California Free Press

Media Blackout: Progressive Budget vs. Paul Ryan (Again)

Published on Thursday, March 29, 2012 by Fairness & Accuracy In Reporting (FAIR)

by Peter Hart

Last year Republican Rep. Paul Ryan presented a budget plan that was, according to one analysis, full of "dubious assertions, questionable assumptions and fishy figures." But Ryan's brand of budget austerity makes the media swoon–hence we saw coverage (FAIR Media Advisory, 4/12/11)  of Ryan's "piercing blue eyes" that dubbed him "a PowerPoint fanatic with an almost unsettling fluency in the fine print of massive budget documents."

Ryan's budget was never going to be adopted, but its release was widely covered across the corporate media. He was given credit for presenting a plan to reduce government deficits, even though his plan didn't really do much of that.

At the same time, the Congressional Progressive Caucus released its People's Budget, which raised taxes on the wealthy, slashed military spending, enacted a public option in healthcare and a Wall Street speculation tax–and unlike Ryan's plan, actually balanced the budget. It got almost no media attention. The most prominent story may have been the attack by Washington Post columnist Dana Milbank (4/13/11), who mocked the "starry-eyed" progressives for, among other things, being poorly dressed and coming up with a name for their plan that "conveyed an unhelpful association with 'the people's republic' and other socialist undertakings."

A year later, we're seeing the very same thing. Paul Ryan has a new budget proposal that looks similar to his last budget. As economist Dean Baker put it:

House Budget Committee Chairman Paul Ryan did a great public service when he released his budget last week. By throwing a piece of total garbage on the table and pretending it is a real budget plan, he allowed us to see who in Washington is serious about the budget and who just says things that will push their agenda.

The corporate media have rushed to cover the garbage. And yesterday the Progressive Caucus released its "Budget for All" plan. And the media reaction so far? According to my search of the Nexis news database, it's exactly one article, by Bay Area News Group reporter Josh Richman (3/26/12).

It's a good one, though–in that it presents the debate in a way that is almost unheard of in the rest of the press: "Two vastly different visions of how the government should spend its money were introduced in Congress this past week."

Richman writes that "most of the national buzz" went to the Ryan plan–then goes on to describe the Progressive Caucus budget clearly:

It not only would end the Bush-era tax cuts, but also create new tax brackets for millionaires and billionaires in keeping with the "Buffett rule." Named after multibillionaire Warren Buffett–who's pushing the agenda–the rule posits that the nation's richest shouldn't pay a lower percentage of income in taxes than less-affluent Americans. It ends what critics call "corporate welfare" for fossil-fuel industries, includes public funding of election campaigns and provides more aid to homeowners facing foreclosure.

Richman adds:

Representatives of Ryan's budget committee didn't return emails or a phone call seeking comment on Honda's budget plan.

The piece closes with this quote from Rep. Mike Honda, who is on the Progressive Caucus'  budget task-force: "If people knew what the choices were, I think they'd say, 'Jesus, the progressive caucus budget looks pretty good.' "

Sadly, most people never will–because the media won't report the choice in the first place.

© 2012 Fairness & Accuracy In Reporting (FAIR)

Peter Hart is the activism director at FAIR (Fairness & Accuracy In Reporting). He writes for FAIR's magazine Extra, and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly" (Seven Stories Press, 2003).

Neurotoxic Pesticides Helping to Decimate Bees Populations, Studies Indicate

Published on Friday, March 30, 2012 by Common Dreams

Two studies show that a class of chemicals known as neonicotinoids created disorientation among bees and caused colonies to lose weight, which may have contributed to a mysterious die-off.

- Common Dreams staff

Two new studies released on Thursday show that industrial pesticides -- specifically chemical neurotoxins called 'neonicotinoids' -- have robust negative impact on the honey bees' ability to navigate and sufficiently reproduce.  Previous studies have shown that insecticides may play a role in 'colony collapse disorder,' a term that describes huge bee die-offs in recent years, the direct and specific cause of which has remained elusive to scientists, but these studies are unique for being conducted in the field as opposed to in laboratory conditions.

A honeybee pollinates a flower in a citrus grove just coming into blossom. (Photograph: David Silverman/Getty Images)

"People had found pretty trivial effects in lab and greenhouse experiments, but we have shown they can translate into really big effects in the field. This has transformed our understanding," Prof David Goulson, at the University of Stirling and leader of one of the research teams told The Guardian. "If it's only one metre from where they forage in a lab to their nest, even an unwell bee can manage that."

One scientist, who lauded the study for its role in furthering understanding of the bees decline, also noted that the study should aware the public that these same chemical pesticides could be having similar impacts on other species as well. "There's a general phenomenon of pollinator decline — bats, bird, butterflies, all kinds of things," he said.

*  *  *

From Science Magazine: Field Research on Bees Raises Concern About Low-Dose Pesticides

Five years ago, bees made headlines when a mysterious condition called colony collapse disorder decimated honey bee colonies in parts of the United States. Now bees are poised to be in the news again, this time because of evidence that systemic insecticides, a common way to protect crops, indirectly harm these important pollinators. Two field studies reported online this week in Science document problems. In bumble bees, exposure to one such chemical leads to a dramatic loss of queens and could help explain the insects' decline. In honey bees, another insecticide interferes with the foragers' ability to find their way back to the hive. Researchers say these findings are cause for concern and will increase pressure to improve pesticide testing and regulation.

*  *  *

Wired.com reports:

Bumblebees exposed to neonicotinoids in a study produced 85% fewer queens per colony and gained 8% to 12% less weight, on average. “If that went on for years, the consequences could be pretty dramatic,” said David Goulson of the University of Stirling in Scotland, who led the study. (David Goulson, University of Stirling / July 31, 2004)

“It’s pretty damning,” said David Goulson, a bee biologist at Scotland’s University of Stirling. “It’s clear evidence that they’re likely to be having an effect on both honeybees and bumblebees.”

Neonicotinoids emerged in the mid-1990s as a relatively less-toxic alternative to human-damaging pesticides. They soon became wildly popular, and were the fastest-growing class of pesticides in modern history. Their effects on non-pest insects, however, were unknown.

In the mid-2000s, beekeepers in the United States and elsewhere started to report sharp and inexplicable declines in honeybee populations. Researchers called the phenomenon colony collapse disorder. It was also found in bumblebees, and in some regions now threatens to extirpate bees altogether.

Many possible causes were suggested, from viruses and mites to industrial beekeeping practices and climate change. Pesticides, in particular neonicotinoids, also came under scrutiny.

Leaked internal reports by the Environmental Protection Agency showed that industry-run studies used to demonstrate some neonicotinoids’ environmental safety were shoddy and unreliable. Other researchers found signs that neonicotinoids, while they didn’t kill bees outright, affected their ability to learn and navigate.

*  *  *

The Guardian report adds:

The pesticides investigated in the new studies - insect neurotoxins called neonicotinoids - are applied to seeds and flow through the plants' whole system. The environmental advantage of this is it reduces pesticide spraying but chemicals end up in the nectar and pollen on which bees feed. Goulson's group studied an extremely widely used type called imidacloprid, primarily manufactured by Bayer CropScience, and registered for use on over 140 crops in 120 countries.

Bumblebees were fed the toxin at the same level found in treated rape plants and found that these colonies were about 10% smaller than those not exposed to the insecticide. Most strikingly, the exposed colonies lost almost all of their ability to produce queens, which are the only bee to survive the winter and establish new colonies. "There was a staggering magnitude of effect," said Goulson. "This is likely to have a substantial population-level impact."

The French team analysed the effect on honey bees of a new generation neonicotinoid, called thiamethoxam and manufactured by Syngenta. They fitted tiny electronic tags to over 650 bees and monitored their activity around the hive. Those exposed to "commonly encountered" levels of thiamethoxam suffered high mortality, with up to a third of the bees failing to return. "They disappeared in much higher numbers than expected," said Henry. Previous scientific work has shown insect neurotoxins may cause memory, learning, and navigation problems in bees.

*  *  *

The Los Angeles Times:

Jeff Pettis of the Department of Agriculture's bee research lab in Beltsville, Md., who wasn't involved in the studies, praised the bumblebee report in particular for highlighting that honeybees aren't the only ones that may suffer from sublethal doses of pesticides. He predicted that the effects on bee reproduction would raise red flags for regulators at the Environmental Protection Agency.

"There's a general phenomenon of pollinator decline — bats, bird, butterflies, all kinds of things," he said. 

Whose Recovery?

by Robert Reich

Friday, March 30, 2012

Luxury retailers are smiling. So are the owners of high-end restaurants, sellers of upscale cars, vacation planners, financial advisors, and personal coaches. For them and their customers and clients the recession is over. The recovery is now full speed.

But the rest of America isn’t enjoying an economic recovery. It’s still sick. Many Americans remain in critical condition.

The Commerce Department reported Thursday that the economy grew at a 3 percent annual rate last quarter (far better than the measly 1.8 percent third quarter growth). Personal income also jumped. Americans raked in over $13 trillion, $3.3 billion more than previously thought.

Yet it’s almost a certainly that all the gains went to the top 10 percent, and the lion’s share to the top 1 percent. Over a third of the gains went to 15,600 super-rich households in the top one-tenth of one percent.

We don’t know this for sure because all the data aren’t in for 2011. But this is what happened in 2010, the most recent year for which we have reliable data, and there’s no reason to believe the trajectory changed in 2011 or that it will change this year.

In fact, recoveries are becoming more and more lopsided.

The top 1 percent got 45 percent of Clinton-era economic growth, and 65 percent of the economic growth during the Bush era.

According to an analysis of tax returns by Emmanuel Saez and Thomas Pikkety, the top 1 percent pocketed 93 percent of the gains in 2010. 37 percent of the gains went to the top one-tenth of one percent. No one below the richest 10 percent saw any gain at all.

In fact, most of the bottom 90 percent have lost ground. Their average adjusted gross income was $29,840 in 2010. That’s down $127 from 2009, and down $4,843 from 2000 (all adjusted for inflation).

Meanwhile, employer-provided benefits continue to decline among the bottom 90 percent, according to the Commerce Department. The share of people with health insurance from their employers dropped from 59.8 percent in 2007 to 55.3 percent in 2010. And the share of private-sector workers with retirement plans dropped from 42 percent in 2007 to 39.5 percent in 2010.

If you’re among the richest 10 percent, a big chunk of your savings are in the stock market where you’ve had nice gains over the last two years. The value of financial assets held by Americans surged by $1.46 trillion in the fourth quarter of 2011.

But if you’re in the bottom 90 percent, you own few if any shares of stock. Your biggest asset is your home. Home prices are down over a third from their 2006 peak, and they’re still dropping. The median house price in February was 6.2 percent lower than a year ago.

Official Washington doesn’t want to talk about this lopsided recovery. The Obama administration is touting the recovery, period, without mentioning how narrow it is.

Republicans would rather not talk about widening inequality to begin with. The reverse-Robin Hood budget plan just announced by Paul Ryan and House Republicans (and endorsed by Mitt Romney) would make the lopsidedness far worse – dramatically cutting taxes on the rich and slashing public services everyone else depends on.

Fed Chief Ben Bernanke – who doesn’t have to face voters on Election Day – says the U.S. economy needs to grow faster if it’s to produce enough jobs to bring down unemployment. But he leaves out the critical point.

We can’t possibly grow faster if the vast majority of Americans, who are still losing ground, don’t have the money to buy more of the things American workers produce. There’s no way spending by the richest 10 percent – the only ones gaining ground – will be enough to get the economy out of first gear.

Break Up The Big Banks, Says the Dallas Fed

by Robert Reich

Thursday, March 29, 2012

As the Supreme Court shows every sign of throwing out “Obamacare” and leaving 30 million Americans without health insurance, another drama is being played out in the quiet corridors of the Federal Reserve system that may affect even more of us.

Taxpayers will be on the hook for another giant Wall Street bailout, and the economy won’t be mended, unless the nation’s biggest banks are broken up.

That’s not just me talking, or the Occupier movement, or that wayward executive who resigned from Goldman Sachs a few weeks ago. It’s the conclusion of the Dallas Federal Reserve, one of the most conservative of the Fed’s regional banks.

The lead essay in its just released annual report says a cartel of giant banks continues to hobble the recovery and poses an ongoing danger to the economy.

Wall Street’s increasing power remains “difficult to control because they have the lawyers and the money to resist the pressures of federal regulation.” The Dodd-Frank act that was supposed to control Wall Street “leaves TBTF [too big to fail] entrenched.”

The Dallas Fed goes on to argue that the Fed’s easy money policy can’t be much help to the U.S. economy as long as Wall Street is “still clogged with toxic assets accumulated in the boom years.”

So what’s the answer, according to the Dallas Fed? It’s “breaking up the nation’s biggest banks into smaller units.”

Thud. That’s the sound the report hitting the desks of Wall Street executives. They and their Washington lobbyists are doing what they can to make sure this report is discredited and buried. 

When I spoke with one of the Street’s major defenders in the Capitol this morning he snorted “Dallas represents small regional banks that are jealous of Wall Street.” When I reminded him the Dallas Fed was about the most conservative of the regional banks and knew first-hand about the dangers of under-regulated banks — the Savings and Loan crisis ripped through Texas like nowhere else — he said “Dallas doesn’t know its [backside] from a prairie gopher hole.”

So as Republicans make the repeal of “Obamacare” their primary objective (and Alito, Scalia, Thomas, Roberts, and perhaps Kennedy sharpen their knives) another drama is taking place at the Fed. The question is whether Bernanke and company in Washington will heed the warnings coming from its Dallas branch, and amplify the message.

Healthcare Jujitsu

by Robert Reich

Monday, March 26, 2012

 

Not surprisingly, today’s debut Supreme Court argument over the so-called “individual mandate” requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a “tax,” and the question of whether the issue is ripe for review.

Behind this judicial foreplay is the brute political fact that if the Court decides the individual mandate is an unconstitutional extension of federal authority, the entire law starts unraveling.

But with a bit of political jujitsu, the President could turn any such defeat into a victory for a single-payer healthcare system – Medicare for all. 

Here’s how.

The dilemma at the heart of the new law is that it continues to depend on private health insurers, who have to make a profit or at least pay all their costs including marketing and advertising.

Yet the only way private insurers can afford to cover everyone with pre-existing health problems, as the new law requires, is to have every American buy health insurance – including young and healthier people who are unlikely to rack up large healthcare costs.

This dilemma is the product of political compromise. You’ll remember the Administration couldn’t get the votes for a single-payer system such as Medicare for all. It hardly tried. Not a single Republican would even agree to a bill giving Americans the option of buying into it.

But don’t expect the Supreme Court to address this dilemma. It lies buried under an avalanche of constitutional argument.

Those who are defending the law in Court say the federal government has authority to compel Americans to buy health insurance under the Commerce Clause of the Constitution, which gives Washington the power to regulate interstate commerce. They argue our sprawling health insurance system surely extends beyond an individual state.

Those who are opposing the law say a requirement that individuals contract with private insurance companies isn’t regulation of interstate commerce. It’s coercion of individuals.

Unhappily for Obama and the Democrats, most Americans don’t seem to like the individual mandate very much anyway. Many on the political right believe it a threat to individual liberty. Many on the left object to being required to buy something from a private company.

The President and the Democrats could have avoided this dilemma in the first place if they’d insisted on Medicare for all, or at least a public option.

After all, Social Security and Medicare require every working American to “buy” them. The purchase happens automatically in the form of a deduction from everyone’s paychecks. But because Social Security and Medicare are government programs financed by payroll taxes they don’t feel like mandatory purchases.

Americans don’t mind mandates in the form of payroll taxes for Social Security or Medicare. In fact, both programs are so popular even conservative Republicans were heard to shout “don’t take away my Medicare!” at rallies opposed to the new health care law.

There’s no question payroll taxes are constitutional, because there’s no doubt that the federal government can tax people in order to finance particular public benefits. But requiring citizens to buy something from a private company is different because private companies aren’t directly accountable to the public. They’re accountable to their owners and their purpose is to maximize profits. What if they monopolize the market and charge humongous premiums? (Some already seem to be doing this.)

Even if private health insurers are organized as not-for-profits, there’s still a problem of public accountability. What’s to prevent top executives from being paid small fortunes? (In more than a few cases this is already happening.)

Moreover, compared to private insurance, Medicare is a great deal. Its administrative costs are only around 3 percent, while the administrative costs of private insurers eat up 30 to 40 percent of premiums. Medicare’s costs are even below the 5 percent to 10 percent administrative costs borne by large companies that self-insure, and under the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

So why not Medicare for all?

Because Republicans have mastered the art of political jujitsu. Their strategy has been to demonize government and seek to privatize everything that might otherwise be a public program financed by tax dollars (see Paul Ryan’s plan for turning Medicare into vouchers). Then they go to court and argue that any mandatory purchase is unconstitutional because it exceeds the government’s authority.

Obama and the Democrats should do the reverse. If the Supreme Court strikes down the individual mandate in the new health law, private insurers will swarm Capitol Hill demanding that the law be amended to remove the requirement that they cover people with pre-existing conditions.

When this happens, Obama and the Democrats should say they’re willing to remove that requirement – but only if Medicare is available to all, financed by payroll taxes.

If they did this the public will be behind them — as will the Supreme Court.

 

Higher Energy Prices Are Here To Stay: A Look At Denmark's Clean Energy Plan, World Energy Sources, Demand And U.S. Policy Implications

by Frank Thomas

INTRODUCTION 

Energy industry experts, researchers within the Congressional Research Service (CRS) the U.S. Energy Information Agency (EIA) have been publishing truly excellent reports dissecting and forecasting global fuel mix, growth and prices. These energy outlook analyses are vital to the debate on sustainable, secure energy sources. But, such detailed studies fall short in generating a Wake-Up call to the urgency of new thinking to achieve energy independence from imports and polluting fossil fuels – and emphasizing how this goal is affected by the broader world energy market supply-consumption balance among key countries, the finite sustainability of fossil fuel energy use, particularly oil, and environmental risks, including drilling in deeper and deeper waters.

The choices we make in fuel mix and in producing, importing,  consuming energy involve severe technical, economic, and ecological constraints. The strategic implications of those choices remain a mystery to most people. This information void applies, for example, to the world forces pushing fuel prices to ever higher support levels despite modest growth in demand for gasoline. Who or what is to blame? No one has a clear explanation. Public speculations and anger abound over the consistent upward path of gasoline  prices, now at an average U.S. price of $4.00 per gallon and ±$100 per crude oil barrel. Ongoing oil price increases to at least $150/barrel by 2020 and $200/barrel by 2030 are more than just likely.

Demand and sustainability are key to understanding the stark reality that the trend of rising fossil fuel costs – households now spend 10% on energy, mostly on fossil fuels – is irreversible. Little wonder escalating fuel prices, an oil import dependence that accelerates colossal trade deficits, and high CO₂ emissions from oil and coal are fueling uncertainty about future energy supply developments and the potential of devastating  ecological/environmental damage. U.S. domestically produced oil/gas supply shortages, technological advances, and ballooning fuel prices are driving offshore drilling to more  difficult, deeper waters of 800 - 1,000 meters or more … where development risks are exponential, where actual increases to total proven reserves from major offshore finds have been relatively modest in recent years. That is why world oil reserves are being depleted faster than the number and size of new offshore fields discovered … another subtle pressure on fuel prices.

Oil companies thrive on high pump prices that deliver the profits needed to pursue high-cost projects in high-risk offshore waters. This also adds to public cynicism and confusion about the right mix of renewable and traditional energy exploitation policies, their long-term effect on economic development and climate change in the context of transitioning to a clean, secure energy economy. 

The key issue explored in this paper is that the cost of fossil fuels, especially oil, and total energy consumption are certain to rise significantly the next two to three decades. This means the cost differential of transitioning to alternate green fuels is fast becoming marginal. And that is why Denmark is on a mission to remove carbon-polluting fossil fuels entirely by 2050 without introducing nuclear energy (coal power combined with carbon storage is an option but is not yet commercially feasible or environmentally friendly).

Other factors pushing fossil fuel prices ever higher include the composition of oil, natural gas, and coal supplies by country – the growing rejection of nuclear – and increasing concentration of oil/gas supplies in a few countries. These macro-factors also give commodity speculators and hedge fund investors a perfect playing field to apply their manipulative commodity shorting/longing trading expertise to milk the system – and to Hell with the rest of society!

The central theme in this paper is that there is a strategic necessity to make faster development of alternative green energy production an urgent national priority. The oil industry has no fiduciary or corporate responsibility to aggressively develop commercial alternatives to fossil fuels. U.S Government policy of getting out of the way of the oil industry – combined with generous subsidies, tax reduction gifts – and not participating as an active partner ( ^e.g. Norway’s example of a state oil company) has led us to the energy dependence we have today. Denmark and Germany realize this, but we still don’t.  

DISCUSSION

PART I:   Sustainability and Denmark´s Road to Fossil Fuel Independence

William Catton in his book, “Overshoot” defines sustainability as follows: 

“A sustainable process or state is one that can be maintained at a certain level indefinitely. It should provide optimal conditions for ALL organisms affected by it and not threaten, even indirectly, the viability of any organisms. … The current level of human activity is unsustainable. That it has been at all is due to the use of fossil fuels, a non-sustainable resource, whose use is by definition unsustainable.”

Denmark and Germany have accepted the reality message behind this definition. They have resisted  the temptation to consider renewable green energy sources as merely a modest and not a dominant contributor of net energy supplies. While the world population is still growing , though more slowly, these two countries realize the Earth’s oil and gas resources are severely limited and that carbon storage and pollution from coal are an environmental nightmare.    

These two countries recognize that the Earth's ability to absorb global warming emissions of ±7 billion tons of carbon dioxide annually from fossil fuels is also limited and very costly. These two countries are getting behind the lifestyle changes and potential net savings of investing heavily in clean, sustainable wind, biomass, and solar energy. As everyone knows, Germany has decided to phase out its nuclear plants. Denmark has no nuclear plants.                        

This brings me to a brief overview of Denmark´s remarkable societal unity and pioneering commitment to a 100% clean, sustainable energy economy. For a detailed description of Denmark’s plan to convert to renewable, clean energy, see   “Energy Strategy 2050,” The Danish Government, Feb. 2011. The Danish define independence from fossil fuels as producing sufficient renewable energy to cover at least 100% of energy demands in 2050.  This would meet a EU policy goal of reducing greenhouse gas emissions 80% by 2050 vs. 1990 emissions. Renewables cover 29% of total electrical production today. Tables 1 and 2 reveal the sheer audacity of Denmark’s accelerated path to renewable energy.      ______________________________________________________________                                                     TABLE  1 :  DANISH GROSS ENERGY CONSUMPTION IN 2050 

                                           Petajoule (PL) Per Year

                                  FOSSIL FUELS                  NON FOSSIL FUELS

                             2008          2050 (1)           2050 (2)          2050 (3)

                                           (unambitious climate policy)      (ambitious c.p.)   

Oil                            292                210                 0                   0

Natural Gas               149                 79                 0                   0

Coal                         187                272                 0                   0

Fossil Fuels             628 = 80%    561 = 64%     0                   0

Solid Biomass             84                 99               433               124

Biogas, Waste            44                 76                 82                 76

Wind                          25                 74               136               265          

Photovoltaics, Wave     0                   0                  0                  15

Heat Pumps                 6                  67                59                 77

Solar, Geothermal        1                   3                10                  25

Renewable Fuels   160 = 20%   319 = 36%   720 = 100%  582 = 100%

Grand-Total             788               880             720               582 

Source: Denmark’s Road Map for Fossil Fuel Independence, July 2011; Energy Strategy 2050, The Danish Government, Feb. 2011

Remarkably, Denmark already produces 20% of its total energy needs from renewables versus 8% for the U.S. today. Denmark will increase this percentage to 33% by 2020, meeting the EU 2020 target of 30% comprising wind, biomass, biogas, biofuels, solar. The above range of gross energy consumption mixes in 2050 under different energy scenarios are calculated to meet expected energy  demand in 2050 of 600-700 petajoule (PL) per year.                                                                                                   

Alternative 1 assumes continued use of fossil fuels. Alternative 2 assumes elimination of fossil fuels. Both scenarios assume an “Unambitious” international climate policy, ^i.e. that rates of CO₂ emissions reduction will remain essentially unchanged and fossil fuel scarcity continues to push energy prices higher. Unambitious emissions reduction policies are assumed to result in moderate prices for biomass and CO₂.                                                      

Alternative 1, is a possible but less attractive scenario. It includes the combining of less renewables and much coal with carbon capture and storage (CCS). Alternative 2 assumes an aggressive expansion of biomass  and wind energy sources where prices are expected to be low. Biomass production used in the energy system in 2050 is limited to relatively the same sustainable food production amount and agricultural area as exist today. Biomass will grow in relation to its price competitiveness with other renewable energy sources.                                                              

Alternative 3 represents Denmark’s ideal scenario to eliminate fossil fuel use under an “Ambitious” international climate policy that restricts rates of atmospheric carbon levels to 450 parts per million, ^i.e. limiting human-caused global warming to within 2 degrees C. This requires western nations to reduce 1990 net greenhouse gas emissions by at least 80% by 2050. Under ambitious emissions reduction policies, it is assumed fossil fuel prices will rise more slowly while biomass and CO₂ prices will increase.  A 25% reduction in total energy consumption by 2050 is predicted and comes from significant energy efficiency improvements , ^e.g. broad deployment of efficient cost-effective heating pumps, and substantial rises in wind and solar supplies.                                                 

For all alternatives, wind and biomass play a crucial role as does a broad range of cost-effective energy efficiency initiatives including for example:      

• raising the energy savings target energy firms must implement for their customers by 50% starting in 2013 and by 75% during 2017-2020                        
• tightening building codes, energy standards, ^e.g. renovation of buildings
• implementing an intelligent energy network and electric meters
• phasing out of oil and gas furnaces, no installations starting 2017
• converting to electric vehicles and 2050 goal that vehicles and average home are using 29% and 40%, respectively, of energy used today                          
• deploying heat pumps for individual, district, and industrial heating  
• providing financial incentives for wind energy through cooperatives
• While costs of heat and electricity will rise moderately, homeowners will be given the opportunity to lower energy costs by greater efficiency. A broad range of renewable energy initiatives will not only promote more efficient energy use but will also encourage a switch to biomass in power plants of cities and increase the consumption of renewable energy.

Denmark’s path to fossil fuel independence along with an 80% reduction in net greenhouse gas emissions by 2050 is ambitious and smart. The near-term goal to double electricity from renewables by 2020 is impressive if achieved. 

TABLE 2 : Denmark’s % Share of Renewables in Electricity Production, 2009 Compared to 2020 Goal

__________________________________________________                                                     

                                    2009                       2020

Fossil Fuels                      71%                         38%

Wind                               19%                         42%

Biomass                          10%                         20%

Total                              100%                       100%                                         

Source:  Danish Energy Agency; Energy Outlook 2012 by EIA

_________________________________________________________________                                                                  

A spectacular 62% of electricity generation is expected from renewable sources by 2020, largely wind and biomass. The doubling of wind capacity to the 42% goal of electricity generation will come from construction of new offshore wind turbines at the Kriegers Flak wind farm, coastal wind turbines, and land-based turbines. Wind energy will go from a 3 GW capacity now to a 10 GW to 18 GW by 2020-2050. More intensive energy efficiency efforts will reduce gross energy consumption by 6% in 2020 compared to 2006, increasing to 25% by 2050 assuming an “Ambitious” international climate policy.    

The Danish are not waiting to learn that fossil fuels are a finite global resource. Protecting future energy security and reducing greenhouse gas emissions are driving Denmark’s transition to a new energy strategy, NOW. The country’s planning for fossil fuel independence is thorough, covering  all contingencies    – a far cry from our seemingly “business as usual” market approach to energy supply security, environment, and financing policy initiatives. Danish clean energy investments will be offset by lower fossil fuel expenditures and CO₂ reductions and a proposed security of supply tax. Denmark’s Commission on Climate Change Policy sums up the gradual increased pressure on public budgets as the result of tax revenues lost by reduced use of fossil fuels as follows:

“The government’s objective is to be independent of fossil fuels. This has the effect, that fossil fuels that are highly taxed will be replaced by other, more environmentally friendly types of energy        taxed at a lower rate and in some cases tax exempt. In order to offset this detrimental effect on tax revenues, other energy taxes may be increased, provided the overall tax burden is not increased.”

SUMMARY

A Danish research team put in perspective the cost of Denmark’s visionary conversion to renewable energy quite well:

“It may seem surprising that the total phase out of oil, gas, and coal use will not involve large costs for society in the long term. However, there are several reasons for this: Firstly, transition of the energy system will take place gradually over a long period of time (just as Denmark has done by starting with wind energy in 1970 to now being the world leader in this electrical energy source), so that existing capital stock (infrastructure) will be exploited. Secondly, over this time period, an increased global demand for energy will make traditional alternatives to renewable energy sources still more expensive. Simultaneously, technological development will gradually make many renewable energy sources more competitive and emission reduction targets will have a cost if Denmark continues to use fossil fuels. Finally, total expenditure on energy services constitutes only a minor 5-6% share of GDP in 2050 under all scenarios. Thus, although total expenditure on energy services rises about 5% because of the transition to fossil fuel independence, the cost measured as a % of GDP decreases in significance.” 

PART II.  Strategic Policy Implications of U.S. Energy Supply, Demand, Price Trends, and Concentration of World Supplies 

To be continued …

Paul Ryan's "Focus on Dignity" is a Spectacle of Greed and Cruelty

Published on Friday, March 23, 2012 by The Nation

by Greg Kaufmann

“Promoting the natural rights and the inherent dignity of the individual must be the central focus of all government.”

House Budget Committee Chairman Rep. Paul Ryan, R-Wis., holds up a copy of his budget plan entitled "The Path to Prosperity," Tuesday, March 20, 2012, during a news conference on Capitol Hill in Washington. (Jacquelyn Martin, Associated Press)

That’s what Congressman Paul Ryan wrote earlier this month in an exclusive commentary for Spotlight on Poverty and Opportunity. This week, he revealed exactly where his laser-like focus on dignity would lead this nation. He released his budget proposal, as clear a statement of one’s principles and priorities as there is in politics.

Here are the results, and they’re not pretty. Nation readers with young children should probably ask them to leave the room before reading onward.

Mr. Ryan’s focus on dignity… means a cut in food stamps of $133 billion over ten years, even though 76 percent of participating households include a child, senior or disabled person, nearly half of all recipients are children and 40 percent of single mothers use food stamps to help feed their families. It translates to as many as 2.2 trillion meals lost for low-income people, more kids at risk of being underweight or developmentally delayed, worse educational outcomes and more stressed-out parents.

The congressman would also block-grant the program so it would no longer be able to respond to rising need during times like these—in 2010 alone food stamps kept 3.9 million people out of poverty. If you liked the cash assistance for poor families (TANF) block grant—which resulted in a free-fall from 68 of every 100 poor families receiving help to 27 of every 100—then you will absolutely love the Don’t Worry Ryan Will Feed You block grant.

All told, Ryan hands out about $4.4 trillion in tax cuts that primarily benefit the very best off, and pays for it with $4.15 trillion in spending cuts to programs that primarily benefit the poor and middle class.

Mr. Ryan’s focus on dignity… means the repeal of the Affordable Care Act and attacking Medicaid with his block-granting light saber. The repeal results in at least 33 million people losing their healthcare, and the Don’t Worry Ryan Will Heal You block grant shifts costs of covering poor people to the states (because their budgets are in such great shape)—cutting federal funding by approximately 20 percent over the next decade and adding “tens of millions of Americans to the ranks of the uninsured and underinsured,” according the Center on Budget and Policy Priorities (CBPP). Worth noting too is that two out of every three Medicaid dollars currently goes to care for people in nursing homes, victims of catastrophic accidents and disabled children, according to the Center for American Progress.

Mr. Ryan’s focus on dignity… means reneging on the already austere discretionary spending level just passed by Congress during the deficit ceiling debacle so that the Congressman can lower it by another $19 billion. He would further squeeze spending on programs such as WIC, Head Start, affordable housing, heating and cooling assistance, childcare assistance, education, public health. Defense, however, would receive $203 billion more than the Pentagon itself is asking for over the next decade (at the expense of cuts to programs that veterans disproportionately rely on).

“Non-defense discretionary spending is already on a path to be at the lowest level it’s been since the Eisenhower administration and the House GOP budget is talking about cutting it by an additional 25 percent,” said Melissa Boteach, director of Half in Ten, a campaign to reduce poverty by 50 percent over ten years.

Mr. Ryan’s focus on dignity… means knowing the poor and vulnerable will be hit and hit hard, but not being entirely sure how and where. Jim Horney, vice president for federal fiscal policy at CBPP, says the congressman’s $1.2 trillion in unspecified cuts to “non-health mandatory” programs amount to a “massive hidden” cut to the safety net.

“You cannot achieve those savings without making very deep cuts in the crucial safety-net programs in this category, such as…Supplemental Security Income for the elderly and disabled poor, Temporary Assistance for Needy Families (TANF), the school lunch and other child nutrition programs, and unemployment insurance,” writes Horney.

Mr. Ryan’s focus on dignity… means not only extending the Bush tax cuts for the wealthy but handing them an additional $3 trillion in tax cuts to boot. If he just extended the Bush tax cuts, but nixed the Don’t Worry Rich People, Ryan Loves You additional tax cuts—that alone would pay for the repeal of the Affordable Care Act, the Medicaid cuts, the SNAP cuts and domestic discretionary spending cuts.

All told, Ryan hands out about $4.4 trillion in tax cuts that primarily benefit the very best off, and pays for it with $4.15 trillion in spending cuts to programs that primarily benefit the poor and middle class.

“The inherent dignity of all people is the foundational principle of Catholic social teaching because we’re all created in the image of God,” Father Thomas Kelly, a constituent of Representative Ryan’s, told me after a conference call with Half in Ten. “A budget that cuts nutrition programs for poor children and tells working families they must sacrifice even more so the wealthy can have bigger tax cuts offends bedrock Catholic values. It’s hard to square Representative Ryan’s moral rhetoric with the cruel reality of this budget.”

“A budget that diminishes what we provide for the one in six Americans who are struggling with hunger is not a budget befitting a moral country,” said Rabbi Steve Gutow, president of the Jewish Council for Public Affairs. “A plan reflective of our national priorities should seek to lift up our neighbors in a time of high unemployment and poverty; instead, this demands the most from those with the least, and flies in the face of the common dignity of all Americans.”

Mr. Ryan’s focus on dignity… means that the man is in desperate need of LASIK surgery. Better hurry, before he’s forced to rely on his proposed Don’t Worry Ryan Will Give You A Voucher healthcare system for seniors.

Read the full article with additional resources at The Nation.

© 2012 The Nation

Greg Kaufmann is a Nation contributor. His column, This Week in Poverty, posts every Friday morning. His work has also appeared on Common Dreams, AlterNet, Tikkun.org, NPR.org, CBS News.com, and MichaelMoore.com. Constructive comments and ideas will also be read at [email protected]. Please follow him on Twitter as well.

Lockheed: The Ultimate Pay-to-Play Contractor

By Dina Rasor, Truthout | Solutions

Thursday, 22 March 2012 10:01

Loren Thompson is one of those people in Washington, DC, circles that wears several hats. He is the chief operating officer for the nonprofit Lexington Institute, a think tank that promotes defense contractors and large Pentagon budgets, and is also chief executive officer of Source Associates, a for-profit consultancy that advises defense contractors. He also writes opinion pieces for AOL Defense that are also posted on the Lexington Institute web site. Although the Lexington Institute does not disclose its donors on their web site, Thompson does disclose that the Institute receives funding from Pentagon defense contractors. (The founder of the Lexington Institute, James Courter, was a lobbyist for Lockheed in 2000.)

He is an unabashed promoter of Pentagon contractors and wrote a disturbing article this week for AOL Defense talking about how Lockheed has not only survived the most recent defense cuts, but actually has set itself up to be the most successful defense contractor despite the cuts. He hints at what most of us already suspect - that Lockheed has a lock hold on a large portion of the Department of Defense (DoD) budget and has set itself up to have undue influence over government decisions.

However, in classic Washington-speak rationalizations, he insists that it is because Lockheed is a better-run company than most and dismisses that it is because they are, and have been for a long time, one of the most successful pay-to-play operators on Capitol Hill and in the Pentagon. From his recent article:

If you are one of those people who believes the various conspiracy theories making the rounds about Lockheed Martin's excessive influence over government decisions, the Pentagon's fiscal 2013 budget request probably won't make you feel any better.

Having served as an advisor to Lockheed and many of its competitors for a long time, I don't take the conspiracy-mongering very seriously because I frequently see up close how frustrated company executives get with their military customer. However, I have to admit I was surprised at how well the nation's biggest military supplier made out in the Obama Administration's reordering of Pentagon priorities....

Lockheed Martin is poised to be by far the biggest beneficiary of the new military spending priorities articulated by the Obama Administration. It has lost little in the trade-offs leading up to the budget release and it is actually gaining ground from the setbacks dealt its rivals. Termination of Northrop Grumman's Global Hawk Block 30 unmanned aircraft will result in the Air Force relying on Lockheed Martin's U-2 spy plane for decades to come....

Besides being better at execution than many of its competitors, Lockheed Martin has also done a very good job of positioning itself in the military marketplace. Company executives didn't over commit their business mix to short-lived opportunities like military transformation and stability operations, preferring instead to concentrate in areas where Lockheed traditionally excelled such as military space and naval electronics. Thus, Lockheed Martin is less exposed as the military customer begins shifting back to the investment priorities that prevailed before 9-11. It has also been aggressive in cutting costs since the first signs of softness in military demand began to appear.

So even though Lockheed's revenues are not expected to grow much in the years ahead unless it diversifies or buys other defense companies, its profit margins have strengthened across all major business units. Some observers will interpret this trend as further evidence that Lockheed Martin has a special relationship with its government customer. Investors are likely to conclude it is just better run than its competitors.

It is ironic that he claims that Lockheed has been aggressive in cutting costs with the so-called soft defense budget. They may have been cutting their costs internally without the government's knowledge, but they certainly are sticking it to the Pentagon with massive cost overruns for their new plane, the F-35. They know that they have the DoD over a barrel despite the overruns because they will soon be the only company that builds the Pentagon fighter planes.

The Government Accountability Office (GAO) has just released a report about that the overruns in the newly configured F-35 and, according to Reuters, the "first four procurement contracts were more than $1 billion over budget combined, with the government to cover about $672 billion of the cost and Lockheed to cover the rest. The government also faced $373 million in retrofit costs to fix deficiencies discovered in testing on planes already produced."

This will cause the Pentagon to get fewer planes for more money - the classic "more bucks, less bang" problem that has plagued defense spending for years. The Air Force secretary claims that they will get tough with Lockheed in the future. Secretary Michael Donley, "told the Senate Armed Services Committee that the F-35 program office and Lockheed had been told there was 'no more money to put against contract overruns or problems.'" This will be a hard promise to keep because the Lockheed influence machine will soon crank into gear to get more and more money as the problems of the F-35 continue to plague this fighter - you can bet that the government will pay for most of the mistakes of this on-going fighter plane disaster.

However, Mr. Thompson tries to make us believe that this powerful Lockheed pay-to-play machine is just airy conspiracy theories. As they say in sports broadcasting, let's go to the stats. According to Sunlight Foundation databases, since 1989, Lockheed has:

• Given $23,097,580 in campaign financing.
• Spent $125,580,880 on lobbying and hiring some of the biggest Republican and Democratic lobby firms in Washington.
• Received $20,180,000 in earmarks.
• Received 31 grants and 15,358 contracts from the federal government.
• Had 257 of their people on 135 government advisory committees.

And, despite Mr. Thompson's glowing view of the management of Lockheed, according to the Project on Government Oversight's Contractor Misconduct Database , Lockheed has had 66 instances of contractor misconduct, making them No. 1 on the list of errant federal contractors. And they have had 12 Environmental Protection Agency enforcement actions.

Mr. Thompson may claim to see the great management of Lockheed on the inside. but I have done hand-to-hand combat with Lockheed and their abuse and fraud over the years. I revealed an Air Force memo on one of their plane's estimated overruns that forced them to suspend their stock trading for a day, exposed an illegal and extremely collusive plan to lobby the Congress with the Air Force and the DoD to sell another run of the notorious C-5 cargo plane (see this Solutions column, uncovered their selling of a $7,622 coffee brewer and other outrageous spare parts to the Pentagon, been threatened by Lockheed attorneys to put me in jail for refusing to reveal my sources within their company (they lost), gone through 250,000 documents in a whistleblower lawsuit that showed they were mischarging timecards and cheating the government, and have had to deal with this company threatening their employees and DoD personnel who wanted to tell the truth about their management. One of their whistleblowers in the past had to have federal marshals protect him and his family when there were threats to throw acid in his daughter's face.

So, I know the true character and corporate climate of this company from an up-close-and-personal view to know that their real game is to soak an often willing Pentagon for every dime they can while delivering problem-plagued weapons that they then get to fix with government money. Lockheed is still the best pay-to-play company in the government and continues to lobby in collusion with the Pentagon for their weapon systems such as the F-22 fighter as outlined in William Hartung's book, "Prophets of War."

My biggest frustration after years of exposing their frauds and outrages is that they get away with it by just paying the fines to a complacent federal government and continue to just go about business as usual. They can get away with it more than any other DoD company I know because they do invest by making large payments for pay to play with campaign contributions, and snatching the most influential former government employees as they twirl through the revolving door out of government services. They have mastered the art of the Washington fix despite the fact that they have the largest misconduct rate.

Their corporate motto says it all. "We never forget who we're working for." That is supposed to make the public think it is the taxpayer and the soldier, but it really is code because the "who" are their executives with high salaries, their stockholders and members of their board. The statistics above and their sordid history of influence peddling with large sums of money make sure that the submissive DoD and other parts of the federal government will continue to walk into their corporate lair. But how can we truly discipline them or suspend them when they now have cornered the government as the sole manufacturer of our fighter fleet? It will be interesting to see if they can keep this advantage if the budget sequestration goes through and more defense spending is to be cut ... seriously cutting their budget may be the only way to keep them from shafting the government as they have been doing for decades.

Once again, it appears that the only successful reforms that will work here are to slam the revolving door shut and keep their money out of the hands of a willing Congress.

Despite my frustrations of past exposés, I will continue to expose them whenever Mr. Thompson continues to pretend that their success is due to their great management for the government.

This article is a Truthout original.

Republican Paul Ryan's Tax Plan: Out-Reaganing Reagan

by John Lawrence

Republican Congressman Paul Ryan has laid out a new budgetary plan for the US, part of which is his plan for lowering taxes (on the rich), something that Republicans have been consistently doing with a vengeance since the days of Ronald Reagan. (See "How Republican Presidents Lowered Taxes on the Rich" Parts 1 and 2.) As pointed out in Part 1, Reagan "flattened" the tax code by reducing it down to just two tax rates just as Paul Ryan is proposing, but Ryan is taking it one step further than even Reagan dared to do. Reagan's tax code called for two rates of 15% for married couples filing jointly with (inflation adjusted) incomes up to $56,427. Ryan wants to lower that to 10% for incomes up to $100,000. Also Ryan wants to lower Reagan's tax rate on high earners from 28% to 25% for incomes over $100,000. Right now there are six tax brackets which were set by the Bush tax cuts. They can be found in Part 2. Of those Ryan's plan would give a tax break to the upper five tax brackets. The only tax bracket that wouldn't get a break under Ryan's plan would be the lowest one which is the tax bracket for the poor (naturally). Their tax rate would remain at 10%.

So there is nothing new and revolutionary here. It's just the same old story: lower taxes on the rich and raise them or keep them the same for the poor. In addition Ryan wants to eliminate capital gains taxes entirely which are the taxes which most rich people pay since most of their income is in capital gains. Even Ronald Reagan who lowered the capital gains tax from 28% to 20% didn't have the audacity to do that! During the Clinton years capital gains taxes were raised back up to 28% and 29%. This was largely responsible for the fact that Clinton's budgets in the later years of his Presidency produced a budgetary surplus. When Bush came in in 2000, capital gains taxes went back down to 15%, even lower than Reagan's audacious move. This is largely responsible for the fact that Bush drove up the deficit and the debt to record proportions. Obama has not been able to move tax rates on the rich back up to where they were under Clinton. This is why Obama has continued to run record deficits. He is still operating under the Bush tax rates. It's not for Obama's lack of trying. You can blame the Republican controlled House and the filibuster rule, which killed Obama's legislative proposals even when Democrats controlled both Houses of Congress, for that.

While Ryan's plan would devastate Federal government revenues by lowering taxes on the rich through both income tax and capital gains tax cuts, his proposal for corporate tax cuts would provide the death knell for revenues which would usher in an age of extreme austerity for average American citizens because none of the social programs which provide for the poor, the sick and the elderly would have a prayer of survivng. Ryan wants to eliminate the corporate income tax entirely replacing it with a "Business Consumption Tax" of 8.5%. The current corporate income tax, which hardly any corporations actually pay, is 35%. Even with the current rate corporate taxes provide a drastically decreased portion of Federal revenues compared to what they provided just a few years ago. In 2010 corporate income taxes provided just 9% of Federal revenues whereas  in 1960 corporate income taxes provided 23% of Federal revenues. In the 1950s it was even more - 28%.

Ryan's Business Consumption Tax is similar to a VAT tax which is common in Europe. This might make some kind of sense if it applied to imports and not just domestically produced products as it does in Germany. This tends to encourage domestic production and consumption and decrease imports. However, Ryan's rate of 8.5% is ridiculously low. In Germany the VAT tax is 19%!!

During the 1960s, the United States consistently raised nearly 4 percent of GDP in corporate revenue. During the 1970s, the total was still above 2.5 percent of GDP. Now, the U.S. raises less than 1.5 percent of GDP from the corporate income tax. As the Congressional Research Service put it, "Despite concerns expressed about the size of the corporate tax rate, current corporate taxes are extremely low by historical standards." [Read the U.S. News debate: Should the U.S. adopt a flat tax?]

Ryan's plan to eliminate the corporate income tax rate entirely would be a disaster for the US. Instead, the loopholes should be eliminated so that corporations contribute 20%-30% of Federal revenues as they did in the 1950s and 60s. What has happened since 1980 is that Federal revenues have depended more and more on taxes collected from the poor and middle class as FICA and SECA (payroll) tax rates which are regressive have been raised while capital gains and corporate taxes have been either formally or effectively reduced.

 

The Republican’s Social-Darwinist Budget Plan

by Robert Reich

Tuesday, March 20, 2012

In announcing the Republicans’ new budget and tax plan Tuesday, House Budget Committee Chairman Paul Ryan said “We are sharpening the contrast between the path that we’re proposing and the path of debt and decline the president has placed us upon.”

Ryan is right about sharpening the contrast. But the plan doesn’t do much to reduce the debt. Even by its own estimate the deficit would drop to $166 billion in 2018 and then begin growing again.

The real contrast is over what the plan does for the rich and what it does to everyone else. It reduces the top individual and corporate tax rates to 25 percent. This would give the wealthiest Americans an average tax cut of at least $150,000 a year.

The money would come out of programs for the elderly, lower-middle families, and the poor.

Seniors would get subsidies to buy private health insurance or Medicare – but the subsidies would be capped. So as medical costs increased, seniors would fall further and further behind.

Other cuts would come out of food stamps, Pell grants to offset the college tuition of kids from poor families, and scores of other programs that now help middle-income and the poor.

The plan also calls for repealing Obama’s health-care overhaul, thereby eliminating healthcare for 30 million Americans and allowing insurers to discriminate against (and drop from coverage) people with pre-existing conditions.

The plan would carve an additional $19 billion out of next year’s “discretionary” spending over and above what Democrats agreed to last year. Needless to say, discretionary spending includes most of programs for lower-income families.

Not surprisingly, the Pentagon would be spared.

So what’s the guiding principle here? Pure social Darwinism. Reward the rich and cut off the help to anyone who needs it.

Ryan says too many Americans rely on government benefits. “We don’t want to turn the safety net into a hammock that lulls able-bodied people into lives of dependency.”

Well, I have news for Paul Ryan. Almost 23 million able-bodied people still can’t find work. They’re not being lulled into dependency. They and their families could use some help. Even if the economy continues to generate new jobs at the rate it’s been going the last three months, we wouldn’t see normal rates of unemployment until 2017.

And most Americans who do have jobs continue to lose ground. New research by professors EmmanualSaez and Thomas Pikkety show that the average adjusted gross income of the bottom 90 percent was $29,840 in 2010 — down $127 from 2009 and down $4,842 from 2000 — and just slightly higher than it was forty-six years ago in 1966 (all figures adjusted for inflation).

They could use better schools, access to higher education, lower-cost health care, improved public transportation, and lots of other things Ryan and his colleagues are intent on removing.

Meanwhile, America’s rich continue to grow richer — and many of them (and their heirs) are being lulled into lives whose hardest task is summoning the help.

Anyone who thought the Great Recession might reduce America’s wild lurch toward wild inequality should think again. The most recent data show that just 15,600 super-rich households – the top 1 tenth of 1 percent – pocketed 37 percent of all the economic gains in 2010. The rest of the gains went to others in the top 10 percent.

Republican Social Darwinists are determined that the Bush tax cuts of 2001 and 2003 be made permanent. Those cuts saved the richest 1 percent of taxpayers (roughly 1.4 million people) more money on their taxes last year than the rest of America’s 141 million taxpayers received in total income.

Thank you, House Republicans, for “sharpening the contrast” between your radical Social Darwinism and those of us who still cling to the belief that the most fortunate have a responsibility to the rest.

If You Took the Greed Out of Wall Street, All You’d Have Left Is Pavement: Why Greg Smith’s Critique is Way Too Narrow

by Robert Reich

Friday, March 16, 2012

 

Greg Smith, a Goldman Sachs vice president, resigned his post Wednesday with a stinging public rebuke of the firm on the oped page of the New York Times — accusing it of no longer putting its clients before its own pecuniary goals.            

But if Mr. Smith believes his experience at Goldman is something new, he doesn’t know history. In 1928, Goldman Sachs and Company created the Goldman Sachs Trading Corporation, which promptly went on a speculative binge, luring innocent investors along the way. In the Great Crash of 1929, Goldman’s investors lost their shirts but Goldman kept its hefty fees.

If Mr. Smith believes such disregard of investors is unique to Goldman, he doesn’t know the rest of Wall Street. In the late 1920s, National City Bank, which eventually would become Citigroup, repackaged bad Latin American debt as new securities which it then sold to investors no less gullible than Goldman Sachs’s. After the Great Crash of 1929, National City’s top executives helped themselves to the bank’s remaining assets as interest-free loans while their investors and depositors were left with pieces of paper worth a tiny fraction of what they paid for them.

The problem isn’t excessive greed. If you took the greed out of Wall Street all you’d have left is pavement. The problem is endemic abuse of power and trust. When bubbles are forming, all but the most sophisticated investors can be easily duped into thinking they’ll get rich by putting their money into the hands of brand-named investment bankers.

Moreover, finance has become so complex that investors don’t even know when they’re being taken for a ride, and so can’t possibly hold a brand-name bank responsible for their losses – or for gains that are a fraction of what they might otherwise have been.

That’s why we have regulations. After millions of investors lost everything in 1929, the federal government stepped into the breach with the Securities Acts of 1933 and 1934 and the Banking Act of 1933, sponsored by Senator Carter Glass and Congressman Henry Steagall.

But starting in the 1970s and 1980s, Wall Street made sure these and the regulations issued under them were steadily watered down – which contributed to the junk-bond and insider trading scandals of the 1980s, the dot-com scams of the late 1990s and early 2000s, the Wall-Street enablers of Enron and other corporate looters, and the wild excesses that led to the crash of 2008.

Wall Street’s shenanigans have convinced a large portion of America that the economic game is rigged. Yet capitalism depends on trust. Without trust, people avoid even sensible economic risks. And when they think the game is rigged, they’re easy prey for political demagogues with fast tongues and dumb ideas.

The Street has only itself to blame. It should have welcomed new financial regulation as a means of restoring public trust. Instead, it lobbied intensely against the new Dodd-Frank Act and refused to resurrect Glass-Steagall.

The cost of such cynicism has leached deep into America, finding expression in Tea Partiers and Occupiers and millions of others who think the Street has sold us out. 

 

Why Republicans Aren’t Mentioning the Real Cause of Rising Prices at the Gas Pump

by Robert Reich

Thursday, March 15, 2012

Gas prices continue to rise, which is finally giving Republicans an issue. Mitt Romney is demanding the President open up more domestic drilling; the super PAC behind Rick Santorum just released a new ad in Louisiana blasting the President on gas prices; and the GOP is attacking the White House on the Keystone XL Pipeline.   

But the rise in gas prices has almost nothing to do with energy policy. It has everything to do with America’s continuing failure to adequately regulate Wall Street. But don’t hold your breath waiting for Republicans to tell the truth.

As I’ve noted before, oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter. Demand for oil isn’t rising in any event. Demand is down in the U.S. compared to last year at this time, and global demand is still moderate given the economic slowdowns in Europe and China. 

But Wall Street is betting on higher oil prices in the future — and that betting is causing prices to rise. The Street is laying odds that unrest in Syria will spill over into other countries or that tensions with Iran will affect the Persian Gulf, and that global demand will pick up as American consumers bounce back to life.

These bets are pushing up oil prices because Wall Street firms and other big financial players now dominate oil trading.

Financial speculators historically accounted for about 30 percent of oil contracts, producers and end users for about 70 percent. But today speculators account for 64 percent of all contracts.

Bart Chilton, a commissioner at the Commodity Futures Trading Commission — the federal agency that regulates trading in oil futures, among other commodities — warns that too few financial players control too much of the oil market. This allows them to push oil prices higher and higher — not only on the basis of their expectations about the future but also expectations about how high other speculators will drive the price.

In other words, a relatively few players with very deep pockets are placing huge bets on oil — and you’re paying.

Chilton estimates that drivers of small cars like Honda Civics are paying an extra $7.30 every time they fill up — and that money is going into the pockets of Wall Street speculators. Drivers of larger vehicles like the Ford Explorer are paying speculators $10.41 when they fill up.

Funny, but I don’t hear Republicans rail against Wall Street speculators. Could this have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?

Wall Street isn’t bankrolling Democrats nearly as much this time around because the Street is still smarting from the Dodd-Frank Wall Street reform law pushed by the Democrats, and from the president’s offhand remark in 2010 calling the denizens of the Street “fat cats.”

The Commodity Futures Trading Commission is trying to limit how much speculators can bet in oil futures — a power it was given by Dodd-Frank. It issued a rule in October, but it won’t take effect for another year.

Meanwhile, Wall Street has gone to court to stop the rule. It’s already won a stay.

As rising gas prices start wagging the election-year dog, the President should let America know what’s really causing prices to rise.

The Purpose of Occupy Wall Street Is to Occupy Wall Street

by Michael Moore

March 14, 2012   |    This article appeared in the April 2, 2012 edition of The Nation.

Occupy Wall Street. What other political movement in modern times has won the sympathy and/or support of the majority of the American public—in less than two months? How did this happen? I think it was a revolt that has been percolating across the country since Reagan fired the first air traffic controller. Then, on September 17, 2011, a group of (mostly) young adults decided to take direct action. And this action struck a raw nerve, sending a shock wave throughout the United States, because what these kids were doing was what tens of millions of people wished they could do. The people who have lost their jobs, their homes, their “American dream”—they cathartically cheered on this ragtag bunch who got right in the face of Wall Street and said, “We’re not leaving until you give us our country back!”

By purposely not creating a formal, hierarchical organization with rules and dues and structure and charismatic leaders and spokespeople—all the things their parents told them they would need in order to get anything done—this new way allowed people from all over the country to feel like they were part of the rebellion by simply deciding that they were part of the rebellion. You want to occupy your local bank—do it! You want to occupy your college board of trustees—done! You want to occupy Oakland or Cincinnati or Grass Valley—be our guest! This is your movement, and you can make it what you want it to be.

In the old days, if you were starting a movement, you had to first educate the public about the problem you were trying to fix, and then you had to persuade them to join you. To move America toward a nonracist, nonsexist, nonhomophobic, peace-seeking nation took years—decades—and we’re still not there. But with Occupy Wall Street, you don’t have to convince the majority of Americans that greed rules Wall Street, that the banks have no one’s interests but their own at heart or that corporate America is out to squeeze every last bit of labor and wages out of everyone’s pocket. Everybody gets it. Even those who oppose it. The hardest part of this or any movement—building a majority—has already happened. The people are with us. So now what do we do?

Here’s what we don’t do: don’t turn Occupy Wall Street into another bureaucratic, top-down organization. That will certainly kill it. Baby boomers who grew up working within traditional organizations need to calm down and not shoehorn this movement into the old paradigm of “Let’s elect people to office and then lobby them to pass good laws!” Let Occupy take its natural course. The candidates for office that we need are in this movement. (Are you one of them? Why not? Someone has to do it, and it would be better if it was you!) The laws that must be enacted to make this a more just nation will come in due time. And not ten years from now; some of this will happen this year. The leading candidate for Congress from my hometown of Flint, Michigan, has already taken a pledge to make “getting money out of politics” his top goal once in office. Others have joined him. We need to vote for them and then hold them to it.

But right now, Occupy has to continue as a bold, in-your-face movement—occupying banks, corporate headquarters, board meetings, campuses and Wall Street itself. We need weekly—if not daily—nonviolent assaults right on Wall Street. You have no idea how many people across the country would come to New York City to participate in wave after wave of arrests as they/we attempt to shut down the murderous, thieving machine that is Wall Street. Forty-five thousand people a year die simply because they don’t have health insurance. Do you think they have any relatives, friends, neighbors, parishioners who might be a little upset? How about the 4 million people losing their homes to the banks? Or the millions of students being crushed by debt? I think we could organize a few of them to shut down Wall Street.

And in town after town across America, people need to do similar things, but on a local level. Evictions of people who have been foreclosed upon must be met by citizens occupying the front door of the repossessed home and nonviolently blocking the bank from tossing the family out to the curb. When a neighbor can’t get the medical procedure she needs, people in town must occupy the hospital or the lobby of the insurance company. When a university raises students’ tuition for the umpteenth time, those students must occupy the administration’s office until the board of trustees relents.

It’s important to remember, though, that Occupy Wall Street is about occupying Wall Street. The other Occupies that have sprung up around the country are in solidarity, and while they attack the tentacles and the symptoms of the beast that exist locally everywhere, the head can be chopped off only in one place—and that place is in downtown Manhattan, where this movement started and must continue.

Our kids—the heart and soul of this movement—have watched us for years beating our heads against the walls of power, always marching on Washington, sending in checks to the environmental groups, giving up red meat—and what they got from this is that they are the first generation who will now be worse off than their parents. They still love us (which is remarkable when you think of the world we’ve handed them), but they are taking a different path from ours. Let them. The kids are all right. Do they know where their path will lead? Not necessarily—but that’s the beauty of Occupy Wall Street. The mystery of what’s ahead is the lure. Millions want in on that adventure because, deep down, they know they have no choice. And they know that there’s more of them than the men on Wall Street who currently occupy America. They have no choice but to win.

Click here to read this article in Spanish.

Bank of America: Too Crooked to Fail

The bank has defrauded everyone from investors and insurers to homeowners and the unemployed. So why does the government keep bailing it out?

By Matt Taibbi, March 14, 2012 from Rolling Stone

At least Bank of America got its name right. The ultimate Too Big to Fail bank really is America, a hyper- gluttonous ward of the state whose limitless fraud and criminal conspiracies we'll all be paying for until the end of time. Did you hear about the plot to rig global interest rates? The $137 million fine for bilking needy schools and cities? The ingenious plan to suck multiple fees out of the unemploy- ment checks of jobless workers? Take your eyes off them for 10 seconds and guaranteed, they'll be into some shit again: This bank is like the world's worst-behaved teenager, taking your car and running over kittens and fire hydrants on the way to Vegas for the weekend, maxing out your credit cards in the three days you spend at your aunt's funeral. They're out of control, yet they'll never do time or go out of business, because the government remains creepily committed to their survival, like overindulgent parents who refuse to believe their 40-year-old live-at-home son could possibly be responsible for those dead hookers in the backyard.

It's been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they'd be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn't ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America's bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank's bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it's also far too corrupt to survive.

All the government bailouts succeeded in doing was to make the bank even more prone to catastrophic failure – and now that catastrophe might finally be at hand. Bank of America's share price has plunged into the single digits, and the bank faces battles in courtrooms all over America to avoid paying back the hundreds of billions it stole from everyone in sight. Its credit rating, already downgraded to a few rungs above junk status, could plummet with the next bad analyst report, causing a frenzied rush to the exits by creditors, investors and stockholders – an institutional run on the bank.

They're in deep trouble, but they won't die, because our current president, like the last one, apparently believes it's better to project a false image of financial soundness than to allow one of our oligarchic banks to collapse under the weight of its own corruption. Last year, the Federal Reserve allowed Bank of America to move a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. Then, in February, the Justice Department's so-called foreclosure settlement, which will supposedly provide $26 billion in relief for ripped-off homeowners, actually rewarded the bank with a legal waiver that will allow it to escape untold billions in lawsuits. And this month the Fed will release the results of its annual stress test, in which the bank will once again be permitted to perpetuate its fiction of solvency by grossly overrating the mountains of toxic loans on its books. At this point, the rescue effort is so sweeping and elaborate that it goes far beyond simply gouging the tax dollars of millions of struggling families, many of whom have already been ripped off by the bank – it's making the government, and by extension all of us, full-blown accomplices to the fraud.

Anyone who wants to know what the Occupy Wall Street protests are all about need only look at the way Bank of America does business. It comes down to this: These guys are some of the very biggest assholes on Earth. They lie, cheat and steal as reflexively as addicts, they laugh at people who are suffering and don't have money, they pay themselves huge salaries with money stolen from old people and taxpayers – and on top of it all, they completely suck at banking. And yet the state won't let them go out of business, no matter how much they deserve it, and it won't slap them in jail, no matter what crimes they commit. That makes them not bankers or capitalists, but a class of person that was never supposed to exist in America: royalty.

Self-appointed royalty, it's true – but just as dumb and inbred as the real thing, and every bit as expensive to support. Like all royals, they reached their position in society by being relentlessly dedicated to the cause of Bigness, Unaccountability and the Worthlessness of Others. And just like royals, they spend most of their lives getting deeper in debt, and laughing every year when our taxes go to covering their whist markers. Two and a half centuries after we kicked out the British, it's really come to this?

The Road We've Traveled

 

How Republican Presidents Lowered Taxes on the Rich and Raised Taxes on the Poor and Middle Class - Part 2, the Bush Sr, Clinton and Bush Jr Years

by John Lawrence

Part 1 of this series covering the Reagan years can be found here. This post relies on data from the following sources: Federal Income Tax Rates History, Social Security and MedicareTax Rates, Historical Capital Gains and Taxes and Party Control of Congress and the Presidency. In the first part we pointed out that Reagan under the tutelage of Ayn Rand lover Alan Greenspan flattened the tax code to just two rates: 15% for anyone making less than $56,427. and 28% for anyone making more than that amount. This effectively raised taxes on the poor and lowered them on the rich compared to the day Reagan entered office when the tax rate was zero on the poor and 70% on the rich. Reagan and Greenspan also drastically raised Medicare and Social Security (payroll) taxes which affect mainly the poor and middle class. Bush Sr served from 1989 till 1992 when Clinton took over. In 1991 under a Democratic Congress, Bush Sr raised taxes despite his pledge not to. Remember his campaign promise: "Read my lips. No new taxes." However, despite the big brou ha ha, Bush did not raise income taxes on the poor and middle class; he only raised them on the rich. You would think that, if the middle class and poor were paying attention, they would have been satisfied with this development and reelected Bush in 1992. But the Republicans and right wing media talking heads raised such a hue and cry, convincing voters that Bush Sr had raised taxes on all people and not just the top few percent, that Bush was defeated and Clinton elected. What Bush did was to add a third tax bracket of 31% for incomes over $135,336 while leaving unchanged the two lower tax brackets. Bush "unflattened" the tax code slightly which should have raised a cheer among the middle class, but it didn't due to the fact that they were convinced by the right wing punditry that Bush raised taxes period, end of story. They didn't distinguish whom Bush raised taxes on. They only paid attention long enough to understand that Bush raised taxes.

Bush Sr also raised FICA and SECA (Social Security and Medicare) taxes. These went from 7.150%  for employees and employers in 1987 to 7.51 in 1988 and 1999. The corresponding rates for the self-employed went from 14.3% in 1987 to 15.02% in 1988 and 1989. So what Bush gave with one hand to the poor and middle class in the form of not raising their income taxes, he took away with the other by raising FICA and SECA taxes which affect mainly the poor and middle class. The net effect was to make the total tax burden on the middle class as great or greater than the tax burden on the rich since the rich pay little FICA and SECA tax compared to their total income. Bush Sr and the Republicans were at it again in 1990, a year in which they raised FICA and SECA taxes to 7.65% for employees and employers and 15.3% for self-employed where they have remained to this day. So Bush Sr was not such a traitor to his class as one might think from just considering the income tax structure alone. The net effect was that he raised taxes on the poor and middle class much more than he raised them on the rich.

Bush Sr had a Democrat controlled Congress during his four year term and they managed to raise the capital gains tax from 28% to 28.93% in 1991, a piddling amount compared to the huge decreases which were to come later during the Bush Jr administration. So the rich had their capital gains taxes raised for the last year of the Bush Sr administration through no fault of Bush's own. It was the Democrats who pushed this tax increase through.

Clinton took over in 1993 and with a Democratic Congress unflattened the tax code even more adding two tax brackets at the high end. The following is the tax table for married couples filing jointly, inflation adjusted.

Table 1 - 1993 - Married Filing Jointly

Marginal            Tax Brackets
Tax Rate      Over       But Not Over

15.0%            $0           $57,298

28.0%       $57,298        $138,432

31.0%       $138,432      $217,392

36.0%       $217,392      $388,200

39.6%       $388,200 -

____________________________________________________________________

Despite the fact that Clinton raised only taxes on the rich and kept them the same on the poor and middle class, a fact that the vast majority of voters should have been happy with, Republicans managed to tag Clinton and the Democrats with the "tax and spend" and "big government" labels. FICA and SECA taxes remained the same under Clinton.

In 1994, half way into Clinton's first term, Republicans took over control of Congress. Despite that fact the income tax code remained substantially unchanged for the rest of Clinton's Presidency with the result that, by the time Clinton left office in 2000, there was a budget surplus and the nation was on track to eliminate the national debt entirely.

Capital gains taxes were a different story. They went from 28.93% in 1991 to 29.19% in 1993. The poor and middle class swallowed the Republican hogwash about Clinton raising their taxes and elected a Republican Congress in 1994. The Republican Congress slashed the capital gains tax all the way back to 21.19% in 1997 where it stayed for the remainder of the Clinton Presidency. So despite the fact that during the Clinton years income taxes were raised on the rich, capital gains taxes which affect primarily the rich were substantially reduced. The net result was that taxes on the rich were effectively lowered and despite that fact Clinton was able to run budget surpluses during his last few years in office. Go figure!

George W Bush was elected in 2000. Then the tax cutting which led to huge deficits began - with a vengeance. "You know how to spend your own money better than the government does." The Republicans were great at formulating slogans and defining the situation. What were the Democrats supposed to say to that: "The government knows better how to spend your money than you do"? Consequently, in 2001 the top tax rate was lowered by .5% from 39.6% to 39.1%. The middle three tax rates were lowered .1%, and the tax rate for the poor, the lowest tax bracket was not lowered at all. The net effect was to give the rich a big tax cut, the middle class a modest tax cut and the poor no tax cut. Here is the tax table:

Table 2 - 2001 - Married Filing Jointly

Marginal            Tax Brackets
Tax Rate      Over       But Not Over

15.0%       $0                $57,267

27.5%       $57,267        $138,416

30.5%       $138,416      $210,950

35.5%       $210,950      $376,732

39.1%       $376,732

____________________________________________________________________

In 2002 another half a percent was cut for the four highest tax brackets and in addition a new bracket was added at the bottom thus reducing taxes on the poor to 10% up till an income of $14,967. The 15% tax bracket was the only one not cut thus making a mockery out of tax cuts for the middle class. Here is the tax table for 2002:

Table 3 - 2002 - Married Filing Jointly

Marginal            Tax Brackets
Tax Rate      Over       But Not Over

10.0%          $0             $14,967

15.0%          $14,967     $58,246

27.0%          $58,246     $140,752

30.0%          $140,752   $214,464

35.0%          $214,464   $382,967

38.6%          $382,967

In 2003 there was another tax cut ... of course ... but only for the rich and upper middle class, not for the middle class or the poor!! 3.6% was cut off the top tax rate! 2% was cut from the next three tax rates leaving the bottom two tax rates all the way up to an income of $69,265 virtually untouched!! All the while the right wing propaganda machine was out to convince everyone that Bush Jr was cutting taxes for E..V..E..R..Y..B..O..D..Y. Here are the sad results:

Table 4 - 2003 - Married Filing Jointly

Marginal            Tax Brackets
Tax Rate      Over       But Not Over

10.0%          $0              $17,072

15.0%          $17,072      $69,265

25.0%          $69,265      $139,810

28.0%          $139,810    $213,039

33.0%          $213,039    $380,409

35.0%          $380,409

After 2003 the income tax cutting frenzy for the rich was over at least for the remaining years of the Bush Jr administration. The 2003 tax table was for all intents and purposes the tax structure that President Obama inherited when he became President in 2009. The same tax structure remains in effect till this day, Obama having failed to end the Bush tax cuts due to Republican intransigence and obstructionism and to raise the top rate back to the 39.5% that it was in the last years of the Clinton administration. As a consequence structural budget deficits continue to add immense sums to the national debt, and there is Republican pressure to cut spending on social programs like Social Security, Medicaid and Medicare but, of course, they don't want to reduce spending on the military. Obama may force their hand by ending the wars in Iraq and Afghanistan and talking up his desire on the campaign stump to spend half the savings on deficit reduction and half on rebuilding infrastructure, but he will need a Democrat controlled Congress to do anything of the sort.

In addition to the Bush Jr income tax cuts for the rich, he also cut capital gains taxes substantially during his term in office, an even greater boon to the rich than the income tax cuts. Capital gains taxes went from 21.19% in 2000 to 21.17% in 2001 and 21.16% in 2002. Then in 2003 they went all the way down to 16.05%. That was followed by a drop to 15.07% in 2006 and further down to 15.35% in 2008 where they remain today. The combined income and capital gains tax cuts which benefitted primarily the rich produced disastrous budget deficits, and, since structurally the Bush tax cuts remain in effect, the Obama administration is forced to run huge budget deficits which Republicans disingenuously blame him for although they refuse to raise taxes on the rich or let the Bush tax cuts expire which would ameliorate the situation.

Raising the top income tax rate back to 39.5% and the capital gains tax back to 28.93% (an almost doubling of capital gains tax) where they were under the Clinton administration would do a huge amount to eliminate the budget deficits that Obama is unfairly being tagged with. Adding more tax brackets for incomes above $382,967 where the highest rate now kicks in would also provide even more desperately needed revenue. Today when the Fortune 400 is composed exclusively of billionaires, tax brackets in the millions and billions of dollars are appropriate and only fair. Obama has presented this rather cleverly as the Buffet rule: a boss shouldn't be effectively taxed less than his secretary. Today most billionaires pay an effective tax rate around 15% since most of their income is composed of capital gains. The only way to implement the Buffet rule is to raise the capital gains tax since the income tax no matter how high it becomes for millionaires and billionaires will hardly affect them. In addition a financial transaction tax could raise as much as $100-$200 billion a year.

Why I Am Leaving Goldman Sachs

Published on Wednesday, March 14, 2012 by The New York Times

by Greg Smith

Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

People walk to work outside the Goldman Sachs headquarters in New York in 2010. (AP/Mark Lennihan)

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.

My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.

I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

© 2012 Greg Smith

Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

The Difference Between Private and Public Morality

by Robert Reich

Tuesday, March 13, 2012

Republicans have morality upside down. Santorum, Gingrich, and even Romney are barnstorming across the land condemning gay marriage, abortion, out-of-wedlock births, access to contraception, and the wall separating church and state.

But America’s problem isn’t a breakdown in private morality. It’s a breakdown in public morality. What Americans do in their bedrooms is their own business. What corporate executives and Wall Street financiers do in boardrooms and executive suites affects all of us.

There is moral rot in America but it’s not found in the private behavior of ordinary people. It’s located in the public behavior of people who control our economy and are turning our democracy into a financial slush pump. It’s found in Wall Street fraud, exorbitant pay of top executives, financial conflicts of interest, insider trading, and the outright bribery of public officials through unlimited campaign “donations.”

Political scientist James Q. Wilson, who died last week, noted that a broken window left unattended signals that no one cares if windows are broken. It becomes an ongoing invitation to throw more stones at more windows, ultimately undermining moral standards of the entire community

The windows Wall Street broke in the years leading up to the crash of 2008 remain broken. Despite financial fraud on a scale not seen in this country for more than eighty years, not a single executive of a major Wall Street bank has been charged with a crime.

Since 2009, the Securities and Exchange Commission has filed 25 cases against mortgage originators and securities firms. A few are still being litigated but most have been settled. They’ve generated almost $2 billion in penalties and other forms of monetary relief, according to the Commission. But almost none of this money has come out of the pockets of CEOs or other company officials; it has come out of the companies — or, more accurately, their shareholders. Federal prosecutors are now signaling they won’t even bring charges in the brazen case of MF Global, which lost billions of dollars that were supposed to be kept safe.

Nor have any of the lawyers, accountants, auditors, or top executives of credit-rating agencies who aided and abetted Wall Street financiers been charged with doing anything wrong.

And the new Dodd-Frank law that was supposed to prevent this from happening again is now so riddled with loopholes, courtesy of Wall Street lobbyists, that it’s almost a sham. The Street prevented the Glass-Steagall Act from being resurrected, and successfully fought against limits on the size of the largest banks.

Windows started breaking years ago. Enron’s court-appointed trustee reported that bankers from Citigroup and JP Morgan Chase didn’t merely look the other way; they dreamed up and sold Enron financial schemes specifically designed to allow Enron to commit fraud. Arthur Andersen, Enron’s auditor, was convicted of obstructing justice by shredding Enron documents, yet most of the Andersen partners who aided and abetted Enron were never punished.

Americans are entitled to their own religious views about gay marriage, contraception, out-of-wedlock births, abortion, and God. We can be truly free only if we’re confident we can go about our private lives without being monitored or intruded upon by government, and can practice whatever faith (or lack of faith) we wish regardless of the religious beliefs of others. A society where one set of religious views is imposed on a large number of citizens who disagree with them is not a democracy. It’s a theocracy.

But abuses of public trust such as we’ve witnessed for years on the Street and in the executive suites of our largest corporations are not matters of private morality. They’re violations of public morality. They undermine the integrity of our economy and democracy. They’ve led millions of Americans to conclude the game is rigged.

Regressive Republicans have no problem hurling the epithets “shameful,” “disgraceful,” and “contemptible” at private moral decisions they disagree with. Rush Limbaugh calls a young woman a “slut” just for standing up for her beliefs about private morality.

Republicans have staked out the moral low ground. It’s time for Democrats and progressives to stake out the moral high ground, condemning the abuses of economic power and privilege that characterize this new Gilded Age – business deals that are technically legal but wrong because they exploit the trust that investors or employees have place[d] in those businesses, pay packages that are ludicrously high compared with the pay of average workers, political donations so large as to breed cynicism about the ability of their recipients to represent the public as a whole.

An economy is built on a foundation of shared morality. Adam Smith never called himself an economist. The separate field of economics didn’t exist in the eighteenth century. He called himself a moral philosopher. And the book he was proudest of wasn’t “The Wealth of Nations,” but his “Theory of Moral Sentiments” – about the ties that bind people together into societies.

Twice before progressive[s] have saved capitalism from its own excesses by appealing to public morality and common sense. First in the early 1900s, when the captains for American industry had monopolized the economy into giant trusts, American politics had sunk into a swamp of patronage and corruption, and many factory jobs were unsafe – entailing long hours of work at meager pay and often exploiting children. In response, we enacted antitrust, civil service reforms, and labor protections.

And then again in 1930s after the stock market collapsed and a large portion of American workforce was unemployed. Then we regulated banks and insured deposits, cleaned up stock market, and provided social insurance to the destitute. 

It’s time once again to save capitalism from its own excesses — and to base a new era of reform on public morality and common sense.

The Widening Wealth Divide, and Why We Need a Surtax on the Super Wealthy

by Robert Reich

Monday, March 12, 2012

Let Santorum and Romney duke it out for who will cut taxes on the wealthy the most and shred the public services everyone else depends on.

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth — not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets – including stocks and pension-fund holdings – are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes – whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class – lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap – already wider than the nation’s income gap – has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth – and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit – shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

Yale Professor Bruce Ackerman and Anne Alstott have proposed a 2 percent surtax on the wealth of the richest one-half of 1 percent of Americans owning more than $7.2 million of assets. They figure it would generate $70 billion a year, or $750 billion over the decade. That’s half the savings Congress’s now defunct Supercommittee was aiming for.

Instead of standing empty-handed while Santorum and Romney dominate the airwaves with their regressive Social Darwinism, Democrats need to be reminding Americans of what’s happening in the real economy – and what needs to happen.

The wealth gap is widening into a chasm. A surtax on the super rich is fair — and it’s necessary.

What the World Needs Now? - More Cooperation or More Competition?

by John Lawrence

When I was a graduate student at UCSD in the midst of the anti-war movement, protesting the war in Vietnam, I went to the library and pondered what would make the world a better place, what could I do to contribute something that might make war less likely and peace time activity more likely. I concluded that more cooperation was needed. More ways to resolve conflicts big and small. For example, democratic voting systems resolve conflicts in such a way that solutions are found that are acceptable to all parties for the most part. I took it for granted that institutions that provided for more cooperation and less competition were more desirable. I thought that this was what the Enlightenment was all about. My heroes were the Enlightenment superstars: Jeremy Bentham, John Stuart Mill, Rousseau, Diderot, Voltaire, John Locke.

As I sat there and went through the stacks, I discovered another field and another set of superstars. Social choice has a long history going back to the French Enlightenment philosophers, the Marquis de Condorcet and Jean-Charles de Borda, and even further back than that. One of the 19th century superstars in this field was none other than the Rev. C. L. Dodgson otherwise known as Lewis Carroll, the author of Alice in Wonderland. These guys came up with voting systems which are essential to democracy and are essential to the whole notion of cooperation and conflict resolution. The most recent work in this field was by Kenneth Arrow who published a book Social Choice and Individual Values in the 1950s which attempted to generalize conflict resolution in society in both the political and economic spheres. Arrow concluded that this was impossible and came up with his famous Impossibility Theorem which was a generalization using sophisticated mathematics of the paradox of voting that was known to Condorcet hundreds of years ago. Therefore, Arrow concluded democracy was impossible and any economic system other than capitalism was impossible too. Hmmm, I thought, this is obviously a cop-out because some political and economic systems are more desirable than others and Arrow has done nothing except to throw cold water on any framework that could consider these. I took it as my self-assigned task to prove that Arrow was wrong, that social choice is possible. My work can be found on the website Social Choice and Beyond.

My latest work is "Politonomics: A Meta-Theory Encompassing Political and Economic Decision Making." This is from the Abstract:

In “Social Choice and Individual Values,” Kenneth Arrow said , “In a capitalist democracy there are essentially two methods by which social choices can be made: voting, typically used to make ‘political’ decisions, and the market mechanism, typically used to make ‘economic’ decisions.” This paper resolves that dichotomy by developing a meta-theory from which can be derived methods for both political and economic decision making. This theory overcomes Arrow’s Impossibility Theorem in which he postulates that social choice is impossible and compensates for strategic voting, an undesirable aspect of decision making according to Gibbard and Satterthwaite. Thus the politonomics meta-theory spawns both political and economic systems which are indeed possible and which cannot be gamed. In a typical voting system the outcome of an election among several candidates results in one realized outcome – the winner of the election - which applies to all voters. In a typical economic system, a consumer may choose among a variety of possible baskets of consumer items and work programs with the result that multiple realized outcomes are possible with a unique or quasi-unique outcome for each worker/consumer. As the number of possible realized outcomes of a political-economic decision making process increases, the process becomes more economic and less political in nature and vice versa. We show that as the number of possible realized outcomes increases, voter/consumer/worker satisfaction or utility increases both individually and collectively.

I never considered, as I sat there pondering, that there would be people who would argue that what the world needed was not more cooperation but more competition, but, as I sit here today, I realize that the whole conservative right wing is in favor of just that. They want not more cooperation in either the political or economic realm but more competition believing that only winners should prevail and human progress is only possible when you give free reign to those among us who are the most talented, intelligent and ambitious. They believe that competition will result in the strongest among us winning just as Nietzsche believed that a good war hallows every cause. Their ethic is that the naturally gifted elite should prevail, and they are not concerned about what happens to the rest of us or of who is trampled in the process. This is also the philosophy of Ayn Rand as espoused in her novels Atlas Shrugged and The Fountainhead.

The debate today about increasing inequality in the world has to do with the prevalent conservative belief that only the strong should survive and be promoted and that freedom should preclude equality as a value. The rich should get more tax breaks because they are the true instigators of human progress and should be catered to at every turn. Perhaps a few crumbs will trickle down to the rest of us. This kind of thinking is counter to the Enlightenment and is fast returning us to a neo-Dark Age. No more is human progress to be measured in reduction of poverty and extension of basic services like health care to everyone. It is to be measured in terms of the great advances to human civilization like iPads, iPods and iPhones. People who are capable of coming up with these advances should be cut every break and none of the billions of dollars they make should be transferred by government to the least of these among us like the homeless, the poverty-stricken and the destitute because, well, they are the least among us, not the best among us who should be given every break.

Nevertheless, I remain in the camp of those who think that more cooperation in the political and economic spheres will do more for human progress than more competititon. I also have spent about 40 years in my spare time trying to prove that Arrow was wrong, that social choice is not impossible and that democracy in both the political and economic spheres is not only possible but desirable. This has a lot to do with voting systems, democratic institutions and constitutions but also with cooperative economic systems in which freedom is seen not as the freedom to make money at other people's expense (the losers in the competitive struggle) but the freedom to work as much or as little as one chooses and in accordance with one's preferences as much as possible. Freedom from work is for many people just as desirable a goal as the freedom to make billions of dollars, and wealthy people who don't have to work would be the first to tell you that. Economic democracy in my view is more desirable than cutthroat capitalism, and can be practiced not only at the national level, but at the enterprise level in the form of co-ops like the Mondragon Corporation.

Marx's famous definition of the "good society" was "from each according to his ability, to each according to his needs." This of course was perverted in defining communism as a society where all the wealth created by those who had a lot of talent and ability as well as a strong work ethic combined with those who had not so much in those categories would be thrown into a pot and then divided up in equal portions and handed out by the government. Such need not be the case in achieving the "good society." The "needs" part is pretty basic and could probably be accomplished with abouit 10% of the wealth that exists in the world today. Most people can provide for their own needs - no transfer necessary. There are some who cannot and to transfer a small part of the wealth of the wealthy to provide for their basic needs seems to me to be no more than humane. That still leaves the vast amount of wealth in the hands of the wealthy. In other words if you total up how much it would cost to provide for all the basic needs of everyone in the world and tote up how much wealth there exists in the world, it would take a fraction of all that wealth to provide the basic needs for everyone who cannot provide for their basic needs themselves who turn out to be mainly children, seniors and handicapped (whether physically or mentally) people.

A recent documentary by German TV station Deutsche Welle pointed out that half the world's production of food is wasted because super markets only want perfect vegetables and ones with slight blemishes are thrown out even though they are perfectly edible. Shelves need to be fully stocked with bread right up till closing hours even though any bread left over at the end of day will be thrown out as "day old." All the food that is thrown out by advanced nations is enough to feed all the world's hungry three times over although no governments or other institutions, much less the supermarkets themselves, seem to be interested in organizing that effort. This is what I mean by the fact that the basic needs of all the world's people could be satisfied without subtracting much if anything from the world's wealthy although a lot of them would admit they do not need incomes of millions of dollars a day like the Fortune 400 billionaires have.

Another documentary noted that Finnish school children have the highest test scores in the world despite the fact that they have one of the world's shortest school days with 15 minutes intermissions between classes during which time they are encouraged to go outdoors and play. All grades have large amounts of music, art and self-defined projects. They don't teach to the test. They are concerned with the development of each student as an overall human being not just as some super competitive cog in a nationally competitive machine. The Chinese on the other hand have the opposite approach demanding that children learn by rote methods and extra hours in school and at study. The Finnish schools are all public and everyone is accepted into every class. There are no advanced classes or tracking of students into lesser classes if they are not among the elite intellectually. Everyone is thrown in together; yet they have the best outcomes of any country in the world on standardized international tests. Egalitariansim seems to gain the best results.

An egalitarian ethic in which the concern is for the development of the whole human being rather than a promotion of just those who have superior abilities in accordance with a competitive ethic seems to me to be the most humanitarian way to treat both children and adults. The 1948 Universal Declaration of Human Rights already provides for most of the "from each according to their abilities, to each according to their needs" ethic. It calls for free health care which most advanced socierties, with the exception of the United States, already provide. It calls for free education and other public institutions and covers most basic human needs including food and shelter.

Here are Articles 25 and 26:

Article 25.

• (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
• (2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Article 26.

• (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.
• (2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.
• (3) Parents have a prior right to choose the kind of education that shall be given to their children.

All the basic needs of everyone on the planet could be provided for without subtracting much of the wealth of the rich since most people can provide for at least their basic needs without any transfer of wealth whatsover being necessary. Interestingly, the US among other nations does provide food security for the poor through its food stamps program. And of course seniors are provided for through Medicare, Medicaid and Social Security, programs which conservative free marketers are anxious to change or eliminate.

I am with the Enlightenment thinkers especially the English utilitarians like Jeremy Bentham and John Stuart Mill who thought about the happiness of society as a whole and concluded that everyone counted, not only the ones with exceptional talent, ability and other admirable qualities. A society should be judged by how it treats "the least of these my brethren" which is the core and essence of Jesus' teachings but, sad to say, not the core and essence of Christianity as it exists in the world today. Perhaps we should start thinking about an alternative constitution for the US which has the world's oldest constitution (236 years old!) while being the world's youngest advanced nation. Other societies including most European societies while being older than the US have newer constitutions. As far-sighted as the Founding Fathers were, a new and updated constitution incorporating not only political but also economic rights along the lines of the UN Declaration of Human Rights would do much to right the wrongs and shortcomings of present day America and the world.

Rush Limbaugh Is No Joke

by David Macaray / March 10th, 2012 from Dissident Voice

If ten or twelve Hungarian writers had been shot at the right moment, there would have been no revolt.

— Nikita Khruschev, 1956

It’s disappointing to hear people (liberals, progressives, Democrats) dismiss Rush Limbaugh as simply a “clown,” or a “blowhard,” or “an idiot,” or, more thoughtfully, as “a political entertainer and not a political pundit,” as if his 14-15 million reported regular listeners didn’t count for anything—as if they didn’t vote or make political contributions.  Let’s not kid ourselves.  Limbaugh’s audience doesn’t regard him as a joke.  They regard him as a modern day prophet.

As shamelessly full of smears, half-truths, bogus statistics, and outright lies as his radio show is, his listeners pay closer attention and give more credence to what Limbaugh says on the air than to what they read or hear in the so-called “liberal media,” and, sad to say, to what they see printed in textbooks and encyclopedias.  The man has enormous influence.

And if you don’t think 14-15 million regular listeners is a significant audience, just look at what the Bureau of Labor Statistics reports the total number of labor union members in the U.S. to be.  As of 2011, it’s 14.8 million.  Those are Limbaugh numbers.

In 1993, my union had its own “Limbaugh moment.”  I was in my fourth one-year term as president of the local—still fairly popular with the troops, still tight with the shop steward corps—but winning re-election each time by increasingly smaller margins.  At the end of one of our regular monthly meetings, a member approached me and asked why we were serving Snapple (along with beer and assorted soft drinks) as one of our refreshments.

He informed me that Snapple was a major sponsor of Rush Limbaugh’s radio show.  While I was familiar with Limbaugh’s brand of politics and rhetoric, I rarely listened to him, so I had no idea who sponsored the show.  This member argued persuasively that, in the name of American trade unionism, we needed to discontinue serving Snapple at union meetings.  It didn’t take much to convince me.  I heartily agreed.

For anyone unfamiliar with Limbaugh’s views on organized labor, switch to April of 2010, following the Massey (West Virginia) coal mine explosion that killed 29 miners.  Limbaugh went on the air and, with those punishing baritone pipes, shrilly and self-righteously railed against the UMW (United Mine Workers), accusing the union of not having done enough to prevent this terrible disaster.  His remarks were sarcastic and bullying….typical Limbaugh.

But he was dead wrong.  Not only was Massey a non-union facility (having aggressively rebuffed numerous UMW efforts to organize it), it’s an undeniable fact that unionized coal and copper mines have much better safety records than non-union mines.  Safety costs money, and non-union facilities are unwilling to spend it.  His remarks were both stupid and incendiary.  Again, typical Limbaugh.

To my surprise and disappointment, the plan to do away with Snapple ran into a couple of problems.  The first of which was the 9-person union Executive Board.  When word got out to the Board that—without so much as an informal vote, or a consultation, or even a courtesy heads-up—I had taken it upon myself to instruct the master-at-arms (the E-Board officer in charge of refreshments) to immediately discontinue purchasing Snapple, three E-board members jumped me.

One of them (“Linda”) objected because she herself turned out to be a regular Limbaugh listener.  This blew my mind.  Linda was smart and funny and an extremely credible and effective union officer.  Call me prejudiced, but her being a Limbaugh fan made no sense.  Linda told me that she listened to Rush because she “wanted to keep an open mind” (implying that I was “close-minded”?) and because he was “honest” and “not afraid to tell the truth.”

Even though Linda and I had always gotten along well as Board members, she was furious that I’d let my own personal politics dictate union policy, and outraged that I would dare pull a stunt like this unilaterally.  She made it clear that she felt betrayed.  The other two E-Board members objected for lesser reasons.  Apparently, they simply liked Snapple (particularly the grape flavor) and didn’t want to see it go away—not for something as trivial as sponsoring some crackpot radio show.

Things got more complicated when word was leaked to the factory floor (by Linda, I suspect), and the membership began a lively and undisciplined discussion of the issue.  Not to denigrate the virtues of old-fashioned grass-roots involvement, but from a union officer’s practical point of view, this kind of “spontaneous democracy” is always scary.  As it happened, there were a number of union members who listened to Limbaugh’s show, largely for the same reasons Linda did.  Those members instantly mobilized.  The Great Snapple War began.

A petition was immediately circulated, demanding that the union continue serving Snapple at monthly meetings.  But the necessary ground-swell interest simply wasn’t there.  Not only were the pro-Snapple crusaders unable to get the minimum number of required signatures on the petition, they either didn’t know how or were unwilling to make a formal motion at a membership meeting.  Within three or four days, the issue was dead.  And that’s how we eliminated Snapple.

One wonders what the political landscape would look like without Limbaugh.  Arguably, with fourteen million people needing to find another braying jackass to serve as their mentor, his absence would have a salutary effect.  But Limbaugh ain’t going anywhere.  All this fuss about sponsors jumping ship is misleading.  With 14-15 million potential consumers waiting to preached to, there will always be advertisers.

David Macaray, a Los Angeles playwright and author (It’s Never Been Easy: Essays on Modern Labor), was a former union rep. He can be reached at: [email protected]. Read other articles by David.

This article was posted on Saturday, March 10th, 2012 at 8:00am and is filed under Unions.

Rush Limbaugh Maligns and Defames Sandra Fluke With 70 Sexist Smears

 

Water Rights Groups Blast Corporate-Dominated Water Forum

Published on Monday, March 12, 2012 by Common Dreams

"Untamed privatization will lead to a disaster”

- Common Dreams staff

As the World Water Forum gathers in Marseille, France, for its 6th meeting since 1997, water rights activists are criticizing the corporate-led, profit-motivated gathering as a move for global control of water.

Shayda Naficy, senior organizer of Corporate Accountability International's Challenge Corporate Control of our Water, slams the forum as a platform for corporations to push their privatization efforts:

The World Water Forum is another tool in the corporate move to shift policy debates to opaque, elite forums insulated from broad democratic participation, asserting market assumptions as a starting-point for water policy. Since its 1997 inception, the WWF has been a lightning-rod for international protest, as a prime example of corporate interference with water governance. Organized by the private trade association, the World Water Council, in conjunction with host governments, this year’s Forum will be held in France, the home of the two largest water corporations, Suez and Veolia. While the movement to reclaim public control of water has made major strides in France in recent years, most notably with the 2010 transition of the Paris water utility back to public control, the Forum location of Marseille remains a stronghold for the private water industry, and the home turf of the World Water Council.

Maude Barlow, chairperson of the Council of Canadians and Food & Water Watch, criticizes the core mission of the forum:

“Water and sanitation have been recognized as human rights. The challenge now is to have governments implement these rights as quickly as possible now. It’s a poor starting point for the World Water Forum to fail to recognize these fundamental rights.”

Portuguese member of Parliament: “Whoever controls water controls a great source of power and of course a great source of profit.”

Euractiv reports:

At the last forum in Istanbul in 2009, police battled protestors opposing private management of water utilities. The issue resonates this year in austerity-driven European countries – including Greece, Portugal and Spain – where authorities have mapped out plans to sell state assets and utilities to address budget and debt woes.

“Whoever controls water controls a great source of power and of course a great source of profit,” João Ferreira, a Portuguese member of Parliament from the European United Left group, said Tuesday at a Brussels meeting called by FAME organisers.

“This resource cannot be managed privately … and untamed privatisation will lead to a disaster,” Ferreira said.

To provide an alternative conference emphasizing water as a human right, activists have created the Alternative World Water Forum. This group states that:

The next World Water Forum presents itself as a "Forum for solutions" as usual. These solutions are about making water more expensive and about having more paying customers. The issues should be about guaranteeing access to water and sanitation services.

In its focus on access to water and sanitation services, the Alternative Water Forum explains:

The objective of the Alternative World Water Forum (AWWF) – in French, the Forum Alternatif Mondial de l’Eau (FAME) – is to create a concrete alternative to the sixth World Water Forum (WWF) which is organized by the World Water Council. This Council is a mouthpiece for transnational companies and the World Bank and they falsely claim to head the global governance of water.

For several years, different civil society movements have fought side by side for water conservation and citizen management of water. Activists have created platforms, propositions and campaigns at events such as the 2003 Alternative Forum in Florence, the 2005 Alternative Forum in Geneva, the 2006 Alternative Forum in Mexico or the 2009 Alternative Forum in Istanbul and within international Social Forums such as those in Porto Alegre, Caracas, Nairobi, and Belem. These gatherings helped solidify the movement to reappropriate water, a communal resource which belongs to all of humanity.

Steve Jobs and American Jobs

by Robert Kuttner from Huffington Post, March 11, 2012

The economy added another 227,000 jobs in February, the Labor Department reported Friday. That's good news, sort of. It means that the recovery is slowly progressing. At this rate, we will be back to pre-recession employment levels sometime around 2018.

However, this growth in jobs was not enough for wages to keep place with inflation; nor did the unemployment rate drop, but stayed stuck at 8.3 percent. Why? Because folks who had given up have started entering the labor force again, but the percentage of people in the labor force is still two points lower than it was before the recession began. A new study by the Economic Policy Institute reports that earnings declined over the past decade even for college graduates -- so much for the education cure.

In short, the recession made a bad problem worse, but the economy on the eve of the recession was nothing to be proud of. Throughout the first decade of the new century, before the recession hit, wages lagged behind living costs for the vast majority of Americans -- because those in the top one percent were capturing such a large share of the economy's total productivity gains.

Some of this trend was the result of globalization undercutting the bargaining power of U.S. workers; some of it resulted from weakened trade unions and minimum wage laws lagging behind inflation.

Flat or declining wages did not result from declining average productivity. So when we finally climb out of this jobs recession, perhaps we can belatedly confront these deeper trends.

I have been writing about the hotel workers union in New York City.

Thanks to an extraordinarily effective union, Local 6 of the hotel and restaurant workers union, nearly every large hotel in Manhattan is unionized, and everyone who works in these hotels, from dishwashers to room cleaners to doormen to banquet waiters earns a middle class wage. The union recently signed a seven year contract giving workers a 27 percent wage.

Local 6 is an exceptionally effective union, and New York is a unique tourist destination. But since the vast majority of jobs in America will soon be service sector jobs, not vulnerable to global competition, there is no good economic reason why they can't all be middle class jobs. The challenge is political. We as a society simply need to decide, as President Obama famously told "Joe the Plumber," that we want to "spread the wealth around" rather than having it concentrate at the very top. All service jobs could pay a living wage. How to do that? Unions, wage regulation, progressive taxation, and government using existing powers over contractors that it seldom exercises.

But what about manufacturing? This brings me to the other Jobs of my title, the late Steve Jobs.

The New York Times, in a two part series earlier this year on Apple's Chinese contractor, Foxconn, finally made front page news and added some telling detail to what was already fairly well known. The cool, must-have iPads, iPhones, and iPods to which we are increasingly addicted are manufactured with brutal sweatshop labor in Shenzhen, China, where 230,000 employees are making an average of less than $2 an hour work in a single factory complex. Foxconn's dormitories now have nets outside to prevent suicides.

I recently saw a one-man show, Mike Daisey's amazing "The Agony and the Ecstasy of Steve Jobs," in which Daisey, a spellbinding monologue artist, recounts his own conversations with the workers of Foxconn in Shenzhen.

Daisey was on to Foxconn long before the Times. If you get a chance to see this show, which runs for one more week at New York's Public Theater and which will be on tour in Washington, D.C. and elsewhere later this year, don't miss it. Two weeks ago, Daisey made the stunning decision to put his script in the public domain, so that other performances could go viral.

Daisey wonders out loud: what if everyone who buys these products began upping the pressure on Apple to do right by its workers?

I would add: What if Apple made a decision to bring this work home, and to pay decent wages for it, say $20 an hour. Right now, this is literally impossible, because the production facilities to make such products no longer exist in the United States. But the Pentagon has insisted that America hang on to production capacity for certain other sensitive micro-electronics products. And if hostilities escalated between the U.S. and Beijing, you can bet that we would see a crash program to restore more micro-electronics output at home.

Apple earns about $600,000 per year per employee. It can well afford to share a little more of that with its workers.

The New York Times calculated that it would add only about $65 to the cost of an iPad or iPhone to produce it at home at good wages. And over time, it would tend to cost less, since higher-paid workers lead the company to redouble its investment in automation.

Apple can certainly afford this transition. It is now the richest company in the world, sitting on a pile of nearly a hundred billion dollars in cash. If Apple led, it would become bad form for America's other prestigious companies to manufacture for U.S. markets in foreign sweatshops.

Ralph Nader recently published the most improbable of books, a novel titled Only the Super-Rich Can Save Us. Nader, looking at the grotesque economic and political power imbalance in the U.S., imagined that a cabal of billionaires led by Warren Buffet and Ted Turner have an outbreak of conscience and become crusaders for progressive reform. It's Nader's way of both laying out a reform agenda and spotlighting where the real power lies.

It's a lovely fantasy, but it's not going to happen -- any more than Apple, out of the goodness of its corporate heart, is about to decide to phase out its high-tech Asian sweatshops in favor of decently compensated production jobs in the United States.

But what could perhaps happen is a mass movement of Apple consumers, declaring that it's not cool to treat the people who build these products like beasts of burden or like expendable non-human parts.

Alternatively, as incomes keep falling further behind the cost of living for most Americans, we can comfort ourselves with the thought that we enjoy the coolest of gadgets and that others are even poorer than we are.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.

Debt-Free Money Creation and Dividend To Every Citizen Can Ignite and Revive Hope In the Philippines

Ed. Note: The creation of money by fiat as opposed to debt, which is how the Federal Reserve expands the money supply, is what this article is about. This is how Lincoln funded the Civil War and the transcontinental railroad with Greenbacks. Fiat created money as opposed to debt created money expands the money supply in such a way that it does not have to be paid back with interest. See Ellen Brown's excellent book, "Web of Debt," and my blog article here for more on this topic.

By Eric Encina (about the author) March 12, 2012 from OpEdNews.com

We're supposed to be born free, but now become virtual slaves of debt and usury!  We have the universal rights to be free again.

The Philippine Government (also applicable to any government in the world) should take up its responsibility to create the money debt-free by legislation, and therefore, as a democratic country in the South-East Asia, the only claimed to be Christian nation in the region, should lead by example to implement ECONOMIC DEMOCRACY -- the financial-economic policies to provide a guaranteed economic security to every Filipino citizen as a matter of economic rights without condition and discrimination in the form of  NATIONAL DIVIDEND or extra basic income to be financed interchangeably by taxation, if possible, not from taxes, and not from any domestic or foreign borrowings, but from the NEW CREATION OF MONEY  DEBT FREE.

The Government-Created-Money by legislation, by popular Filipino people's demands through the facilities of STATE-OWNED CENTRAL BANK - the necessity to reverse the central  banking policies and amend the Philippine Constitution and/or public banking schemes - can ignite and revive HOPE  to Philippines to eliminate unnecessary domestic and foreign debts, interest payments, taxes, poverty, hunger, crimes and environmental destruction at already at calamitous proportions.

With debt-free money, the Government can kick-start the blossoming of provincial and regional economies without tensions, pressures and violence.

 

The rightful and unconditional provision of a dividend to every Filipino citizen, father, mother and child, annually, let say, a proposal, at the rate of $1,000 in the Philippine Peso value of P43,000, more or less, can certainly reap considerable benefits and help the household's buying power with dignity and prosperity.

 

If the Philippine Government and the people remain in the trap and chains of debt and the dungeon of usury, and of continuing devaluation of currency versus other world currencies, burgeoning and bloating budget deficits, we will, for certain, continue to be in a vicious cycle, sliding back and forth with long-term effects down to the next generation, into dehumanizing levels of poverty, of hunger, starvation, of chaos, violence, corruption, devastation, and man-made apocalyptic events even in the age of global plenty in the 21^st century.

The control of money is the easiest way to terminate the lives of the impoverished and oppressed inhabitants. Millions and billions of impoverished poor across the planet are suffocated and shackled every second under debt finance.

 

Under debt finance disaster capitalism and compounded usury, the majority of Filipinos have long been ruined, shattered, forced to hand to mouth existence and enduring deprivations, hunger and starvation, and millions robbed of their human dignity. We are virtual slaves in our own country and overseas. The plight of the poor has become nightmarish through successive administrations under the tutelage and supervision of the international high finance capitalism, exacerbated by nasty-muddy-corrupt politics and all other attendant evils, ad infinitum.

 

The financial economic welfare of the Filipino citizens is the major responsibility of the Government  where  leaders are elected for public service and trust. The Government exists for the citizens, and not citizens for the Government.

Our wealth is for all, without exceptions and discrimination. Money creation that converts to monetary wealth must be based on facts and the reflection of PEOPLE'S WEALTH and money.  Our economic system should be based on economic bill of rights, of authentic human rights approach, a philosophy  to back up reality, of justice, solidarity, of brotherhood, of equality with theology of charity, mercy and compassion to appreciate the human dignity of everyone  and the love and adoration and our appreciation to OUR CREATOR Who created everything for us as PRO BONO, the Author of Life and its diversities and the Owner of All Universal Wealth seen and unseen.

We're all definitely imbued with a certain responsibility, by remorse of conscience, to help effect for change from the oppressive system to  system where everyone will be secured, justly guaranteed and prospered without compunction of heart  and scruple of conscience, and moral regrets, without fear and above all free from any of God's wrath.

 

There is enough wealth for everyone in the world with all material indisputable evidences if only there is justice and charity in the minds and hearts of men.  There is no any valid reason for the lack of money.

I welcome comments, suggestions and correction.

Eric V. Encina

Philippines

The Precarious Jobs Recovery

by Robert Reich

Friday, March 9, 2012

February’s  227,000 net new jobs – the third month in a row of job gains well in excess of 200,000 – is good news for President Obama and bad news for Mitt Romney.

Jobs are coming back fast enough to blunt Republican attacks against Obama on the economy and to rob Romney of the issue he’d prefer to be talking about in his primary battle against social conservatives in the GOP.

But jobs aren’t coming back fast enough to significantly reduce the nation’s backlog of 10 million jobs. That backlog consists of 5.3 million lost during the recession and another 4.7 million that needed to have been added just to keep up with the growth of the working-age population since the recession began.

If the American economy continues to produce jobs at the good rate it’s maintained over the last three months, averaging 245,000 per month, the backlog won’t be whittled down for another five years — long after Barack Obama finishes his second term, should voters grant him another.

But whether even that good rate continues depends largely on whether consumer demand can be revived. Spending by American consumers is 70 percent of U.S. economic activity. But so far, spending is anemic.

American consumers have replaced worn-out cars and appliances, but little else. They haven’t had the dough. Their wages are still falling, adjusted for inflation. The value of their homes – most consumers’ single biggest asset – continues to drop.

Home values are down by an average of a third from their 2006 peak. Consumers understandably feel far poorer as a result. Declining home prices also mean consumers can’t use their homes as collateral for new loans, as they did before 2008. And even with low interest rates, refinancing is difficult.

Corporate profits are up but the money isn’t flowing to American workers. The ratio of profits to wages is the highest on record – since the government began keeping track in 1947. Not only has the median wage continued to drop, adjusted for inflation, but a far smaller share of working-age Americans is now employed (58.6 percent) than was employed five years ago (63.3 percent). Today’s employment-to-population ratio isn’t much higher than it was at its lowest point last summer, when it dropped to 58.2 percent.

The major driver of the U.S. economy over the past several months hasn’t been consumer spending. It’s been businesses rebuilding depleted inventories. Wholesalers increased their stockpiles again in February, bringing them up almost a quarter from their low in September 2009.

But businesses won’t continue to rebuild inventories unless consumers start buying again. big-time. And consumers won’t resume spending as they did before the recession until they’re far better off financially.

Yet how can they be sufficiently better off when their major asset has shrunk so much and when so few of the economic gains are going to them?

This is the central paradox at the heart of the American economy today. If it’s not resolved, the jobs recovery will stall, as it did last spring.

A year ago, remember, we had another three-month run of good job numbers. Last February, March, and April saw net gains of more than 200,000 jobs a month. But that job boomlet abruptly ended.

At the time most observers blamed the stall on external events – the Japanese earthquake, Europe’s gathering debt woes, and higher gas prices. In reality, it stalled because of the shallow pockets of American consumers.

Another stall this time might be blamed on any number of external events – slower growth in China and India, the unraveling of Europe’s debt-crisis deal, and higher gas prices.

But if another stall occurs, the real reason will be Americans once again ran out of money.

98 Major Advertisers Dump Rush Limbaugh, Other Right-Wing Hosts

By Judd Legum on Mar 10, 2012 from Think Progress

Industry website radio-info.com has the scoop:

When it comes to advertisers avoiding controversial shows, it’s not just Rush From today’s TRI Newsletter: Premiere Networks is circulating a list of 98 advertisers who want to avoid “environments likely to stir negative sentiments.” The list includes carmakers (Ford, GM, Toyota), insurance companies (Allstate, Geico, Prudential, State Farm) and restaurants (McDonald’s, Subway). As you’ll see in the note below, those “environments” go beyond the Rush Limbaugh show

“To all Traffic Managers: The information below applies to your Premiere Radio Networks commercial inventory...They’ve specifically asked that you schedule their commercials in dayparts or programs free of content that you know are deemed to be offensive or controversial (for example, Mark Levin, Rush Limbaugh, Tom Leykis, Michael Savage, Glenn Beck, Sean Hannity).’

This helps explain why, on Rush Limbaugh’s flagship station WABC, almost of the commercial breaks were filled with unpaid pubic service announcements. You can check out the list of the 50 advertisers who were known to have dropped Limbaugh before this report here.

But it’s not just Limbaugh that these advertisers want to disassociate with, but other big names in right-wing radio too. As the Daily Beast’s John Avalon notes, this is unprecedented in the 20-plus years that Limbaugh and his imitators have been on the air and could spell real trouble for an industry that’s already suffering demographically. Women ages 24–55 are the prize advertising demographic, but Limbaugh and other conservative hosts have steadily alienated these listeners over the years, so the sexist attacks on Sandra Fluke were “a perfect storm.”

The advertising flight is reminiscent of Glenn Beck’s Fox News program. After major companies refused to advertise on Beck’s show in light of racially insensitive comments, he was left with just fringe businesses like survival seed banks and gold sellers. Not long thereafter, he left Fox, reportedly under pressure.

The Bipartisan Force Behind the For-Profit College Scam: Big Money

Wednesday 7 March 2012

by: Zaid Jilani, Republic Report | Report

As we head into an election year, we’re going to increasingly hear that Democrats and Republicans fight like cats and dogs, that there is a civil war in Washington. This describes the state of play on some issues, but on others there is bipartisan agreement to do the wrong thing: Both parties do what the money tells them to do. How this works is subtle and often kept secret, done in rooms meant to shield policy-making while the public is distracted with electoral hoopla. Fortunately for Republic Report readers, I got access to one of these rooms, and I can explain how the money guides policy-making.

It starts with high level party functionaries paid by a rich industry, which uses the talents and connections of those party functionaries to extract government concessions. In this case, it’s the for-profit college industry, which perpetually leaves students with astronomical debt while providing poor quality education. The functionaries were former Bill Clinton advisor Doug Sosnik and Republican consultant Sara Fagen. Rather than fighting like cats and dogs, these two showed a keen sense of bipartisanship as they told leaders of these for-profit education companies how they can use their power to manipulate Congress into handing them more money.

The for-profit colleges, multi-billion dollar companies that rely on federal grants, have collected themselves into the super-boring sounding association known as the Association for Private Sector Colleges and Universities (APSCU). Today, they held a closed-to-the-public but open-to-the-media meeting in Washington, D.C. to plot how to keep Congress from approving stricter regulations on the billions of taxpayer dollars that their corporations receive through federal student loans and grants.

The first session of the day featured a presentation by Democratic consultant Sosnik and Republican consultant Fagen. Before Sosnik and Fagen spoke, an ASPCU representative noted that Sosnik most recently worked for the Motion Pictures Association of America (MPAA) on its legislative campaigns. The MPAA was last seen trying to undermine freedom on the internet through similar political connections and campaign contributions.

Both Sosnik and Fagen delivered PowerPoint presentations where they laid out national polling, explaining to the audience the chances of President Obama getting re-elected. I imagine that they each care about their party winning, since it impacts the fee they can extract from corporations seeking influence. After their polling presentations were completed, the audience had a chance to ask questions. One audience member asked how the for-profit college industry can best impact Congress and the various congressional campaigns that are currently underway.

Fagen laid out a strategy for an astroturf (which means fake grassroots) campaign, saying that it’s “much better to get in front of a candidate running for office before he or she is actually in office.” She referenced the “card check issue,” the Employee Free Choice Act, a controversial bill to strengthen labor unions. Fagen noted that the retail industry engaged in anti-union astroturf operations in swing districts and that when key Democrats were elected, “they were in our corner.” She went on to note that the for-profit college industry should be on the ground in Wisconsin to get candidates for the open U.S. Senate seat to commit to being for or against their legislative agenda.Sosnik then took to the microphone and — despite being a long-time Democrat and close advisor and friend of President Clinton — praised Fagen’s anti-union strategy, noting that she was one of the people who ran the campaign against the Employee Free Choice Act and “she was totally right about that.”  Sosnik is not elected, and neither is Fagen – but their opinion matters to policy-makers.  And as you’ll see, Sosnik’s cynicism about democracy is fascinating.

“Members of Congress are not always great leaders,” said Sosnik. “They are terrific at seeing when a line has formed and going and getting in front of the line. There’s nothing that politicians are more interested in than themselves and keeping their jobs.” He advised the industry to take its “assets on the ground in Wisconsin” and leverage them against the candidates. Above all else, Sosnik stressed that the industry had to maintain a strong presence on the ground in the districts of key candidates for office (earlier in the presentation, he noted that the MPAA was “roadkill” in its fight for the Stop Online Piracy Act, which he apparently helped spearhead, because it failed to engage the grassroots).

Watch Sosnik and Fagen advise a for-profit college industry that seeks to avoid accountability to students and taxpayers:

:

Presumably Sosnik and Fagen were paid, and paid well, for their appearances.  The joint presence of a senior Clinton advisor like Sosnik and a veteran of the Bush White House like Fagen echoes the bipartisan nature of the lobbying effort the for-profits continue to wage to avoid accountability for waste, fraud, and abuse with federal dollars and students’ futures. Democrats and Republican lobbyists can put aside their partisan feelings to come together to assist the for-profit college industry. These lobbyists appear to have one goal that they put before ideology: the money that the for-profit colleges are paying them to ensure that the government continues to hand them as much cash as possible with as few strings attached as possible.

Zaid Jilani

ZAID JILANI is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Zaid grew up in Kennesaw, GA, and holds a B.A. in International Affairs with a minor in Arabic from the University of Georgia. Prior to joining ThinkProgress, Zaid interned for Just Foreign Policy and was a weekly columnist at The Red & Black, the University of Georgia’s official student newspaper. He is a co-editor at the Georgia-based blog Georgia Liberal and a regular on RT America's The Alyona Show and The Thom Hartmann Show. He is also an occassional contributor to the op-ed pages of The Atlanta Journal-Constitution. His Twitter handle is @zaidjilani. 

 

The Privatization of Everything

Wednesday 7 March 2012

by: Richard Raznikov, The Rag Blog | Op-Ed

Does anyone have to ask what happens to law enforcement and the judicial system once the state agrees to keep private prisons at 90% of capacity?

No society can aspire to democracy unless it maintains an unbreakable connection between its politics and its police powers.

Once the populace has no political access to policy and enforcement, once those with coercive power over others are not directly accountable to the people’s representatives, you can kiss your ass goodbye.

We’re on the verge of it in America, 2012.As David Foster Wallace remarked, the truth will set you free but not until it’s finished with you.All across the western world, there is enormous pressure being brought to "privatize" everything. Where does this pressure come from? On whose behalf? What does it mean? What is the connection between the demands for "privatization" in Greece, as part of an "austerity package" initiated by the International Monetary Fund, with the "privatization" of prisons in Florida and other states of the U.S.? Is there one?

Let’s begin with this thought: as human cultures have evolved, there has been a general agreement that some things on the planet, such as water and air, belong to everyone. Democratization has extended these rights to include access to natural beauty and to the oceans.With various forms of democracy, even including communism and socialism, have come the acceptance that matters of common concern, however approached or regulated, are integrally connected to the political system. That is a fundamental good, since without it there is no way for the people to exercise any real power over their political environment.If one subscribes, therefore, to democracy, one also must take with it an inviolable connection between, for example, the building of roads, and politics. Otherwise, should roads be privately built, no one could pass without paying extortionate fees. Farmers could not get their crops to market. People could not travel or visit one another. And so forth.

Severing the connection between the public and the management of and control over public resources and operations thought to be of the commons, is dangerous. It would be hard to exaggerate just how dangerous.The issue of privatization is maybe the most important public issue we’re facing in the U.S., and it’s causing terrible dislocation and political chaos in Europe, as well. You’re not going to see it on the news (sic). As with many things in America now, this is a story we’ll have to piece together on our own.The Corrections Corporation of America, largest company operating private prisons, has written to 48 states offering to take over the running of prisons, provided that the states guarantee a 90 percent occupancy.The systemic corruption this invites is breathtaking.The care of inmates is of course a responsibility of the prison systems in the states and in the country as a whole for federal institutions. How we treat inmates, provision for their food and clothing, their recreation, their activities, their health, this is a matter of public policy. The state arrests, tries, and attains convictions; inmates have been sentenced to prison. The duration of the sentence is often impacted by the behavior of the prisoner.

It should be obvious that prison conditions are subject to politics; it is politics which passes the laws and operates the judicial system. How prisons are run is our public responsibility, and this is subject to our laws.Prisons are not meant to be, nor should they be, profit-making enterprises. They have functions to fulfill. That’s not to say that budget matters are unimportant, only that they cannot be the sole criterion for proper operation.Otherwise, inmates would be given no services at all. Rice is cheap; rancid meat is really cheap. There would be no point worrying about rehabilitation, which can be expensive. Nobody cares what happens when they get out. Gulags give you a profit margin that would impress even Wall Street.

Government is not supposed to be a profit-making enterprise. But any governmental function, once privatized, becomes exactly that. Does anyone have to ask what happens to law enforcement and the judicial system once the state agrees to keep private prisons at 90% of capacity?How will the national parks be run when we privatize them, as some idiot politicians are advocating? What will the nation’s coastlines be like? Years ago, California voters approved the Coastal Initiative which protected it and secured public access; if and when that promise is broken, how long before only the wealthy can enjoy the beach?On a lighter note, how about privatizing the military? It’s being done, you know. When Obama announced the "withdrawal" of U.S. troops from Iraq he’d promised only three years before, he didn’t bother to mention that remaining behind are an estimated 50,000 private troops, a private army serving the needs of the corporate mobsters who are figuring to loot what’s left.Xe, nee Blackwater, is a private army the government contracts with to perform certain tasks, often unspecified, which it feels the regular army cannot perform. Its soldiers are paid much more than GIs, and the casualty rate is much higher. Xe works for the U.S. or for Halliburton or Bechtel or whomever hires it. It is, as we discovered when Blackwater mercenaries murdered Iraqi civilians for pure sport, exempt from U.S. law and the control of the American government which hired it.

When private armies can operate outside the political control of a country, there is no democracy, even in form. We all know what it is, don’t we?Privatization of water, which I wrote about recently ("As Benign as Lucifer"), has enabled major corporations to destroy wide swaths of agriculture in India and elsewhere, causing widespread suicide as farmers by the tens of thousands have lost their land. Privatization of public services, public properties, public responsibilities, is a one-way ticket to hell.The riots in Greece are about privatization. That is the agenda of the International Monetary Fund, the consortium of bankers who run a large part of the world and want more. Through the mechanism of manufactured debt, the bankers are able to extort whatever "austerity" measures they want. These involve a reduction in the wages of public employees, a reduction in social services for the poor, and the privatization of what is publicly owned.

If you think we’re not headed in that direction in the United States, you’re dreaming. That’s what the budget arguments are about now, and the talk of America’s "debt." To whom is that "debt" owed? Why, to the bankers, of course, the same people whose looting of the Treasury caused this crisis in the first place. Pretty neat, huh?Having taken everything else, they are going after what’s left, and what’s left are the treasures of a nation, the wealth owned in common by its people.

We simply can’t let them get it.

Richard Raznikov is an attorney practicing in San Rafael, California. He blogs at News from a Parallel World.

Obama Can Do More on Oil Prices

Published on Tuesday, March 6, 2012 by Common Dreams

by Ralph Nader

Gasoline and heating oil prices are ratcheting up. In California, some motorists are paying over $5 per gallon. President Obama declared that "there is no quick fix" for this problem. Meanwhile, the hapless but howling Republicans are blaming him for the fuel surge as if he is a price control czar.

Indeed, President Obama has some proper power to cool off retail petroleum prices. David Stockman, President Ronald Reagan's Budget Director, said it plainly on CNN last week, "Stop beating the war drums right now [against Iran], and Obama could do that, and he could say the neocons are history." Having done his stint on Wall Street, Stockman knows that war talk by the war hawks inside and outside of our government is just what the speculators on the New York Mercantile Exchange want to hear as they bid up the price. Your gasoline prices are not charging up due to strains between supply and demand. Speculation, with those notorious derivatives and swaps, is what is poking larger holes in your fuel budget, according to Securities and Exchange Commission enforcement lawyers. The too-big-to-fail Wall Street gamblers - Goldman Sachs, JP Morgan Chase, Bank of America, Merrill Lynch, and Morgan Stanley - are at it again.

Dr. Mark Cooper of the Consumer Federation of America documented that speculation added $600 to the average family's gasoline expenditures in 2011. Earlier, the head of Exxon/Mobil estimated that speculation was responsible for over $40 per barrel in price increase at a time when oil was more than $100 per barrel.

Last June, the Commodity Futures Trading Commission (CFTC) Chairman, Gary Gensler, declared in New York City that "huge inflows of speculative money create a self-fulfilling prophecy that drives up commodity prices."

Mr. Gensler and the CFTC received more legislated authority to police these Wall Street gamblers, but key members of Congress refused to give him a budget to, in his words, "be a more effective cop on the beat," at a time of sharply-increasing trading volume. Congressional campaign budgets are being swelled by campaign contributions from those very Wall Street gamblers. This is called "cash-register politics." Meanwhile, you the people pay and pay at the pump and wonder why no one is doing anything about it.

But an inadequate budget only explains part of Mr. Gensler's problems. He is continually undermined by other CFTC Commissioners who do not want real enforcement action. He also seems to be wearing down under the pressure.

Back in the 1970s, a sudden increase in gasoline prices - even a few cents - led to an uproar among consumers and demands for regulation, price controls and other government action. Now that the New York Mercantile Exchange, with its big banking and hedge fund speculators loading up on fat profits and bonuses is right here in the U.S., officials are throwing up their hands saying "there are no quick fixes."

Yet by the constant Israeli-Obama-Hillary Clinton-Congressional-AIPAC belligerent talk about Iran developing a capability to produce nuclear weapons is provoking Tehran's warnings about the Straits of Hormuz, and the oil price speculators are having a field day with your gas dollars.

Senator Bernie Sanders (I-Vt.) regularly demands that that Obama's regulators impose limits on oil speculations. He asserts that the "skyrocketing price of gas and oil has nothing to do with the fundamentals of supply and demand." Even Goldman Sachs analyst, David Greely, claimed Wall Street speculation in the futures market is driving up oil prices.

In response to such clamorings, President Obama announced in April 2011 a new inter-agency working group to combat fraud. Don't hold your breath waiting for any action here.

So why doesn't President Obama invite the various industries such as the trucking and airline companies that are hurt by spiraling oil prices, together with consumer groups, motorist organizations, such as AAA and Better World Society, and the relevant government agencies to generate the pressure on Congress and the recalcitrant members of the CFTC to stop fronting for the Wall Street casino giants?

Mr. Obama and Energy Secretary Chu keep saying that there is enough oil in world markets and that speculatively-driven higher oil prices are undermining the U.S. economic recovery. Yet Mr. Obama seems unwilling to fully use his administration's existing authority to crack down on the surging speculation.

There is much more action possible under current statutory authority for the regulators to use and earn their salaries. They need to hear louder rumblings from the people. While the people need, whenever possible and safe, to walk short distances instead of drive there, if only to stiffen their determination to fight back in more than one way.

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

Costs of Climate Change Touching Down All Around: Insurers

Published on Saturday, March 3, 2012 by Common Dreams

Climate Change: Insurers Confirm Growing Risks, Costs

- Common Dreams staff

As southern Indiana, Kentucky and other midwestern states woke Saturday to devastated communities and a rising death toll, the world again was treated to pictures and video of mother nature's ferocious power and the merciless power of her most precise and terrifying storm, the tornado.  Most striking to some is the early arrival of this year's tornado season, which usually begins later in the spring and runs into summer.  For climate scientists, who have long predicted longer or more powerful storms and less predictable seasons, the events are an affirmation that offer no comfort.

Jerry Vonderhaar, left, comforts Charles Kellogg after severe weather hit the Eagle Point subdivision in Limestone County, Alabama (Photograph: Jeronimo Nisa/AP)

More striking this week, however, was a little noticed hearing -- just a day before these massively destruction storms -- where the nation's insurance and re-insurance companies came together to recognize the impact that climate change is having on their industry, a direct measure of the financial costs on US taxpayers and private businesses.

Reuters reports:

Powerful tornadoes raked across a wide swath of the Midwest and South on Friday, killing at least 28 people in four states and bringing the death toll to at least 41 from a week of deadly late-winter storms.

The twisters splintered homes, damaged a prison and tossed around vehicles across the region, leaving at least 13 people dead in southern Indiana, another 12 in neighboring Kentucky, two more in Ohio, and one in Alabama, officials said. In all, the latest line of storms battered a band of states from Ohio and Indiana on southward to Alabama and Georgia.

"We are no match for Mother Nature at her worst," Indiana Governor Mitch Daniels said in a statement, adding that he would visit the stricken southeast corner of the state on Saturday.

And the New York Times adds:

The storm systems stretched from the Gulf Coast to the Great Lakes and were so wide that an estimated 34 million people were at risk for severe weather, said Mike Hudson of the National Weather Service regional office in Kansas City, Mo. At one point, the storms were coming so fast that as many as four million people were within 25 miles of a tornado.

Why So Many Tornadoes?

According to the Associated Press:

While the main tornado season runs from spring to early summer, this year's early outbreaks show that tornadoes can form under a variety of conditions and strike during fall and winter, too. This year's mild winter and warm start to meteorological spring has upped the risk of dangerous storms.

"We've been in a very warm pattern all winter," said meteorologist Mark Rose of the National Weather Service in Birmingham, Ala. "Because it has been so mild, it increases our chances for severe weather."

That's the meteorologist explanation. Meteorologists as a professional class, however, have been very reluctant by and large to discuss the science behind global warming and climate change, as noted recently by Marvin Meados at the Huffington Post.

Climate scientists, though, are not, and their peer-reviewed research speaks volumes. Notably, a landmark 2007 study by NASA's Goddard Institute on Climate Science published this report, predicting larger and more violent thunderstorms and tornadoes in the United States as global warming trends continued. In part (emphasis added):

The central and eastern areas of the United States are especially prone to severe storms and thunderstorms that arise when strong updrafts combine with horizontal winds that become stronger at higher altitudes. This combination produces damaging horizontal and vertical winds and is a major source of weather-related casualties. In the warmer climate simulation there is a small class of the most extreme storms with both strong updrafts and strong horizontal winds at higher levels that occur more often, and thus the model suggests that the most violent severe storms and tornadoes may become more common with warming.

Climate Change: Insurers Confirm Growing Risks, Costs

In a press briefing on Thursday, representatives of the nation's top insurance companies, citing a year of history-making natural disasters and $1 billion-plus in damages, took a definitive stance, along with members of the US Senate, to confirm that the costs -- both to taxpayers and private businesses -- from extreme weather events will continue to climb due to the irrefutable march of global warming and climate change.

According to the Insurance Networking News, "representatives from The Reinsurance Association of America, Swiss Re and Willis Re and Ceres, a nonprofit organization that leads a national coalition of investors, environmental organizations and other public interest groups working with companies to address a variety of sustainability challenges, joined Sens. Bernie Sanders (I-Vt.) and Sheldon Whitehouse (D-R.I.) yesterday to discuss the growing financial impact of global warming."

Here's a short video segment from Thursday, Cost of Climate Change, featuring Sanders:

“From our industry’s perspective, the footprints of climate change are around us and the trend of increasing damage to property and threat to lives is clear,” said Franklin Nutter, president of the Reinsurance Association of America. “We need a national policy related to climate and weather.”

“As a member of the global insurance industry, we have witnessed the increased impact of weather-related events on our industry and around the world,” said Mark Way, head of Swiss Re's sustainability and climate change activities in the Americas. “A warming climate will only add to this trend of increasing losses, which is why action is needed now.”

Cynthia McHale, the insurance program director at Ceres, issued a more unequivocal statement: “Our climate is changing, human activity is helping to drive the change, and the costs of these extreme weather events are going to keep ballooning unless we break through our political paralysis, and bring down emissions that are warming our planet. If we continue on this path, extreme weather is certain to cause more homes and businesses to be uninsurable in the private insurance market, leaving the costs to taxpayers or individuals.”

***

Bill McKibben: A Link Between Climate Change and Joplin Tornadoes? Never!

Last year, in the wake of another outbreak of powerful and deadly tornadoes, author and climate activist Bill McKibben took up his pen to address the often cited reality that no single weather event, by itself, can be unequivocally attributed to climate change.  This, however, is a fact the avoids the uncomfortable truth that climate patterns are shifting -- and will continue to shift -- as global temperatures rise. The patterns are unmistakable, and we avoid them at our peril. His tongue-in-cheek approach did not deminish his message, and it works as well today in the wake of renewed tragedies as as it did in the wake of the Joplin tornado last year. He wrote:

Caution: It is vitally important not to make connections. When you see pictures of rubble like this week’s shots from Joplin, Mo., you should not wonder: Is this somehow related to the tornado outbreak three weeks ago in Tuscaloosa, Ala., or the enormous outbreak a couple of weeks before that (which, together, comprised the most active April for tornadoes in U.S. history). No, that doesn’t mean a thing.

It is far better to think of these as isolated, unpredictable, discrete events. It is not advisable to try to connect them in your mind with, say, the fires burning across Texas — fires that have burned more of America at this point this year than any wildfires have in previous years. Texas, and adjoining parts of Oklahoma and New Mexico, are drier than they’ve ever been — the drought is worse than that of the Dust Bowl. But do not wonder if they’re somehow connected.
 

If you did wonder, you see, you would also have to wonder about whether this year’s record snowfalls and rainfalls across the Midwest — resulting in record flooding along the Mississippi — could somehow be related. And then you might find your thoughts wandering to, oh, global warming, and to the fact that climatologists have been predicting for years that as we flood the atmosphere with carbon we will also start both drying and flooding the planet, since warm air holds more water vapor than cold air.

How Goldman Sachs Helped Mask Greece’s Debt

February 21st, 2012 | by Henry Richards | Published in Bureau Recommends

The 2,500 year-old Parthenon – still standing while Greece crumbles 

Yesterday European finance ministers agreed a second bailout for the Greek Government, worth more than 130 bn Euros. In light of the country’s staggering debt, and the risk it poses to the health of the entire Eurozone, it now appears that Greece should not have been permitted to join the Euro in the first place. So, why was it?

Nick Dunbar’s film on last night’s BBC Newsnight set out to provide at least part of the explanation.

The film shed new light on a slight of hand orchestrated by the investment bank Goldman Sachs, that allowed a large chunk of Greek public debt to seemingly disappear, and for the country’s finances to appear in better shape than they were in reality.

Back in 2001, the Greek government was pondering how it could meet the conditions of Euro membership. A key requirement of the Maastricht criteria, five criteria that determine whether an EU country is ready to adopt the euro, was that member states show ‘directionality’ in their public debt.

This meant that the country’s debt ratio needed to be going down year on year: ‘The national debt should not exceed 60% of GDP, but a country with a higher level of debt can still adopt the euro provided its debt levels are falling steadily’.

The solution they came up with was not to cut spending or raise taxes, as Dunbar incredulously points out, but to attempt to hide their debt. Enter Goldman Sachs, global investment banking and asset management company.

Newsnight revealed that one of the Goldman Sachs bankers hatched an ingenious plan to strike a financial deal called a ‘swap’ with the Greek Government, using it to hide 2.8bn Euros of national debt. The deal was legal but completely secret.

Back in 2003, Nick Dunbar revealed the existence of this deal. Far from ‘making something out of nothing’, as the Greek authorities alleged, Dunbar was very much on the right track. The new revelation made in last night’s film was that of the role played, or perhaps more accurately not played, by the European accounting agency, Eurostat.

Goldman Sachs passed Newsnight an email showing that they covered themselves by discussing the deal with Eurostat. Eurostat dismiss this discussion as having only concerned ‘general clarifications’, and maintain that they only became aware of the deal in 2010.

But regardless of exactly when European institutions, such as Eurostat, became aware of this deal, major concerns remain over why more attention was not paid to the employment of untested and unregulated financial products by European States. emerging from the innovation boom in the banking sector.

The deals were commonplace, Goldman Sachs said in their statement to Newsnight: ‘The swaps were one of several techniques that many European governments used to meet the terms of the [Maastricht] treaty.’

Last night’s film gained access to one of the key figures responsible for the deal, Christoforus Sardelis, then head of the Greek Public Debt Management Agency. He had been tasked with the job of bringing the national finances in line with Maastricht criteria.

With hindsight, it’s apparent to Sardelis that the deal was problematic. Under its terms, Goldman Sachs has made millions from the Greek government, yet the original 2.8bn Euros of debt has now ballooned to 5.7bn Euros. Nevertheless, this is a drop in the ocean of Greece’s £350bn debt.

To Sardelis, the deal may have been a bad one, but it wasn’t the cause of his country’s current woes, he says in the film. ‘It was a very sexy story, between two sinners, but the European crisis is not the child of the sex we had with Goldman Sachs’, he, rather salubriously, commented.

Watch the full programme here.

Related links:

• Bureau Recommends: Greek debt default is ‘almost inevitable’
• Bureau stories shortlisted for three One World Media Awards
• British surveillance software linked to Syrian regime
• Ethiopian man burns himself to death in protest
• Bureau Recommends: HMRC failures affect seven million

Bye Bye American Pie: The Challenge of the Productivity Revolution

by Robert Reich

Thursday, March 1, 2012

Here’s the good news. The economic pie is growing again. Growth in the 4^th quarter last year hit 3 percent on an annualized rate. That’s respectable – although still way too slow to get us back on track given how far we plunged.

Here’s the bad news. The share of that growth going to American workers is at a record low.

That’s largely because far fewer Americans are working. Although the nation is now producing more goods and services than it did before the slump began in 2007, we’re doing it with six million fewer people.

Why? Credit technology. Computers, software applications, and the Internet are letting us produce more with fewer people.

In theory, this is a huge plus. We can live better and have more time off.

But as Tonto asked the Lone Ranger, “who’s ‘we,’ kemosabe?”

The challenge at the heart of the productivity revolution – and it is a revolution – is how to distribute the gains. So far, we’ve been failing miserably to meet that challenge.

True, some of the gains are widely spread in the form of lower prices and higher value. My 3-year-old granddaughter gets more out of an i-Phone in five minutes than my 98-year-old father ever got out of reading the daily paper (putting to one side their relative capacities to process the information).

But many of the gains are distributed narrowly in the form of profits to owners, and fat compensation packages to the “talent.”

The share of the gains going to everyone else in the form of wages and salaries has been shrinking. It’s now the smallest since the government began keeping track in 1947.

If the trend continues, inequality will become ever more extreme.

We’ll also face chronically insufficient demand for all the goods and services the productivity revolution can generate. That’s because the rich save more of their earnings than everyone else, while middle and lower-income families – with fewer jobs or lower wages – no longer have the purchasing power to keep the economy going at full tilt. (Before 2008 they kept up their buying by sinking deep into debt. This proved to be an unsustainable strategy.)

Insufficient demand – as everyone but regressive supply-siders now recognize – is a big reason why the current recovery has been so anemic and the pie isn’t growing faster.

So while the productivity revolution is indubitably good, the task ahead is to figure out how to distribute more of its gains to more of our people.

One possibility: higher taxes on the rich that go into wage subsidies for lower-income workers, combined with job sharing.

We also need better schools (from early-childhood through young adulthood, followed by systems of lifelong learning) so everyone has a fair shot at a larger share of the gains.

Finally, the benefits of the productivity revolution should be turned into more abundant public goods – cleaner air and water, better parks and recreation, improved public health, and better public transit.

Regressive right wingers want Americans to believe we’ve been living beyond our means, and can no longer afford it.

The truth is just the reverse. Most Americans’ means haven’t kept up with what the economy could provide – if the fruits of the productivity revolution were more widely shared.

Regressives growl about America’s borrowing and tut-tut about future federal budget deficits. The reality is the world is willing to lend us vast amounts of money because we’re so productive. And the productivity revolution is making us ever more so.

Get it? The pie is growing again but most people aren’t getting much of a slice. That’s bad even for those getting the biggest pieces. They’d do better with smaller slices of a pie that grew much faster.

Naomi Klein: 'If You Take Climate Change Seriously, You Have to Throw Out the Free-Market Playbook'

Published on Wednesday, February 29, 2012 by Common Dreams

Naomi Klein on ideological impediments to addressing climate change and how to move forward

- Common Dreams staff

In an interview with Solutions, author and activist Naomi Klein discusses how market-based solutions are not going to meet the needs required to address climate change and how ideologies have hampered both the left and right in climate action. She also states that the Occupy movement has been "a game-changer." There is a way forward, Klein says, and it involves "changing the mix in a mixed economy."

* * *

Throwing Out the Free Market Playbook: An Interview with Naomi Klein

from Solutions

Perhaps one of the most well-known voices for the Left, Canadian Naomi Klein is an activist and author of several nonfiction works critical of consumerism and corporate activity, including the best sellers No Logo (2000) and Shock Doctrine (2007).

In your cover story for the Nation last year, you say that modern environmentalism successfully advances many of the causes dear to the political Left, including redistribution of wealth, higher and more progressive taxes, and greater government intervention and regulation. Please explain.

The piece came out of my interest and my shock at the fact that belief in climate change in the United States has plummeted. If you really drill into the polling data, what you see is that the drop in belief in climate change is really concentrated on the right of the political spectrum. It’s been an extraordinary and unusual shift in belief in a short time. In 2007, 71 percent of Americans believed in climate change and in 2009 only 51 percent believed—and now we’re at 41 percent. So I started researching the denial movement and going to conferences and reading the books, and what’s clear is that, on the right, climate change is seen as a threat to the Right’s worldview, and to the neoliberal economic worldview. It’s seen as a Marxist plot. They accuse climate scientists of being watermelons—green on the outside and red on the inside.

It seems exaggerated, but your piece was about how the Right is in fact correct.

I don’t think climate change necessitates a social revolution. This idea is coming from the right-wing think tanks and not scientific organizations. They’re ideological organizations. Their core reason for being is to defend what they call free-market ideology. They feel that any government intervention leads us to serfdom and brings about a socialist world, so that’s what they have to fight off: a socialist world. Increase the power of the private sector and decrease the public sphere is their ideology.

You can set up carbon markets, consumer markets, and just pretend, but if you want to get serious about climate change, really serious, in line with the science, and you want to meet targets like 80 percent emissions cuts by midcentury in the developed world, then you need to be intervening strongly in the economy, and you can’t do it all with carbon markets and offsetting. You have to really seriously regulate corporations and invest in the public sector. And we need to build public transport systems and light rail and affordable housing along transit lines to lower emissions. The market is not going to step up to this challenge. We must do more: rebuild levees and bridges and the public sphere, because we saw in Katrina what happens when weak infrastructure clashes with heavy weather—it’s catastrophe. These climate deniers aren’t crazy—their worldview is under threat. If you take climate change seriously, you do have to throw out the free-market playbook.

"If you take climate change seriously, you do have to throw out the free-market playbook."

What is the political philosophy that underscores those who accept climate change versus those who deny it?

The Yale cultural cognition project has looked at cultural worldview and climate change, and what’s clear is that ideology is the main factor in whether we believe in climate change. If you have an egalitarian and communitarian worldview, and you tend toward a belief system of pooling resources and helping the less advantaged, then you believe in climate change. And the stronger your belief system tends toward a hierarchical or individual worldview, the greater the chances are that you deny climate change and the stronger your denial will be. The reason is clear: it’s because people protect their worldviews. We all do this. We develop intellectual antibodies. Climate change confirms what people on the left already believe. But the Left must take this confirmation responsibly. It means that if you are on the left of the spectrum, you need to guard against exaggeration and your own tendency to unquestioningly accept the data because it confirms your worldview.

Members of the Left have been resistant to acknowledging that this worldview is behind their support of climate action, while the Right confronts it head on. Why this hesitancy among liberals?

There are a few factors at work. Climate change is not a big issue for the Left. The big left issues in the United States are inequality, the banks, corporate malfeasance, unemployment, foreclosures. I don’t think climate change has ever been a broad-based issue for the Left. Part of this is the legacy of siloing off issues, which is part of the NGO era of activism. Climate change has been claimed by the big green groups and they’re to the left. But they’re also foundation funded. A lot of them have gone down the road of partnerships with corporations, which has made them less critical. The discourse around climate change has also become extremely technical and specialized. A lot of people don’t feel qualified and feel like they don’t have to talk about it. They’re so locked into a logic of market-based solutions—that the big green groups got behind cap and trade, carbon markets, and consumer responses instead of structural ones—so they’re not going to talk about how free trade has sent emissions soaring or about crumbling public infrastructure or the ideology that would rationalize major new investments in infrastructure. Others can fight those battles, they say. During good economic times, that may have seemed viable; but as soon as you have an economic crisis, the environment gets thrown under the bus, and there is a failure to make the connection between the economy and the climate crisis—both have roots in putting profits before people.

You write in your article, “After years of recycling, carbon offsetting, and light-bulb changing, it is obvious that individual action will never be an adequate response to the climate crisis.” How do we get the collective action necessary? Is the Occupy movement a step in the right direction?

The Occupy movement has been a game changer, and it has opened up space for us to put more radical solutions on the table. I think the political discourse in the United States is centered around what we tell ourselves the American public can handle. The experience of seeing these groups of young people put radical ideas on the table, and seeing the country get excited by it, has been a wake up call for a lot of people who feel they support those solutions—and for those who have said, “That’s all we can do.” It has challenged the sense of what is possible. I know a lot of environmentalists have been really excited by that. I’m on the board of 350.org, and they’ll be doing more and more work on the structural barriers to climate action. The issue is why? Why do we keep losing? Who is in our way? We’re talking about challenging corporate personhood and financing of elections—and this is huge for environmental groups to be moving out of their boxes. I think all of the green organizations who take corporate money are terrified about this. For them, Occupy Wall Street has been a game changer.

"The Occupy movement has been a game changer, and it has opened up space for us to put more radical solutions on the table."

What comes after communism and capitalism? What’s your vision of the way forward?

It’s largely about changing the mix in a mixed economy. Maybe one day we’ll have a perfect “ism” that’s post-communism and -capitalism. But if we look at the countries that have done the most to seriously meet the climate challenge, they’re social democracies like Scandinavia and the Netherlands. They’re countries with a strong social sphere. They’re mixed economies. Markets are a big part, but not the only part, of their economies. Can we meet our climate targets in a system that requires exponential growth to continue? Furthermore, where is the imperative of growth coming from? What part of our economy is demanding growth year after year?

If you’re a locally based business, you don’t need continual growth year after year. What requires that growth is the particular brand of corporate capitalism—shareholders who aren’t involved in the business itself. That part of our economy has to shrink, and that’s terrifying people who are deeply invested in it. We have a mixed economy, but it’s one in which large corporations are controlled by outside investors, and we won’t change that mix until that influence is reduced.

Is that possible?

It is if we look at certain choke points like corporate personhood and financing, and it makes sense for us to zero in on aspects of our system that give corporations massive influence. Another is media concentration. If you had publicly financed elections, you’d have to require public networks to give airtime to candidates. So the fact that networks charge so much is why presidential elections cost more than a billion dollars, which means you have to go to the 1 percent to finance the elections. These issues are all linked with the idea that corporations have the same free-speech rights as people, so there would also be more restrictions on corporate speech.

Entrepreneur and writer Peter Barnes has argued that what’s missing is adequate incorporation of the “commons sector” in the economy—public goods like natural and social capital. “Capitalism 3.0” he calls it, which we’d achieve not by privatizing these goods but by creating new institutions such as public-asset trusts. What’s your opinion of this approach?

I definitely think it’s clear that the road we’ve been on—turning to the private sector to run our essential services—has proven disastrous. In many cases, the reason why it was so easy to make arguments in favor of privatization was because public institutions were so cut off and unresponsive and the public didn’t feel a sense of ownership. The idea that a private corporation has valued you as a customer was a persuasive argument. Now it turns out both models have failed. So this idea that there is a third way—neither private nor state-run public—is out there.