent there since 1985. Germany has been investing substantially in education and infrastructure.

How did German workers do it? A big part of the story is German labor unions are still powerful enough to insist that German workers get their fair share of the economy’s gains.

That’s why pay at the top in Germany hasn’t risen any faster than pay in the middle. As David Leonhardt reported in the New York Times recently, the top 1 percent of German households earns about 11 percent of all income – a percent that hasn’t changed in four decades.

Contrast this with the United States, where the top 1 percent went from getting 9 percent of total income in the late 1970s to more than 20 percent today.

The only way back toward sustained growth and prosperity in the United States is to remake the basic bargain linking pay to productivity. This would give the American middle class the purchasing power they need to keep the economy going.

Part of the answer is, as in Germany, stronger labor unions — unions strong enough to demand a fair share of the gains from productivity growth.

The current Republican assault on workers’ rights continues a thirty-year war on American workers’ wages. That long-term war has finally taken its toll on the American economy.

It’s time to fight back.

© 2011 Robert Reich

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on publicradio.com and iTunes.

More on "MORE TRADE AND MORE AID”

John,

I agree that each nation should ideally be production self-sufficient in basic commodities to extent possible … like oil and gas. The intractable political reality problem undermining such sensible strategic aims is that the governing elites of both parties are hopelessly mired, divided, and corrupted  by parochial special interests to the extreme. We can’t come together on anything.

It’s high time the U.S. did – what Germany and Japan historically have been cleverly doing with superb technical training and education programs – namely,  adopt an aggressive policy of retaining and expanding “home production” of key component parts of intensive-knowhow-industrial products  … as opposed to current practice of U.S. corporations’ outsourcing production of products or components for knowhow fees, maximum global profits and then reimporting  same products, skyrocketing U.S. trade deficits. The revenue inflows from this trade practice benefit but a SMALL number of middle-class workers. The job growth dynamics are peanuts compared to a national strategy of having product development, design and at least component manufacturing in America for American needs. Spirits will be energized as a more equitable, inclusive, confident sharing in our nation’s social-economic progress returns. 

We should also formulate a policy – under  easy-to-measure guidelines and criteria – that requires foreign firm importers of industrial, high knowhow products to establish manufacturing facilities in the U.S. After all, this has been rather successfully done with Japanese cars. Control and oversight could be in the hands of a respected team of independent experts from the business, R&D, education, worker training and development fields.

Lastly, as you have noted John in a prior writing, American products coming into the EU, e.g., to Germany or The Netherlands, are hit with a VAT of +- 19% plus  an import duty. In sharp contrast, EU products entering the U.S. incur only an import duty plus a much lower state sales tax at point of final sale. Thus, the EU vs. U.S. total tax-import duty system, when combined with low-cost foreign labor,  grossly unfairly favors imports from the EU (and Asia). This tax-duty disparity also generates more EU tax revenues, greatly tempers excessive EU imports while helping exports, leading to relatively modest EU trade deficits (even annual trade surpluses for Germany and The Netherlands). It further intensifies the will of U.S. corporations to outsource all or a part of their production to China or to some other low-cost developing country, thereby permanently destroying hundreds of thousands of American jobs each year.     

Frank Thomas
The Netherlands

More Trade and More Aid

Op-Ed Contributors

By MATTHEW J. SLAUGHTER and ROBERT Z. LAWRENCE

Published: June 8, 2011 from the New York Times

A FEUD over trade has erupted in Washington, and American workers are caught in the middle. Congressional Republicans (and some Democrats) are threatening to hold up approval of free-trade agreements with South Korea, Colombia and Panama if President Obama keeps insisting on renewing expanded benefits under Trade Adjustment Assistance, the main aid program for American workers harmed by foreign trade.

Supporters say the program — which offers retraining, relocation and other benefits to workers who lose their jobs due to competition from imports — offers vital protection. Opponents label it an unaffordable boondoggle. If our country fails to resolve this dispute, our economic future will be bleak.

As former advisers to presidents from different parties, we are coming together to urge a way out: rethinking how we help displaced workers in order to revive political support for the free trade our economy needs.

Three principles guide our proposal. First, trade is indeed worth it for America. Annual national income today is at least $1 trillion higher than it would have been absent decades of trade and investment liberalization. With unemployment at 9.1 percent and 24.6 million Americans unemployed or underemployed, we need to rebalance our economy away from the excessive consumption that helped bring about the global financial crisis, and create jobs linked to exports and international investment.

Second, trade is not worth it for every individual American. Trade creates unemployment for some and wage losses for others; its gains do not directly accrue to every worker and community. Indeed, there has been a steep drop in public support for trade; a recent Wall Street Journal/NBC poll found that only 17 percent of respondents said free-trade deals have helped America.

Third, Trade Adjustment Assistance, created in 1962 to supplement unemployment insurance, cannot adequately help displaced workers. Workers today face continual adjustment as new technologies and competitors, both domestic and foreign, render their talents and skills obsolete. Indeed, the premise that job losses can be attributed to precise causes is archaic, given the linkages among international trade and investment and technological change.

In recent years, less than half of workers certified as eligible for T.A.A. benefits have actually used them. Petitions filed with the Labor Department for T.A.A. benefits in 2007 covered just 93,903 workers — fewer than the number of jobs created or lost on an average day.

Our proposal to resolve the trade impasse: more trade and more aid. More trade means that President Obama should immediately submit, and Congress should immediately ratify, the pending free-trade agreements. Colombia and Panama already enjoy unfettered access to our market, and South Korea has negotiated free-trade deals with the European Union and India; we cannot afford to fall behind.

More aid means Congress and the president should replace T.A.A. with a broader safety net that helps workers regardless of why they lost their jobs. Unemployment insurance, introduced in the early 1930s, has not really changed since then; it should be merged with T.A.A. Today, unemployed workers face challenges far greater than T.A.A. or unemployment insurance alone can address: getting matched with a new employer, often in a new industry; upgrading or learning new skills, often at reduced wages; and coping with lost benefits, especially health coverage.

A new American Adjustment Program should combine the best elements of unemployment insurance, T.A.A., and training programs authorized by the Workforce Investment Act. This approach would include a wage-loss insurance program for workers 45 and older, to speed their rehiring by supplementing their income if they take work at lower pay; helping workers receiving unemployment insurance to pay for coverage under Cobra (which allows workers who lose their jobs to keep group health benefits for limited periods); and enabling unemployed workers to make penalty-free withdrawals from savings accounts like 401(k)’s and I.R.A.’s to finance costs like occupational retraining and relocation.

Our plan would cost about $20 billion per year. We would pay for this by scrapping the current unemployment insurance tax structure, which is extremely regressive, for a low flat tax on all worker earnings — a change that would cut taxes for tens of millions of lower-wage workers. The costs of our plan would decline in the long run as the economy recovers. Moreover, the cost of not better supporting workers will be far greater if a skeptical public pushes America into economic isolation and the result is slower growth, fewer jobs and lower tax receipts.

Voter support for engagement with the world economy is strongly linked to labor-market performance. If American workers continue to fear change, their support for free trade will not return.

Matthew J. Slaughter, a professor of management at the Tuck School of Business at Dartmouth, and Robert Z. Lawrence, a professor of international trade and investment at the Harvard Kennedy School, were economic advisers to Presidents George W. Bush and Bill Clinton, respectively.

The Rich Are Destroying the Economy

Published on Sunday, June 12, 2011 by CommonDreams.org

by Shamus Cooke

Ever since the Great Recession shook the foundations of the U.S. economy, President Obama has been promising recovery. Evidence of this recovery, we were told, was manifested in the massive post-bailout profits corporations made. Soon enough, the President assured us, these corporations would tire of hoarding mountains of cash and start a hiring bonanza, followed by raising wages and benefits. It was either wishful thinking or conscious deception. The recent stock market meltdown has squashed any hope of a corporate-led recovery.

The Democrats fought the recession by the same methods the Republicans used to create it: allowing the super rich to recklessly dominate the economy while giving them massive handouts. This strategy, commonly referred to as Reaganomics or Trickle Down Economics, is now religion to both Democrats and Republicans; never mind the staged in-fighting for the gullible or complicit media.

When it becomes obvious to even the President that the economic recovery never existed beyond the bank accounts of the rich, questions will have to be answered. Why, for example, did nobody in either political party foresee the disastrous consequences of the bailouts? Not only did the U.S. deficit drastically increase but the same U.S. corporations that caused the recession were given reinforcement for their destructive actions, ensuring that it would continue unabated.

In his book, Crisis Economics, Nouriel Roubini outlines the insane response to the recession by Republicans and Democrats. Because both parties simply threw money at the banks and hedge funds instead of punishing them, a condition of "moral hazard" was created, meaning, that banks would assume another bailout would come their way if they destroyed the economy again -- too big too fail, remember? Roubini explains how the Democrats allowed the "too big" banks to get even bigger; how Wall Street salaries based on short-term profits went unregulated; how the regulations that were put into place were inadequate and filled with loopholes; how nothing of any significance changed.

Roubini has also written extensively about how the post-bailout Federal Reserve policies were fueling a commodity bubble that may be in the midst of bursting, possibly triggering a double dip recession. Essentially the big banks and rich investors were borrowing cheap dollars from the Fed and investing abroad in commodities with the hopes of higher returns. Roubini states:

“The risk is that we are planting the seeds of the next financial crisis...this asset bubble is totally inconsistent with a weaker recovery of economic and financial fundamentals." (October 27, 2009).

This investor-created commodity bubble pushed up prices in oil, food, and other basic products, causing further pain for working families and the economy as a whole. This speculative bubble was easily predictable but ignored by both political parties, since they claimed the bubble was a sign of recovery.

Another mainstream economist, Paul Krugman, also admits that the rich's death-grip on the U.S. political and economic system is causing pain for everybody else:

"Far from being ready to spend more on job creation, both parties agree that it's time to slash spending - destroying jobs in the process - with the only difference being one of degree...policy makers are catering almost exclusively to the interests of rentiers [rich investors] - those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else's expense." (June 10, 2011)

Krugman explains that this process continues because the rich dominate the political system through campaign contributions, "access to policy makers,” promises of high paying corporate jobs after their congressional term is over, and good o'l fashion corruption. Because he's a true blue Democrat at heart, Krugman nevertheless focuses most of his rage on Republicans.

Krugman's repeated calls to Democrats and Republicans to create jobs have fallen on deaf ears. Both parties agree that the "private sector" [corporations] should create jobs; until they decide to hire, nothing will happen. This is not merely "bad policy,” as liberals like Krugman like to fret about, but the conscious agenda of the rich. Corporations and rich investors love high unemployment. The Kansas City Star explains why:

"Last year [2010], for the second year in a row, U.S. companies got more work out of their employees while spending less on overall labor costs." (February 3, 2011)

It really is that simple. High unemployment creates a downward pressure on wages, allowing employers to work the remaining employees harder and thus to increase profits. This dynamic, combined with the above commodity speculation, has been the entire basis for the corporate recovery, while working people have literally seen nothing beneficial.

This process is an extension of the bailouts, in the sense that more wealth is being transferred from working people to the corporations. Since consumer spending accounts for 70 percent of the U.S. economy, policies like these ensure that another crisis is inevitable.

Further complicating matters is the ending of the Federal Reserve's Quantitative Easing program (printing money), which amounted to the Fed buying $600 billion in U.S. Treasury bonds since last fall, essentially funding the U.S. debt and driving down interest rates.

Since the Fed was buying 60 percent of the bonds, a new creditor will need to be found; and this lender will likely require higher interest rates before loaning to the U.S. government, to make sure the loan is profitable. And although different nations buy U.S. debt for different reasons, much of this debt is bought by rich U.S. citizens, who will put the squeeze on the rest of us that have to pay back this debt. The Washington Times explains:

"...Bill Gross, the head of America's own Pimco bond fund, the largest buyer of bonds worldwide, recently reduced Pimco's holdings of Treasuries to zero out of concern that they weren't yielding enough given the risks of inflation and deficit spending." (June 7, 2011)

When the Federal Reserve raises interest rates to satisfy these rich investors, the economy will likely take a further nosedive. It appears, then, that the rich have a win-win situation: they got free bailout money, which increased the deficit; and because the deficit is too high, the rich want higher interest rates for investing in U.S. Treasury Bonds. In both instances working people pay the bills.

This insanity cannot be stopped by conventional measures, since politicians are tone deaf to anything that doesn't ring of corporate cash. The jobs crisis continues as a result of the policy agreed to by both Democrats and Republicans. The labor movement has a special role to play in reversing the above policies.

The corporate-led discussion around cutting social programs to fix the deficits -- on a state and national level -- can be challenged by a nationally coordinated campaign of unions and community allies demanding: Tax the Rich! This demand is significant because it can address both the deficits and the jobs crisis: a massive public works program can be funded by taxing the corporations and the wealthy to pre-Reagan levels. And it makes complete sense because the growing inequalities in wealth over the past three decades has meant a spectacular concentration of wealth at the top. The rich have plenty of money to spare.

Organized labor needs to bring masses of people in the street all over the country in order to get attention and pressure the government to respond to these demands. And it can succeed, especially if it organizes a serious, protracted campaign and especially if this campaign does not get funneled into supporting Democratic candidates, the surest way to kill campaign momentum.

AFL-CIO President Richard Trumka recently spoke in favor of a strong, independent labor movement. This is the direction it must take, rather than relying on the Democrats. The labor movement must get its act together, unite to put up a fight and demand specific policies that can concretely address the crisis faced by millions of working people.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org).  He can be reached at [email protected]

Economy: The German Example

by David Leonhardt

New York Times, June 7, 2011

Germany has been a frequent cudgel in recent fights over the American economy. When Germany has grown faster than the United States, stimulus skeptics like to point across the Atlantic Ocean and say that austerity works. When it has grown more slowly, people who think the American stimulus made a big difference — including me — return the favor.

But the full story is more interesting than any caricature. In the last decade, Germany has succeeded in some important ways that the United States has not. The lessons aren’t simply liberal or conservative. They are both.

With our economy weakening once again — and with Chancellor Angela Merkel of Germany visiting the White House this week — now seems to be a good time to take a closer look.

The brief story is that, despite its reputation for austerity, Germany has been far more willing than the United States to use the power of government to help its economy. Yet it has also been more ruthless about cutting wasteful parts of government.

The results are intriguing. After performing worse than the American economy for years, the Germany economy has grown faster since the middle of last decade. (It did better than our economy before the crisis and has endured the crisis about equally). Just as important, most Germans have fared much better than most Americans, because the bounty of their growth has not been concentrated among a small slice of the affluent.

Inflation-adjusted average hourly pay has risen almost 30 percent since 1985 in Germany, the kind of gains American workers have not enjoyed since the ’50s and ’60s. In this country, hourly pay has risen a scant 6 percent since 1985.

Germany also managed to avoid a housing bubble, unlike the United States, Britain, Ireland, Spain and other countries. German children have stronger math and science skills than ours. Its medium-term budget deficit is smaller. Its unemployment rate is like a mirror image of ours: 6.1 percent, well below where it was when the financial crisis began in 2007. Our rate has risen to 9.1 percent.

I’m not saying that the United States should want to become Germany. Americans remain considerably richer. We have the innovative companies — Wal-Mart, Google, Apple, Facebook, Twitter — that make other countries swoon. We remain the world’s immigration Mecca.

Yet for all the strengths of the United States, almost nobody claims that the economy is in especially good shape. It so happens that our current out-of-town guests could teach us a few things.

•

The first lesson is that it’s really possible to make government more efficient. Like much of Western Europe, Germany long had a unemployment benefits system that discouraged work. But almost a decade ago, it began to make some changes.

It cut many benefits, in both duration and level, and it reduced the incentives to retire early. It also began trying to move the long-term unemployed into the labor force.

Specifically, the government took a fresh look at people who had not worked in years to determine who could and couldn’t work. The able and healthy were matched with potential employers. If they took a low-paying job, which was often the case, they would still receive a small portion of their benefits for a time. If they refused to work, their benefits were reduced anyway.

“The incentives to take up work were strengthened,” says Felix Hüfner of the Organization for Economic Co-operation and Development, “and also the sanctions were strengthened.” Sure enough, the reforms have nudged more people back into the labor force — and work tends to beget more work, as people develop skills and have more money to spend.

In the United States, short-term jobless benefits are not generous enough to be a major problem. But the Social Security disability program, which is one reason nearly 20 percent of working-age American men are not working, would benefit from some German-like reforms. So would those public sector pensions that encourage people to retire at 55 or 60.

Beyond the job market, Germany has also made a big effort to improve its education system. Eric Hanushek, a Stanford University economist, notes that Germany’s performance on the main international math, reading and science tests have become such a matter of national concern that the name of the tests — Pisa — is now a household word. “In the U.S.,” he says, “Pisa is still a bell tower in Italy.”

The math scores of German students have risen significantly since 2000, extending their existing lead over American students. Germany’s national average is now higher than the average in Massachusetts, this country’s top-performing state. And there is obviously a connection between strong technical skills and a strong manufacturing sector.

But the German story is not merely about making government more efficient. It’s also about understanding the unique role that government must play in a market economy.

That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent.

Unlike what happened here, German laws and regulators have also prevented the decimation of their labor unions. The clout of German unions, at individual companies and in the political system, is one reason the middle class there has fared decently in recent decades. In fact, middle-class pay has risen at roughly the same rate as top incomes.

The top 1 percent of German households earns about 11 percent of all income, virtually unchanged relative to 1970, according to recent estimates. In the United States, the top 1 percent makes more than 20 percent of all income, up from 9 percent in 1970. That’s right: only 40 years ago, Germany was more unequal than this country.

Finally, there are taxes. Germany does not have a smaller budget deficit because it spends less. Germany, you’ll recall, is the original welfare state. It has a smaller deficit because it is more willing to match the benefits it wants with the needed taxes. The current deficit-reduction plan includes about 60 percent spending cuts and 40 percent tax increases, Mr. Hüfner says. It’s like trying to lose weight by both eating less and exercising more.

As I suggested before, the American economy’s strengths may still be greater than the German economy’s. But Germany sure does seem more serious about dealing with its weaknesses.

And us? Well, lobbyists for the mortgage bankers and the N.A.A.C.P. have recently started pushing for less stringent standards for down payments. Wall Street is trying to water down other financial regulation, too.

Some Democrats say Social Security and Medicare must remain unchanged. Most Republicans refuse to consider returning tax rates even to their 1990s levels. Republican leaders also want to make deep cuts in the sort of antipoverty programs that have helped Germany withstand the recession even in the absence of big new stimulus legislation.

There is no getting around the fact that financial crises wreak terrible damage. It’s too late for us to prevent that damage, and it will take a long time to recover fully. It is not too late to learn from our mistakes.

Glued to The Weather Channel While the World Burns

Published on Monday, June 6, 2011 by Huffington Post

by Paul Rogat Loeb

Following the weather is beginning to feel like revisiting the Biblical plagues. Tornadoes rip through Missouri, Alabama, Mississippi, Oklahoma--even Massachusetts. A million acres burn in Texas wildfires. The Army Corps of Engineers floods 135,000 acres of farmland and three million acres of bayou country to save Memphis and New Orleans. Earlier in the past year, a 2,000-mile storm dumped near-record snow from Texas to Maine, a fifth of Pakistan flooded, fires made Moscow's air nearly unbreathable, and drought devastated China's wheat crop. You'd think we'd suspect something's grievously wrong.A wildfire sweeps over Alpine, Arizona, burning 120,600 acres by Saturday.

But media coverage rarely connects the unfolding cataclysms with the global climate change that fuels them. We can't guarantee that any specific disaster is caused by our warming atmosphere. The links are delayed and diffuse. But considered together, the escalating floods, droughts, tornadoes, and hurricanes fit all the predicted models. So do the extreme snowfalls and ice storms, as our heated atmosphere carries more water vapor. So why deem them isolated acts of God--instead of urgent warnings to change our course?

Scientists are more certain than ever, from the National Academy of Science and its counterparts in every other country to such "radical groups" as the American Chemical Society and American Statistical Society. But the media has buried their voices, giving near-equal "point/counterpoint" credence to a handful of deniers promoted by Exxon, the coal companies and the Koch brothers. Fox News's managing editor even prohibited any reporting on global climate change that didn't immediately then question the overwhelming scientific consensus. The escalating disasters dominate the news, but stripped of context. We're given no perspective to reflect on their likely root causes.

Meanwhile, leading Republicans who once acknowledged the need to act, like Tim Pawlenty, disavow their previous stands like sinners begging forgiveness. A Tea Party Congress insists that they know better than do all the world's scientists, dismissing decades of meticulous research as Ivory Tower elitism. Even Obama has fallen largely silent, as if he can't afford an honest discussion.

As a result, too many Americans still don't know what to believe. We can't see, smell or taste the core emissions that create climate change. The industrial processes that create the crisis are so familiar we don't even question them, no more than the air that we breathe. And if we're not getting hammered by the weather, the world still seems normal, particularly on a lovely summer day. Plus we're told that in the current economic crisis we can't afford even to think about climate change or any other urgent environmental issue, even though the technologies that provide the necessary alternatives are precisely those our country will need to compete economically. Add in a culture of overload and distraction, and it's easy to retreat into denial or self-defeating resignation. It's as if half our population was diagnosed with life-threatening but treatable cancer--visited the world's leading medical centers to confirm it--and then decided instead to heed forwarded emails that assure them that they can freely ignore the counsel of the doctors and simply do nothing.

The antidote to denial and the forces that promote it is courage. And as Egypt and Tunisia remind us, courage is contagious. We need to act and speak out in every conceivable way, and demand that our leaders do the same. We need to engage new allies, like religious evangelicals who've recently spoken out to defend "God's creation," from best-selling minister Rick Warren to highly conservative organizations like the Christian Coalition. We need to work with labor activists who link this ultimate issue with the renewal of American jobs. A recent BlueGreen Alliance conference, for instance, brought together leaders of major unions like the United Steel Workers, SEIU, Communications Workers of America, United Auto Workers, Laborers' International, and American Federation of Teachers, with environmental groups like the Sierra Club, National Resource Defense Council, National Wildlife Federation and Union of Concerned Scientists, all speaking about the need to invest in an economy where both ordinary workers and the planet are respected. We need to join with these allies and others to voice our outrage at those risking our common future for greed. We need to find creative ways to do this until America's political climate comes to grips with the changing climate of the earth. Here's hoping the mounting disasters will finally teach us to turn off The Weather Channel and begin taking action.

© 2011 Huffington Post

Paul Rogat Loeb is the author of Soul of a Citizen: Living with Conviction in  Challenging Times, whose wholly updated new edition will be released March 30, and The Impossible Will Take a Little While: A Citizen's Guide to Hope in a Time of Fear, named the #3 political book of 2004 by the History Channel and the American Book Association. His previous books include Generation at the Crossroads: Apathy and Action on the American Campus. See www.paulloeb.org To receive his articles directly email [email protected] with the subject line: subscribe paulloeb-articles.

With Ollanta Humala's Win, Peru Joins Latin America's Left Turn

Published on Tuesday, June 7, 2011 by The Nation

by Greg Grandin

Add Peru to the list of Latin American countries that have turned left. On Sunday, Peruvians voted in a second-round run-off ballot and elected Ollanta Humala, a 48-year old former army officer, president. This is Humala’s second try for the office. In 2006, he came close to winning, but Wikileaks cables reveal that Peru’s establishment politicians put aside their differences and beat a path to the US embassy, asking for help smearing Humala as a Peruvian Hugo Chávez.  

Wikileaks also reveals that that same year the Mexican right and the US State Department worked together to defeat the populist presidential candidate Andrés Manuel López Obrador, leading many in the US to gloat that the “left turn” in Latin America had run its course.

Humala’s victory suggests otherwise. Here’s just some of what has happened since 2006: In Bolivia, Evo Morales presided over the ratification of a new social-democratic constitution and was re-elected as president in 2009 with 64 percent of the vote. In Ecuador, Rafael Correa also easily won reelection and ratified a new constitution that guarantees social rights and puts tight limits on privatization. Recently, Ecuadorians likewise voted on ten progressive ballot initiatives, passing them all. They included the strict regulation of two blood sports: banks are now banned from speculation and bulls can no longer be killed in bull fights.

And last year in Brazil, the trade unionist Luiz Inácio Lula da Silva left office the most popular politician on the planet, handing over the presidency of one of the world’s largest economies to Dilma Rousseff, a former urban guerrilla and economist who vows to continue to try to make Brazil a more humane and equal nation.

All of these national left political projects—from Venezuela to Uruguay—have their problems and shortcomings, and are open to criticism on any number of issues by progressive folk. But combined, the Latin American left can claim a remarkable achievement: It has snatched the concept of democracy away from neoliberals and the corporate privateers who came close to convincing the world that democracy equals deregulated capitalism and returned the term to its more humane, sustainable definition. In Latin America, democracy means social democracy. So considering the otherwise bleak global landscape, the return of the Latin American left, now well into its second decade, is cause for great cheer.

What does Humala’s victory mean for Peru? Most importantly in the short run, it has halted the return of Alberto Fujimori’s style of death-squad neoliberalism. Humala’s opponent was Fujimori’s daughter, Keiko, who pledged to free her jailed father, who was convicted of murder, kidnapping and corruption.

In the long run, many Peruvians, particularly those outside of Lima, voted for Humala because they have seen little benefits from the country’s celebrated macroeconomic performance over the last decade, driven by the high price of silver, zinc, copper, tin, lead and gold—which comprise sixty per cent of the country's exports.

Over thirty per cent of Peru's thirty million people live in poverty and eight per cent in extreme poverty. In rural areas, particularly in indigenous communities, more than half of all families are poor, many desperately so. Humala has promised to address this inequity with a series of pragmatic measures—a guaranteed pension to people over 65; expanding health care in rural areas, including the construction of more provincial hospitals; an increase in public sector salaries, to be paid for with a windfall profit tax on the mining sector.

In terms of foreign policy, Humala’s election is another victory for Brazil in its contest with Washington for regional influence. If Fujimori had won, she would have aligned Peru politically with Washington and economically with US and Canadian corporations.

Humala, in contrast, will tilt toward Brazilian economic interests. Indeed, the Peruvian historian Gerardo Rénique said that the election, while representing an important victory for democratic forces, could also be understood in part as a contest between Brazil and the US over Peruvian energy and mineral resources. In this perspective, one could say that it didn’t matter who won the Peruvian election: the Amazon lost.

Here then might be the question that determines the success of Humala’s presidency: As he tries to put into place his “growth with social inclusion” agenda, will he be able to balance the conflicting interests of his Brazilian allies and the social movements that elected him, many of which are fighting for sustainable development and local control of resources?

In addition to reviving social democracy, the other major accomplishment of the renewed Latin American left has been to dilute the entrenched racism that has defined the continent for centuries. In Bolivia, Ecuador, Chile, Brazil, Venezuela and other countries, Native Americans and peoples of African descent have led a remarkable, if still incomplete, democratization of politics and culture. Peru, with its 45 percent Amerindian population, has largely been left out of this process. In fact, some say that racism has deepened over the last decade, with the mining boom wreaking havoc on the dark-skinned Andean countryside and Amazonian lowlands while financing the rise of luxury condos and malls in white, middle-class Lima.

So however hard it might be for Humala to take on international capital—Peru’s stock market plunged 12 percent the day after his election—an equally difficult challenge will be to tackle Peruvian racism. “El Indio Humala” lost Lima by a wide margin, driven mostly not by fears he would turn Peru into Chávez’s Venezuela but into neighboring Indian-governed Bolivia. Candidate Humala did his best to deflect these concerns.

President Humala, however, will have to confront this racism directly if he is to succeed in democratizing Peru. After all, even before all the votes where in, tens of thousands of his supporters began to fill the country’s plazas, including Lima’s. They raised high the rainbow wiphala flag that became ubiquitous in Bolivia, during the rise of the social movements that brought Evo Morales to power. Today, it is waved throughout the Andes as a symbol of indigenous pride and sovereignty.

Copyright © 2011 The Nation

Greg Grandin teaches history at New York University and is a member of the American Academy of Arts and Sciences. His most recent book, Fordlandia, was a finalist for the Pulitzer Prize in history.

A World of Cooperation and Shared Ownership

by Jeffrey Hollender

Huffington Post, June 7, 2011

We hold in our own hands the key to building a sustainable economic future. Literally. By placing responsibility and ownership into the hands of employees globally, we have the ability to mold an economy that benefits us all.

It's possible by embracing the idea of economic democracy.

Traditionally, economic democracy represents a socio-economic arrangement in which business enterprises are democratically managed and worker-owned. Think Organic Valley, the $500 million leader in the organic dairy industry, which is also a cooperative of family farms.

Cooperatively-owned businesses can range from small-scale local companies to multimillion dollar global businesses. While form and structure varies (worker cooperatives, consumer cooperatives, producer cooperatives, purchasing cooperatives and credit unions), these businesses share a common goal: to primarily benefit a group of stakeholders rather than primarily outside investors.

Shared ownership helps diversify rather than concentrate wealth. It roots the value it generates in communities, keeping assets and resources from being transferred from local communities to multinational corporations and their owners. Organic Valley's farmers have a tangible financial stake in the co-op, amounting to 5.5 percent of each member's annual sales. Each member farmer also is entitled to a single vote in decision-making.

These economic institutions exist in all sectors of our economy, from banking, finance and insurance to education, manufacturing, retail and agriculture. Economic democracy exists within capitalist economies and does not reject the role of markets, but rather limits the primacy of the profit-maximization motive that currently drives the way in which most businesses engage with the market.

Today, throughout the world, cooperatives already employ more than 100 million people and have more than 800 million members. In the United States, cooperatives have more than 120 million members and employ more than 850,000 people, and indirectly generate more than 2 million jobs. Additionally, according to the National Center on Employee Ownership, approximately 13.6 million employees in the United States are employee-owners through their participation in 11,300 employee stock ownership programs (ESOPs). Combined employee assets held in these ESOPs exceed $900 billion.

The breadth and depth of co-ops in the United States can also be seen in the following figures. Today, the more than 29,000 co-ops in the United States:

• Have total assets of 3.1 trillion;
• Operate at more than 72,000 establishments nationwide;
• Deliver telephone services through 255 co-ops to 964,000 households;
• House more than 1.5 million households through 6,400 co-ops; and
• Provide financial services through 7,486 credit unions to 91.76 million member-owners, with total assets now exceeding 925 billion.*

Well-known cooperative businesses range from the aforementioned Organic Valley to Nationwide Mutual Insurance, an 80-year-old Fortune 500 company, with more than $135 billion in statutory assets; Land O'Lakes, Inc., a farmer-owned food and agricultural cooperative with $12 billion in sales; Unified Grocers, the largest wholesale grocery distributor in the western United States with over $4 billion in sales; and Amalgamated Life Insurance Company, founded in 1943 with more than $800 million in annual premium, premium equivalencies and fee-for-service.

In Europe, Italy's Legacoop and Spain's Mondragon multi-sector cooperatives have been able to both reach significant scale and demonstrate long-term sustainability. Legacoop, founded in 1886 in Milan, now has more than 15,000 member cooperatives and employs more than one million people. Mondragon, founded in 1956, now holds 33.3 million euros in assets and employs more than 85,000 people internationally.

A world of cooperation and shared ownership is not only possible, but critical to address the chronic unemployment, the dangerous concentration of wealth and the environmental destruction our world currently faces.

Let's make the possible tangible so we can put our hands to use building our economic future.

Resources for additional information about economic democracy:

The Democracy Collaborative
ESOP Association
National Center for Employee Ownership (NCEO)
National Cooperative Business Association
National Federation of Community Development Credit Unions
Ohio Employee Ownership Center
U.S. Federation of Worker Cooperatives
Vermont Employee Ownership Center

*Sources include industry reports (e.g., 2010 CUNA data on credit unions), a 2009 USDA-financed study, authored by Steven Deller, Ann Hoyt, Brent Hueth and Reka Sundaram-Stukel of the University of Wisconsin, and "Worker Cooperatives for the 21st Century" by Nicholas Luviene, Amy Stitely and Lorlene Hoyt.

 

This Blogger's Books from

The Responsibility Revolution: How the Next Generation of Businesses Will Win
by Jeffrey Hollender, Bill Breen

What Matters Most: How a Small Group of Pioneers Is Teaching Social Responsibility to Big Business, and Why Big Business Is Listening
by Jeffrey Hollender

 

 

Follow Jeffrey Hollender on Twitter: www.twitter.com/JeffHollender

Natural Disasters Displaced 42 Million In 2010; Climate Change Could Be Factor, Experts Say

 
from Huffington Post, June 6, 2011

OSLO, Norway — About 42 million people were forced to flee their homes because of natural disasters around the world in 2010, more than double the number during the previous year, experts said Monday.

One reason for the increase in the figure could be climate change, and the international community should be doing more to contain it, the experts said.

The Internal Displacement Monitoring Centre said the increase from 17 million displaced people in 2009 was mainly due to the impact of "mega-disasters" such as the massive floods in China and Pakistan and the earthquakes in Chile and Haiti.

It said more than 90 percent of the disaster displacements were caused by weather-related hazards such as floods and storms that were probably impacted by global warming, but it couldn't say to what extent.

"The intensity and frequency of extreme weather events is increasing, and this trend is only set to continue. With all probability, the number of those affected and displaced will rise as human-induced climate change comes into full force," said Elisabeth Rasmusson, the secretary general of the Norwegian Refugee Council.

The monitoring center and refugee council presented the report at an international conference about climate change and displacement in Oslo.

The number of people displaced last year – about 42 million – is roughly the size of Argentina's entire population, and the onslaught of natural disasters so far this year also has been grim.

The March 11 earthquake and tsunami in Japan left more than 10,000 people dead, some 17,500 missing and about a half-million homeless.

In the United States, tornadoes have wreaked havoc from Alabama to Massachusetts, while floods have inundated states from Montana to Louisiana. In the southwest Missouri city of Joplin, the U.S.'s deadliest tornado in six decades killed at least 141 people and destroyed more than 8,000 homes in a city of about 50,000 people.

Story continues below

Speaking at the Oslo conference, U.N. High Commissioner for Refugees Antonio Guterres called the issue of climate-related displacement "the defining challenge of our times" and criticized the international community for lacking the political will to reduce to pace of climate change.

"There is increasing evidence to suggest that natural disasters are growing in frequency and intensity and that this is linked to the longer-term process of climate change," Guterres said.

Asia was the hardest hit region last year, with the largest number of displaced people seen in countries such as India, the Philippines, Bangladesh, Indonesia, China and Pakistan.

In China alone, more than 15 million people were forced to leave their homes following floods, while 11 million people were displaced in Pakistan, the report said. The large floods in India in 2009 also continued to force people to leave their homes in 2010.

"This report provides us with evidence of the extent and urgency of the problem that we cannot ignore. We must increase collaborative efforts to prevent displacement by natural disasters, and do a better job of protecting those displaced," Rasmusson said.

___

Malin Rising in Stockholm contributed to this report.

Obama's Lack of Ideology Leading to Job Creation Debacle

by Frank Thomas and John Lawrence

Obama seems to be counting on the fact that the economy will recover on its own after the initial stimulus package. It's starting to look like this was a bad bet. The Republicans of course have their job creation plan in place: lower taxes especially on the rich, less government spending and more deregulation or, in other words, the continuation of the transfer of wealth from the poor and middle class to the rich. However, this is precisely what has ruined the economy. As Robert Reich, Bernie Sanders, Paul Krugman and others have been saying repeatedly, the government has to spend more to create jobs and raise the money to do so by a variety of mechanisms like a financial transaction tax, doing away with subsidies for oil and agriculture, closing tax loopholes for corporations, raising taxes on millionaires and billionaires etc. Obama is in the weak position of not having an ideological counter to the Republican ideology. The Democrats need to develop an ideological position based on Keynesian economics to counter the Republicans. Obama's "Republican lite" philosophy will probably result in his losing the next election if the economy continues to sputter and stagnate. His position seems to be the Republican position only not quite as severe. What is needed is a complete repudiation of trickle down economics, union busting, the "small government" mantra, and the wealthy as "job creators." The Democrats need an ideological consistency to counter the Republicans who are extremely ideologically consistent.

 

Most of the jobs being created are temp jobs and lousy jobs at less than a living wage. The Democrats are not addressing this and they need to. The Democrats need to state loudly and clearly that the government needs to be the job creator of last resort. If private enterprise cannot create the jobs to provide for a full employment economy, then government must step in and fund infrastructure repair projects and even a WPA style work program. We need to get over the notion that the only legitimate government job creation program is in the military.

 

Obama's Administration and the Republicans are either brain mute or unwilling (out of fear of increasing America's indebtedness now with CONSTRUCTIVE PUBLIC DEBT financed investments ) to recognize the deeply structural character of our nation's declining rate of job generation shown in Frank's 30 year trend summary (The U.S. Ongoing Structural Unemployment Calamity).           

 

The 50,000 job generation in May doesn't surprise us. In the 80s and 90s decades about 36-38 million jobs  were created (averaging 18-20 million per decade: see Advance and Rutgers study). In the first decade of the 21st century, depending on which study numbers one uses, U.S. job generation was either a shockingly negative -0.4 million up to -2.1 million including labor force growth. 

To summarize again this disastrous trend based on Advance & Rutgers 1982-2009 and BLS 2010-11 data:

 

                                                ANNUAL AVE. JOB GROWTH      TOTAL

 

Nov.1982-July 1990 Expansion            2,401,800                     18.4 Mil.

                            

Mar. 1991-Mar. 2001 Expansion          2,150,000                     21.5 Mil.

 

Nov. 2001-Dec. 2007 Expansion          1,020,550                       6.2 Mil.

 

Jan. 2008-Dec.2009 RECESSION      - 4,600,000 (a)              -9.2 Mil. (a)

  

Jan.2010- Dec. 2010 RECOVERY              850,000                       0.9 Mil.

 

Jan. 2011- May 2100 RECOVERY              700,000                       0.7 Mil.

 

(a) Includes unfulfilled job need of 1.7 million to meet labor force growth.

                                                                  

 

As everyone has learned a few thousand times over by now, we have 14 million officially unemployed and another 8-10 million underemployed (the latter at below-subsistence wage levels). As was reported in a recent writing, this overall situation is far worse than that of the better performing, mature European countries (excepting the high jobless levels in Spain, Ireland, Greece and Portugal). 

 

AUSTERITY (get rid of waste), REFORM  (Medicare, Soc. Security, Defense Spending, Tax System/Avoidance)  and INVEST (in high-return projects, training) to produce jobs should be Obama's no-holds-barred leadership call. We are on the path of being mired in a long lasting economic malaise similar to Japan's experience during 1992-2002  -- where their debt as a % of GDP rose from 62% to 174% in 2004 and even higher now. Japan covered their explosive annual debt cost with exceptionally strong net export surpluses up to 2008. Now, with sharply deteriorating net export balances, their high debt level is becoming an unquestionably dangerous financial burden.

 

If we migrate to a Japan 10 year stagnant-type malaise, we will be in BIG financial trouble because we have no trade surpluses, only enormous annual trade deficits simultaneously with a mountain of public debt escalated in the Great Recession bubble of Bush's Presidency and by the government's costly rescue efforts of selected financial institutions.

 

As repeated many times, our economic growth model of extreme dependence on CONSUMPTION (70% of GDP vs. 60% in Europe) with almost Zero Savings (vs. 10-12% in Europe) and net export deficits of $45-60 billion a month, along with low PUBLIC and PRIVATE Investments (vs. higher infrastructure and R&D investment levels in Europe) is NOT SUSTAINABLE. European countries, like Holland, Germany and others, realize that Public investment spending, joint private-public ventures and  sensible, affordable military spending (+-1.7% of GDP vs. +-5.5% in U.S.) much more significantly and effectively increase GDP, jobs, incomes and tax revenues in the short and long term. All this means that we need new ideas to get our social-economic model structurally as well as fiscally balanced to improve societal well-being ... to stop the destruction of human capital through impoverishment of the middle-class.

The Democrats need to fine tune their ideological stance and confront the Republican ideology head on. They can't just be pragmatic. Pragmatism looks a lot like wishy-washiness when confronted by an aggressive, confrontational ideology like the Republicans espouse. And Obama cannot simply cross his fingers and hope that the "experts" are right when they say that the American economy will just recover by itself and on its own without any further efforts on his part.

Conversations with Great Minds - Bill Moyers

 

It Takes a Movement

by Robert L. Borosage

Huffington Post, June 3, 2011

This is a classic "small d" democratic moment. The economy is in deep trouble -- immediate and long term. Washington is oblivious, compromised by moneyed interests, knotted by ideological divides. It will take an angry and aroused citizens' movement to demand the debate worthy of a great nation in deep trouble.

The dismal jobs numbers only punctuate the reality of an economy that isn't producing sufficient jobs. The crisis is both immediate and long-term. The so-called recovery hasn't begun to recover the jobs lost in the Great Recession. 25 million people are in need of full time work. Home values continue to fall. 25 percent of 17- to 25-year-old high school graduates not in college are out of work. Much of a generation is at risk.

The immediate is only an expression of more profound problems. The middle class was losing ground before the Great Recession. Good jobs are being shipped abroad. Wages aren't keeping up with the costs of basics. The broad middle class that made America exceptional is disappearing. The American dream seems ever more like a nostalgic memory. The nation continues to run unsustainable trade deficits, and must dig out of a mountain of debt -- both public and private. For the first time, an increasing majority of Americans fear their kids won't fare as well as they have.

We need action to put people to work. But short term fixes aren't enough. Americans are looking for a serious strategy that will get us out of the mess we are in.

The Beltway Bloviating

But inside the beltway, Washington is clueless. It's the only major city in the country where housing prices are going up. A flood of corporate lobby money insures that the tables are full at the high end restaurants. Entrenched corporate interests buy a lot more than lunches with their dough. They block vital reforms on health care, energy, trade, Wall Street. They feed off taxpayers, protecting their subsidies and tax dodges, avoiding taxes, while deficits rise and essential programs like nutrition for infants get cut.

The politicians prefer posturing to bold action, "message" and "spin" to leadership. Republicans even with the majority in the House are focused on obstruction. They vote for more tax cuts for the wealthy and corporations, paid for by ending Medicare and Medicaid, hiking costs for those least able to pay -- seniors, the disabled, the dying. They vow to blow up the economy if they can't get a deal on trillions in domestic spending cuts, accompanied by more tax breaks for the wealthy. They're lining their campaign coffers carrying water for the big banks against even minimal reforms.

The adult Republican presidential candidates like Mitt Romney claim they can get the economy going and create jobs. But they only recycle old and failed nostrums. More tax cuts for corporations who are already sitting on over a trillion in cash waiting for customers. More tax cuts for the wealthiest, who already have the most concentrated income and wealth since the eve of the Great Depression. More corporate trade deals that ship goods jobs abroad, undermine wages at home, and force up to borrow over a billion a day from abroad to balance the deficits. Less regulation when we haven't recovered from the catastrophe caused by the excesses of deregulated Wall Street. They pretend they can balance the budget and put people to work by cutting domestic spending, cutting taxes, increasing spending on the military, and not dismantling basic promises like Medicare and Social Security. They and everyone else knows that is a lie.

The White House offers no clear way out. The president wants to hail the successes of an economy that isn't working for most people. Yes, his policies saved us from free fall -- thanks, but we're worried about what we face, not where we've been. He sensibly calls for "winning the future" -- making investments in areas like education, innovation and infrastructure. But he's locked himself into austerity, focused on cuts, and offering no big vision of how we move forward. He's more sensible than the tea party zealots, but remains unwilling to tell Americans what needs to be done and that fight for it.

The Democrats in the Senate are a babble, too divided to deliver a message. The House Democrats are cowed by the losses in 2010, too worried about being accused of being "big spenders" to lay out a course to get the economy going and put people to work.

And few seem ready to put out a strategy that necessarily will take on the interests that are strangling the dream. A national trade strategy that isn't controlled by multinationals. Affordable health care not catering to private insurance and drug companies. Fair taxes that shut down the tax havens, the dodges, the obscene subsidies that drain our resources. An investment strategy that generates vital public and private investment, not more Wall Street speculation, or CEO incentives for laying off workers and plundering their own companies.

It will take a popular uprising to get Washington even to begin to focus seriously on jobs and the economy. We've seen this before. There was a bipartisan consensus on the Iraq War until a growing movement forced first Democrats and then the Bush White House to face reality. The Washington establishment was drunk on slashing Social Security and Medicare to address deficits, and Republicans embraced gutting Medicare, until popular disapproval expressed both in the polls and in the special election in upstate New York sobered them up a bit. The anger expressed by the Tea Party minority still has Republicans in Washington reeling.

Now we need the people to speak again. This time for the American majority. We aren't buying the old conservative elixirs. The New Dem-Republican lite embrace of half measures and conservative cross dressing isn't acceptable.

Washington has to hear a clear message. We elected you to get this economy going, not gut Medicare. We want to know how you will create jobs. We don't want to be served the old tired babble. We know we can't simply cut our way to prosperity. We know we need a major change in our global strategy. We know we've got to make investments vital to the future -- in education and in innovation. We know this economy needs major reforms. Anyone not willing to challenge the corporate interests that are strangling change isn't serious. We know it is hard to focus on creating jobs when deficits are this high. We know we'll have to sacrifice, but we're not broke -- we don't have to break promises to our kids or our parents. And don't ask the victims of this economy to sacrifice when those making out like bandits are given a pass. We know once the economy is moving, taxes have to go up and spending has to be brought under control. So stop the nonsense of no tax hikes. Tell us what you will cut and why. Don't pretend choices don't have to be made.

So lay it out. How do you put people to work, change our economic strategy so we begin once more to make things in America and create good jobs, not poverty wage jobs? How does that relate to getting our books in order and our priorities straight? Give us a debate worthy of a great nation in deep trouble.

In August, after Washington reaches an inevitable deal on lifting the debt limit after weeks of posturing and bluster, of an idiotic debate focused on what to cut rather than how to get the economy going, legislators will return home for recess. They need to hear from us.

 

Follow Robert L. Borosage on Twitter: www.twitter.com/borosage

Eating Fossil Fuels for Breakfast, Lunch, and Dinner

Published on Friday, June 3, 2011 by TomDispatch.com

by Tom Engelhardt

If you didn’t know better, you might think the planet was simply piling on to make a point.  The extreme weather events of the last year have proven little short of biblical.  As a start, 2010 had the dubious distinction of tying 2005 as the hottest year on record and the 34th year in a row with temperatures above the twentieth-century norm. Meanwhile, just to mention a few high (or low) lights of the past year: massive flooding hit the record books when 20% of Pakistan was engulfed, parts of eastern Australia (the size of France and Germany combined) went underwater, and the Mississippi River Valley was turned into Waterworld. 

Then there were fierce droughts and heat waves like the one that, with its associated wildfires, almost burned down Russia last summer, or the one that still has China’s Yangtze River region in its grips, or the “historic” drought and associated wildfires that continue to plague Texas, or the “exceptional dry spell” now settling into northern Europe (and helping send global grain and food prices soaring).

Look northward, and stunned scientists are reporting that anywhere there might be ice -- the arctic, its open waters, the Greenland ice sheets -- it’s melting faster than anticipated (which, of course, means earlier and more sizeable rises in sea levels and greater flooding of island and coastal areas globally).  Peer southward, and the vast Antarctic ice sheet is reportedly experiencing a similar more-rapid-than-expected meltdown.  And keeping to the theme of water, don’t even get me started on the increasing acidification of the oceans and its ensuing dangers.

And now, of course, the American West has been experiencing a record-tyingly fierce tornado season that has yet to end, with damage that beggars the imagination.  And yet if global warming comes up at all in the mainstream media, it’s generally only to argue about whether an event like those tornadoes is (or is not) connected to it -- a question that, at the moment, remains unanswerable and, in some ways, beside the point.  The danger to us from global warming is demonstrably real, a fact emphasized by the most recent record-breaking news: despite all the talk about mitigating it, more fossil-fuel burning led to more carbon dioxide being spewed into the atmosphere in 2010 than at any previous moment in history.

It’s a conundrum.  Our global civilization was built to eat fossil fuels for breakfast, lunch, and dinner, not to speak of those irresistible midnight snacks, while disgorging ever more greenhouse gases into the atmosphere.  And yet if we keep it up at this pace, somewhere not far down the line the adjective “biblical” will seem a paltry enough thing in comparison to the world of Xtreme weather we’ll experience.

Under the circumstances, you would think that all across the globe humanity would be launching the equivalent of Apollo programs not to catapult us to other planets, but to improve, enhance, and make ever cheaper alternative energy systems of every sort.  Instead, despite rare bits of upbeat news, human beings -- and we Americans in particular -- seem hell-bent on insuring that TomDispatch regular Bill McKibben’s remarkable new book, Eaarth: Making a Life on a Tough New Planet, just out in paperback, has an endless shelf life warning us that we now inhabit an all-new, far less hospitable, far more rugged planet of our own making. Meanwhile, as McKibben points out in his latest piece, “Three Strikes and You’re Hot,” the former climate-change presidential candidate Barack Obama is morphing into a “full-on Carbon President.”

© Copyright 2011 Tom Englehardt

Tom Engelhardt, co-founder of the American Empire Project, runs the Nation Institute's TomDispatch.com. He is the author of The End of Victory Culture: a History of the Cold War and Beyond, as well as of a novel, The Last Days of Publishing. His most recent book is The American Way of War: How Bush's Wars Became Obama's (Haymarket Books).

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