by Frank Thomas
Is America in the twilight zone of cultural and social collapse? Morris Berman, a much recognized and, yes, controversial, social critic and cultural historian, thought so ten years ago when he wrote the notable and much criticized book, “The Twilight of American Culture.” Another tongue-lashing excoriation of our culture followed in one his recent books, “Dark Ages America: The Final Phase of Empire”
In “The Twilight of American Culture,” Berman focused on America’s cultural breakdown as reflected in the growing alienation, inequities, pervasive anti-intellectualism, illiteracy, and decline in educational quality .
He drew anecdotal similarities of the sad state of American society to the social class differences and anti-intellectualism of the Roman Empire before its fall. Berman prophetically predicted back in 2000 that America was moving in a direction best described as a culturally mind-numbing lack of critical thinking … a societal consciousness and identity drowning in divisive, mean-spirited dialogue, and lost in a purposeless, paranoid excessive commercialism. He saw American culture as, quite simply, in a mess going into the 21st century.
Berman warned we are moving in the direction of no longer having a history, a life, a consciousness apart from the business culture. The latter is putting itself beyond our power of imagining because it has become our imagination, it has become our power to envision, and describe, and theorize, and resist, and share. Hype and life have merged in politics, in the media, in computers and the Internet, in our general lifestyle. This process destroys the values lying at the core of any civilization, ours being no exception – namely, the ability to distinquish between quality and garbage, the dispassionate pursuit of truth, the committment to critical thinking, the fostering of an equitable playing field and sharing in society’s progress.
Instead, where are we now? We are truly a divided society, incapable of communicating and acting together in the best interests of all citizens. Political parties and leaders are ideologically frozen, unable to bring the balanced, unvarnished, undogmatized news of what needs to be done to come out of our systemic cultural and economic decline. Ten years ago Berman vividly saw the seeds of this self-destruction.
But what really piqued my interest in his book was his synopsis and connection of the eerie parallels of our cultural mess to civilizations in decline. Berman described four factors present when a civilization is collapsing or near the parameters of collapse:
Accelerating social and economic inequality which is structural in nature based on a core of industrial and technical elite regions (class divides) versus a periphery of exploited regions (class divides) resulting in a broad social and economic stratification.
Declining marginal returns with regard to investment in organizational solutions to socio-economic problems. For example, short of privatization, entitlement systems (e.g., Social Security, Medicare) become unsustainable due to the increased aging of society and a sharply falling fertility rate.
Rapidly dropping levels of literacy, critical understanding, self-critique, and general intellectual awareness. For example, there is the dumbing down of the public school educational system where teachers effectively become baby sitters. There is the commercialization of education where the university culture is ever more devoted to consumption, entertainment or pleasing the student. A general educational mediocritizing and a hostility to intelligence emerges – evidenced in my recent summary of the shockingly poor U.S. results in the international PISA TESTS for 15 years olds.
Spiritual death – the emptying out of cultural content and the freezing or repackaging of it in formulas – kitsch, in short. The pervasiveness of kitsch, or hype, form part of a spiritual death due to the commercial domination of our lives. Hype is life. Commercial messages fill practically all the empty spaces in our culture. This works against depth and self-reflection. It leads to an inability to think except by slogans. When that part of the mind seeking to maintain adult behavior, social norms, and standards collapses and adolescent attitudes and corporate values merge, life becomes merely a question of what is popular.
These were four very penetrating perceptions by Morris Berman made ten years ago. Admittedly, Berman tends to generalize and rage acerbic about America’s societal dysfunctions. However, his four observations portending a culturally collapsing society ring loud and clear today. For today, a deeply rooted cynicism and distrust greets attempts by anyone in the governing establishment to come together effectively to solve critical problems. Not surprisingly, Obama’s overtures to Republicans and the business world have immediately been met with accusations of gross naivete and courting the devil (e.g., appointing GE’s CEO as the head of a team to spur U.S. job growth). This cynicism and absence of civility in turn contributes to paralyzed governance … a do-nothing-band-aid policy-making contamination I call compromised compromising. The recently approved health care plan is an example of this.
I believe most Americans – conservatives, liberals, progressives – are sickened by the money and might decides/the winner-takes-all/consume, consume . middle class with stagnant wages, corrupted perversion of American politics, economy, and culture. A culture where stigmatization, ideologically pure self-rightousness, and ridiculously dumb demagoguery is the reigning religion. We deserve leaders who appeal to our saner, better instincts of balanced civil discourse and reasoned argumentation of options which allows people to coalesce around common purposes and recognition as well as for accumulation of wealth. The problems are simply too complex to be resolved through the narrow, self-interested prism of one ideological philosophy. A demogogic rivalry of name calling, bald-faced repetitive lying to the public, passing a litmus test of who’s the most thoroughbred conservative, who’s the most genuine protector of our constitutional rights, individual freedoms and liberties has made an arrogant, farcical, running mockery of our democratic system.
In the words of Francis Fukuyama:
“All human beings believe they have a certain inherent worth and dignity. When that worth is not recognized adequately by others, they feel anger; when they do not live up to others’ evaluation, they feel shame; and when they are evaluated (and compensated) appropriately, they feel pride. If we understand, then, that economic life is pursued not simply for the sake of accumulating the greatest number of material goods possible but also for the sake of recognition (and respect), then the critical interdependence of capitalism and liberal democracy becomes clearer.”
Morris Berman’s vituperative critique of the American Way, while out of bounds here and there, is right on when he implies we have lost the way in balancing social capital with a dynamic, prosperous capitalist economy. Europe is far more advanced in recognizing the inherent interdependence here of social capital and commercial capital (e.g., “We are all in this life together”) for achieving a stable democracy and a solid measure of cultural cohesiveness.
BUT WE HAVE LOST THE WAY. And in the process we are facilitating, as Berman writes, the breakdown of our culture and egalitarian democractic principles … including an economic justice that recognizes the worker’s labor for its true worth in relation to others. Thus, creative and pragmatic goverance in the public’s general interest is sacrificed to greedy, powerful special interests operating globally for maximum corporate profit and shareholder wealth.
This all means ordinary people are losing, the politics of money is winning, and the art of fiscal sanity while bringing jobs back is being buried in political-economic obfuscation that brings credibility to Berman’s “dark”prognosis of America’s inevitable duplication of ROME’s cultural collapse.
Private laboratories are working hard to come up with the next new drug, the next new medical procedure. Arguably, this represents an advance in medical science that will benefit us all some day. The problem is that the pharmaceutical companies and the medical equipment companies all expect to make a hefty profit if, indeed, they do come up with something worthy of an advance in curing disease and/or prolonging life. The result of all this feverish activity is that there are more devices, more procedures, more drugs all of which purport to save and prolong lives and all of which cost big money. Who is going to pay for it all?
This is the main reason why the cost of Medicare and private health insurance is going up. Everyone wants access to the latest medical technology, but that technology is increasingly expensive. Is the government going to pay or are private health insurance companies going to pay or both? Most of the payouts occur in the last three months of life. One might argue we would be better off with the medical technology of 30 years ago and just be resigned to dying three months sooner albeit with a substantial cost savings, money which could be passed on to the next generation.
This is from Time magazine:
Americans tend to assume that more is better, especially when it comes to the heroic brand of try-everything medicine we've watched on ER and House M.D. But overtreatment is a national scandal. It's bad for our health: with medical errors now estimated to be our eighth leading cause of death, drugs, procedures and hospital stays can be risky (as well as painful, time-consuming and wallet-straining) even when they're necessary. It's also bad for the economy: health costs are bankrupting small businesses and even conglomerates like General Motors as well as millions of families. And it's awful for the country: Medicare is on track to go broke by 2017, and our long-term budget problems are primarily health-cost problems. At current growth rates, health spending by the Federal Government alone would increase from 5% to 20% of the economy by 2050; Social Security, by contrast, would increase only from 5% to 6%.
But one man's unnecessary costs are another man's profits; lobbyists for drug- and devicemakers, hospitals, doctors and insurers are already fighting to make sure their slices of the more than $2 trillion health-care pie aren't nibbled by reform. Senate Republicans just introduced "antirationing" legislation to bar the government from using comparative-effectiveness research — "a common tool used by socialized health-care systems" — for cost control. They paused in their usual attacks on Obama's profligacy just long enough to attack his stinginess, warning that he will use evidence as an excuse to micromanage the art of medicine, stifle innovation and deny Americans their right to choose whatever treatments they want — or at least their right to taxpayer reimbursements.
A way out of this dilemma of rapid cost escalation is to follow the model of the Mayo clinic. Instead of a "fee for service" model, which rewards doctors for doing more procedures and demanding more visits, the Mayo clinic puts doctors on salary thus undercutting the perverse incentives of the fee-for-service model. Drug companies, in order to get FDA approval, just have to prove that their drug is slightly better than a placebo. They don't have to prove that it is any better than an existing drug. So you have many copy cat drugs on the market just sufficiently different from an existing drug in order to get a patent. Drugs are developed based on their profit-making potential rather than on their ability to cure illness. Patients are ordered to have unnecessary MRIs just to pay for the MRI machines. There is little data available on comparing new procedures with existing procedures in terms of their ability to obtain better health outcomes.
Located in Rochester, Minnesota, the Mayo clinic has implemented procedures that result in high quality care but at a low cost:
Mayo has computerized medical records that provide instant access to patient histories, improving information-sharing, reducing pharmacy errors and eliminating the hassle of tracking down charts. The staff cafeteria even gives away fruit, illustrating Mayo's apple-a-day commitment to prevention and wellness. Like other low-cost, high-quality institutions — the Cleveland Clinic, Geisinger in Pennsylvania, Intermountain in Utah — Mayo is dedicated to offering integrated and coordinated care, with a broad network of providers working together to reduce redundant tests and office visits, improve disease management and generally avoid treating patients like pinballs. "It's a team sport here," says David Lewallen, a Mayo orthopedic surgeon. "A bunch of tennis players doing their own thing just doesn't work — it's too expensive, and it's bad medicine. We only do things to help the patient, and we're all looking over each other's shoulders."
Evidence-based medicine, the kind the Mayo clinic espouses, is not the most profitable kind of medicine, and therein lies the rub. Last year the Mayo clinic lost money on its Medicare patients. And the profit making medical industry, the drug companies, devicemakers and medical specialists, who stand to lose money if the profit is taken out of medicine, are all allied against any government program including Obamacare which tends to diminish their profits. Currently, Medicare covers just about any kind of treatment that purports to be effective without any consideration of cost whatsoever. Lobbyists for the profit making medical world and their shills in Congress want to keep it that way.
In the final analysis the only way to reduce the skyrocketing cost of medical care is to take the profit motive out of it altogether. The Mayo Clinic model is a start, but the profit motive has to be taken out of medical and pharmaceutical research and device development as well. The only way to do that is to have the research done at government labs by researchers who are on salary and don't stand to reap a profit from each new drug and each new medical device. And more emphasis needs to be put on keeping patients healthy rather than curing them once they get sick. That means more physical and nutritional education in the schools and more preventive care in the doctor's office. Changing lifestyles will do more to reduce medical costs than anything else. But in a profit making system the doctor has no incentive to make his patients healthier. After all he or she only gets paid when they are sick. This perverse incentive needs to be taken out of medicine. Obama tried to do it with Obamacare but failed to get it passed into law. So the cost containment aspect of Obamacare was a complete failure thanks to Republican obstructionism and lobbyist fueled resistance.
Right now we don't have a health care system; we have a sick care system, and the sicker the American public becomes, the more profits the drug companies and device makers reap. Obesity in the American public is only getting worse thanks to cheap fast and processed foods that are based on sugar, salt and fat. Snack has become a completely accepted way of life. It used to be that snacking between meals was discouraged. Thanks to a successful PR campaign against smoking and the proof that it results in cancer, the American public has been weaned off smoking. Now we need an equally extensive campaign for lifestyle fitness focusing on diet and exercise without the hucksterism of diet and exercize crazes brought to you via TV advertisements. Fast food needs to be discouraged in favor of slow food. Time has to be made available for physical exercise and stress reduction. Weight reduction should be paramount for obese people. The campaign for better health needs to start in the public school system at a young age and be continued throughout one's entire educational career. Nutritional literacy as well as financial literacy needs to be made a major goal.
Here they come looking for an out-clause and a way to keep their coffers full. We need to repeat a simple mantra: No more bailouts for Wall Street.
By Joshua Holland, January 27, 2011, from Alternet
They committed widespread fraud – largely whitewashed by the corporate media – and, in the process, threw the economy into a tailspin. They've broken into and stolen people's homes, and, in the name of “efficiency,” bilked state governments out of billions of dollars in real estate transfer fees. They've even admitted to ripping off – and foreclosing on – soldiers deployed overseas, in violation of the law.
They got rich in the process. The mortgage industry did all of that for a fat stream of profits while the going was good, but now that they face the prospect of being held accountable by the justice system -- as would you or I had we routinely broken the laws -- analysts expect the “banksters” to lobby hard for another bailout.
They won't be looking for the Fed to shower them with free money or buy up trillions worth of “toxic assets” weighing down their books – they already got that sort of bailout once, the voters detested it and with the Tea Party ascendant in the GOP, the political atmosphere precludes a repeat performance.
No, the mortgage industry – with the help of its political lackeys in Washington-- is reportedly looking for a judicial bailout that would retroactively allow loan servicers to foreclose on properties without running up the costs of getting their paperwork in order, and limit investors' – and possibly the states' – ability to sue them for the mess they created in the housing market.
Third Way, the financial industry's Trojan Horse in Democratic policy circles (which is very well represented in the White House), released a policy memo last week urging Congress to step into the chaos caused by the banks' “robo-signing” scandal and immunize the banks from liability from the robo-signing mess (PDF).
As economics writer Yves Smith noted, the proposal “advocates Congressional intervention into well established, well functioning state law.”
This proposal guts state control of their own real estate law when the Supreme Court has repeatedly found that "dirt law" is not a Federal matter. It strips homeowners of their right to their day in court to preserve their contractual rights, namely, that only the proven mortgagee, and not a gangster, or in this case, bankster, can take possession of their home.
This sort of protection is fundamental to the operation of capitalism, so it's astonishing to see neoliberals so willing to throw it under the bus to preserve the balance sheets of the TBTF banks. Readers may recall how we came to have this sort of legal protection in the first place. England learned the hard way in the 17th century what happens with low documentation requirements: abuse of court procedures, perjury and corruption become the norm.
Lenders are playing down the mess they created, suggesting they're simply dealing with some isolated “paperwork” issues. But the Third Way memo comes in the wake of a series of judicial setbacks for the banks that indicate their legal problems are likely to be anything but “minor.”
Last year, the New York Times reported that “in numerous opinions, judges have accused lawyers of processing shoddy or even fabricated paperwork in foreclosure actions when representing the banks.” In both New York and Florida, courts “have begun requiring that lawyers in foreclosure cases vouch for the accuracy of the documents they present,” which “could open lawyers to disciplinary actions that could harm or even end careers.” Stephen Gillers, an expert in legal ethics at New York University, told the Times, “when ... it turns out there are documents being given to the courts that have no basis in reality, the profession gets a very big black eye.” The bar association is, understandably, up in arms over the requirement.
Last week, in response to a class action suit, GMAC Mortgage thew out approximately 1,000 foreclosure filings in Maryland that had been “verified” – at a rate of as many as 10,000 per week – by infamous robo-signer Jeffrey Stephan. Anthony Depastina, an attorney for Civil Justice, Inc., a public interest law-firm representing the mortgage-holders, explained to AlterNet that in an affidavit, “the signer is supposed to attest that they verified the numbers … they're attesting under the penalties of perjury that the information contained in the affidavit ...are true and accurate. Plus they're supposed to sign it in the presence of a notary.” But in the robosigning scandal, “none of this happened.”
In fact, the Associated Press reported that “financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in 'foreclosure expert' jobs with no formal training.” In depositions reviewed by the AP, “many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word 'affidavit.'"
The Maryland case was the first ever “defensive” class action suit filed. GMAC responded by offering to dismiss the foreclosure proceedings against the homeowner whose case sparked the suit. “We argued that was just an attempt to get around what was right,” said Depastina. “At the end of the day we would have to file on behalf of some other Maryland homeowner after we found there was a falsified affidavit.” GMAC can refile the foreclosures, but they have to start at square one.
Depastina said he expects these issues to extend far beyond the home mortgage industry. It's “only symptomatic of a greater attempt by lending institutions of all types to circumvent the processes set up by the courts, the judiciary and legislatures in an effort just to increase their bottom line,” he said. “And I don't think the foreclosure industry is the only problem – you're going to see it in credit cards, in debt buying, in assignment of debt, in the auto industry... You know, the same individuals signed off on billions of dollars of debt every year. They're supposed to verify all that debt information. Do they verify it? I have my doubts.”
The case came only weeks after the Massachusetts Supreme Court dealt the banks a serious blow in US Bank National Association (as trustee) vs. Antonio Ibanez. The case hinged on whether the banks (the case combined two separate foreclosure proceedings) actually had clear titles for properties they claimed to own.
At the heart of the case was the practice of slicing up and bundling hundreds of loans into investment vehicles – “securitizing” the debt. In the process, loans change hands a lot – they were assigned and reassigned from investor to investor, and a servicer dealt with the homeowners. But along the way, paperwork was required by law each time the mortgage changed hands. When the banks showed up to to foreclose, they didn't have the required chain of title – the court found they were essentially trying to foreclose on properties they didn't own.
The ruling only applied to Massachusetts, but it sent shockwaves across the mortgage industry. According to Harvard legal scholar Adam Levitin, “there are lots of securitization deals where the mortgages might not be enforceable in title theory states like Massachusetts … and that could well be fatal to enforcement of these trusts' mortgages in Massachusetts at the very least, and possibly in” many more states.
Then there is the banks' potentially massive liability stemming from the MERS mess. MERS is a private company established by the banking industry to allow investors to instantly trade debt back and forth. The idea was simple: instead of assigning and reassigning loans and filing the required paperwork with the states, MERS would oversee a database of all of the securitized mortgages in the US – about half of the total number of loans. It would theoretically “own” all the securitized loans, and transfer them within its network instantaneously. The problem is that when a deed changes hands, a recording fee has to be paid to the state or locality where the property is located, and MERS allowed investors to skirt these fees, costing communities untold billions.
Creating a privately operated registry of deeds in order to skirt local filing requirements was a remarkable act of hubris. “Fees are paid for a service performed, and if a document is eliminated because it is no longer necessary, no fee is due because there is nothing to record,’’ reads a statement on the MERS Web site. But that's nonsense; when a state charges a $50 filing fee, it doesn't represent the cost of the piece of paper. Those fees make up the revenues that finance state and local government and all the services they provide.
But the key point is that they're required to file those documents by law, a law the home loan industry believes doesn't apply to mortgage-lenders. Now they face not only investigations by all 50 state attorneys general, but potentially a wave of lawsuits from investors who may claim that the losses they took on these mortgage backed securities weren't just the product of the market's ups and downs, but a consequence of widespread misrepresentation on the part of Big Finance.
But the damage is, unfortunately, in no way being contained on Wall Street. According to data compiled by Housing Wire, the robo-signing boondoggle is largely responsible for a 50 percent drop in the number of foreclosures being completed over the past few months, shifting 250,000 from 2010 to 2011. It's good for those homeowners to stay in their places for another year, but potentially disastrous for the economy to have a large overhang of distressed properties weighing down the market. According to an analysis by Barclay's Capital, cited by Housing Wire, “If the worst happens... [if] widespread issues are found throughout the process and foreclosures are not allowed to be carried out, the damage could mean frozen home sales and new lending nationwide.”
In other words, the uncertainty around these chains of ownership may add to the “shadow inventory” of distressed properties that will come onto the market at some point down the road, a number estimated to be as high as seven million homes.
There are also untold numbers of homes that the banks are simply walking away from. Just as many homeowners have seen the value of “strategically defaulting” on their loans, these are properties so far under water that lenders have no financial incentive to take possession of and maintain them until they can be sold. A study conducted in Chicago by the Woodstock Institute, an advocacy group, found 1,896 “red flag” homes in the city that appeared to have been abandoned by loan servicers. The properties were disproportionally located in already distressed low-income communities.
Woodstock Institute VP Geoff Smith told AlterNet that the abandoned properties “add to the destabilization of these neighborhoods. They further effect surrounding property values.” He added that from the city's perspective, “a lot of times they have to step in and secure these properties because nobody else will. That's a cost to the city there. If there's criminal activity, the city has to respond, adding to the cost. They have to demolish these properties in many cases, again adding to the cost for the city. All of this is an extra layer of impact for communities that are already experiencing some distress.”
According to Smith, the issue “raises questions about servicer accountability. How are [they] accountable for the decisions they make and the impact those decisions have on communities? If it's not in their economic interests to take possession of the properties, then how does that effect the community” as a whole?”
The answer is that the consequences are disastrous, which may in turn provide the argument that the mortgage industry will use to seek judicial relief from the mess it created. It's a good bet that they will once again claim they are “too big to fail” – or too big to bear the brunt of widespread litigation on the part of struggling homeowners, investors and state governments.
It would be scandalous to reward the lending industry with an effective pardon for its wanton, fraudulent practices. The good news is that the banksters face a much steeper climb this time around. In October, only 26 percent of the public said that George W. Bush's Wall Street bailout was “good for the country, and disapproval spanned the political spectrum.
So defeating a judicial bailout for the loan industry should be a winnable fight against an opponent that the public views as a toxic influence on the economy. Back in November, rumors floated around about a potential “MERs whitewash bill” that would immunize the firm from lawsuits, but such a bill never materialized in Congress. Reaction to the trial balloon was swift and angry, and nobody on Capitol Hill has dared to introduce such a measure.
If a judicial fix ends up being debated, the outcome will likely be determined by which side wins the battle of narratives. The lending industry will say that it's necessary to keep the Main Street economy afloat. In order to defeat that message, opponents need to repeat a simple mantra: No more bailouts for Wall Street.
Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy (and Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America). Drop him an email ( firstname.lastname@example.org ) or follow him on Twitter.
Why Military Spending Remains Untouchable
In defense circles, “cutting” the Pentagon budget has once again become a topic of conversation. Americans should not confuse that talk with reality. Any cuts exacted will at most reduce the rate of growth. The essential facts remain: U.S. military outlays today equal that of every other nation on the planet combined, a situation without precedent in modern history.
The Pentagon presently spends more in constant dollars than it did at any time during the Cold War -- this despite the absence of anything remotely approximating what national security experts like to call a “peer competitor.” Evil Empire? It exists only in the fevered imaginations of those who quiver at the prospect of China adding a rust-bucket Russian aircraft carrier to its fleet or who take seriously the ravings of radical Islamists promising from deep inside their caves to unite the Umma in a new caliphate.
What are Americans getting for their money? Sadly, not much. Despite extraordinary expenditures (not to mention exertions and sacrifices by U.S. forces), the return on investment is, to be generous, unimpressive. The chief lesson to emerge from the battlefields of the post-9/11 era is this: the Pentagon possesses next to no ability to translate “military supremacy” into meaningful victory.
Washington knows how to start wars and how to prolong them, but is clueless when it comes to ending them. Iraq, the latest addition to the roster of America’s forgotten wars, stands as exhibit A. Each bomb that blows up in Baghdad or some other Iraqi city, splattering blood all over the streets, testifies to the manifest absurdity of judging “the surge” as the epic feat of arms celebrated by the Petraeus lobby.
The problems are strategic as well as operational. Old Cold War-era expectations that projecting U.S. power will enhance American clout and standing no longer apply, especially in the Islamic world. There, American military activities are instead fostering instability and inciting anti-Americanism. For Exhibit B, see the deepening morass that Washington refers to as AfPak or the Afghanistan-Pakistan theater of operations.
Add to that the mountain of evidence showing that Pentagon, Inc. is a miserably managed enterprise: hide-bound, bloated, slow-moving, and prone to wasting resources on a prodigious scale -- nowhere more so than in weapons procurement and the outsourcing of previously military functions to “contractors.” When it comes to national security, effectiveness (what works) should rightly take precedence over efficiency (at what cost?) as the overriding measure of merit. Yet beyond a certain level, inefficiency undermines effectiveness, with the Pentagon stubbornly and habitually exceeding that level. By comparison, Detroit’s much-maligned Big Three offer models of well-run enterprises.
All of this takes place against the backdrop of mounting problems at home: stubbornly high unemployment, trillion-dollar federal deficits, massive and mounting debt, and domestic needs like education, infrastructure, and employment crying out for attention.
Yet the defense budget -- a misnomer since for Pentagon, Inc. defense per se figures as an afterthought -- remains a sacred cow. Why is that?
The answer lies first in understanding the defenses arrayed around that cow to ensure that it remains untouched and untouchable. Exemplifying what the military likes to call a “defense in depth,” that protective shield consists of four distinct but mutually supporting layers.
Institutional Self-Interest: Victory in World War II produced not peace, but an atmosphere of permanent national security crisis. As never before in U.S. history, threats to the nation’s existence seemed omnipresent, an attitude first born in the late 1940s that still persists today. In Washington, fear -- partly genuine, partly contrived -- triggered a powerful response.
One result was the emergence of the national security state, an array of institutions that depended on (and therefore strove to perpetuate) this atmosphere of crisis to justify their existence, status, prerogatives, and budgetary claims. In addition, a permanent arms industry arose, which soon became a major source of jobs and corporate profits. Politicians of both parties were quick to identify the advantages of aligning with this “military-industrial complex,” as President Eisenhower described it.
Allied with (and feeding off of) this vast apparatus that transformed tax dollars into appropriations, corporate profits, campaign contributions, and votes was an intellectual axis of sorts -- government-supported laboratories, university research institutes, publications, think tanks, and lobbying firms (many staffed by former or would-be senior officials) -- devoted to identifying (or conjuring up) ostensible national security challenges and alarms, always assumed to be serious and getting worse, and then devising responses to them.
The upshot: within Washington, the voices carrying weight in any national security “debate” all share a predisposition for sustaining very high levels of military spending for reasons having increasingly little to do with the well-being of the country.
Strategic Inertia: In a 1948 State Department document, diplomat George F. Kennan offered this observation: “We have about 50 percent of the world's wealth, but only 6.3 percent of its population.” The challenge facing American policymakers, he continued, was “to devise a pattern of relationships that will permit us to maintain this disparity.” Here we have a description of American purposes that is far more candid than all of the rhetoric about promoting freedom and democracy, seeking world peace, or exercising global leadership.
The end of World War II found the United States in a spectacularly privileged position. Not for nothing do Americans remember the immediate postwar era as a Golden Age of middle-class prosperity. Policymakers since Kennan’s time have sought to preserve that globally privileged position. The effort has been a largely futile one.
By 1950 at the latest, those policymakers (with Kennan by then a notable dissenter) had concluded that the possession and deployment of military power held the key to preserving America’s exalted status. The presence of U.S. forces abroad and a demonstrated willingness to intervene, whether overtly or covertly, just about anywhere on the planet would promote stability, ensure U.S. access to markets and resources, and generally serve to enhance the country’s influence in the eyes of friend and foe alike -- this was the idea, at least.
In postwar Europe and postwar Japan, this formula achieved considerable success. Elsewhere -- notably in Korea, Vietnam, Latin America, and (especially after 1980) in the so-called Greater Middle East -- it either produced mixed results or failed catastrophically. Certainly, the events of the post-9/11 era provide little reason to believe that this presence/power-projection paradigm will provide an antidote to the threat posed by violent anti-Western jihadism. If anything, adherence to it is exacerbating the problem by creating ever greater anti-American animus.
One might think that the manifest shortcomings of the presence/power-projection approach -- trillions expended in Iraq for what? -- might stimulate present-day Washington to pose some first-order questions about basic U.S. national security strategy. A certain amount of introspection would seem to be called for. Could, for example, the effort to sustain what remains of America’s privileged status benefit from another approach?
Yet there are few indications that our political leaders, the senior-most echelons of the officer corps, or those who shape opinion outside of government are capable of seriously entertaining any such debate. Whether through ignorance, arrogance, or a lack of imagination, the pre-existing strategic paradigm stubbornly persists; so, too, as if by default do the high levels of military spending that the strategy entails.
Cultural Dissonance: The rise of the Tea Party movement should disabuse any American of the thought that the cleavages produced by the “culture wars” have healed. The cultural upheaval touched off by the 1960s and centered on Vietnam remains unfinished business in this country.
Among other things, the sixties destroyed an American consensus, forged during World War II, about the meaning of patriotism. During the so-called Good War, love of country implied, even required, deference to the state, shown most clearly in the willingness of individuals to accept the government’s authority to mandate military service. GI’s, the vast majority of them draftees, were the embodiment of American patriotism, risking life and limb to defend the country.
The GI of World War II had been an American Everyman. Those soldiers both represented and reflected the values of the nation from which they came (a perception affirmed by the ironic fact that the military adhered to prevailing standards of racial segregation). It was “our army” because that army was “us.”
With Vietnam, things became more complicated. The war’s supporters argued that the World War II tradition still applied: patriotism required deference to the commands of the state. Opponents of the war, especially those facing the prospect of conscription, insisted otherwise. They revived the distinction, formulated a generation earlier by the radical journalist Randolph Bourne, that distinguished between the country and the state. Real patriots, the ones who most truly loved their country, were those who opposed state policies they regarded as misguided, illegal, or immoral.
In many respects, the soldiers who fought the Vietnam War found themselves caught uncomfortably in the center of this dispute. Was the soldier who died in Vietnam a martyr, a tragic figure, or a sap? Who deserved greater admiration: the soldier who fought bravely and uncomplainingly or the one who served and then turned against the war? Or was the war resister -- the one who never served at all -- the real hero?
War’s end left these matters disconcertingly unresolved. President Richard Nixon’s 1971 decision to kill the draft in favor of an All-Volunteer Force, predicated on the notion that the country might be better served with a military that was no longer “us,” only complicated things further. So, too, did the trends in American politics where bona fide war heroes (George H.W. Bush, Bob Dole, John Kerry, and John McCain) routinely lost to opponents whose military credentials were non-existent or exceedingly slight (Bill Clinton, George W. Bush, and Barack Obama), yet who demonstrated once in office a remarkable propensity for expending American blood (none belonging to members of their own families) in places like Somalia, Iraq, and Afghanistan. It was all more than a little unseemly.
Patriotism, once a simple concept, had become both confusing and contentious. What obligations, if any, did patriotism impose? And if the answer was none -- the option Americans seemed increasingly to prefer -- then was patriotism itself still a viable proposition?
Wanting to answer that question in the affirmative -- to distract attention from the fact that patriotism had become little more than an excuse for fireworks displays and taking the occasional day off from work -- people and politicians alike found a way to do so by exalting those Americans actually choosing to serve in uniform. The thinking went this way: soldiers offer living proof that America is a place still worth dying for, that patriotism (at least in some quarters) remains alive and well; by common consent, therefore, soldiers are the nation’s “best,” committed to “something bigger than self” in a land otherwise increasingly absorbed in pursuing a material and narcissistic definition of self-fulfillment.
In effect, soldiers offer much-needed assurance that old-fashioned values still survive, even if confined to a small and unrepresentative segment of American society. Rather than Everyman, today’s warrior has ascended to the status of icon, deemed morally superior to the nation for which he or she fights, the repository of virtues that prop up, however precariously, the nation’s increasingly sketchy claim to singularity.
Politically, therefore, “supporting the troops” has become a categorical imperative across the political spectrum. In theory, such support might find expression in a determination to protect those troops from abuse, and so translate into wariness about committing soldiers to unnecessary or unnecessarily costly wars. In practice, however, “supporting the troops” has found expression in an insistence upon providing the Pentagon with open-ended drawing rights on the nation’s treasury, thereby creating massive barriers to any proposal to affect more than symbolic reductions in military spending.
Misremembered History: The duopoly of American politics no longer allows for a principled anti-interventionist position. Both parties are war parties. They differ mainly in the rationale they devise to argue for interventionism. The Republicans tout liberty; the Democrats emphasize human rights. The results tend to be the same: a penchant for activism that sustains a never-ending demand for high levels of military outlays.
American politics once nourished a lively anti-interventionist tradition. Leading proponents included luminaries such as George Washington and John Quincy Adams. That tradition found its basis not in principled pacifism, a position that has never attracted widespread support in this country, but in pragmatic realism. What happened to that realist tradition? Simply put, World War II killed it -- or at least discredited it. In the intense and divisive debate that occurred in 1939-1941, the anti-interventionists lost, their cause thereafter tarred with the label “isolationism.”
The passage of time has transformed World War II from a massive tragedy into a morality tale, one that casts opponents of intervention as blackguards. Whether explicitly or implicitly, the debate over how the United States should respond to some ostensible threat -- Iraq in 2003, Iran today -- replays the debate finally ended by the events of December 7, 1941. To express skepticism about the necessity and prudence of using military power is to invite the charge of being an appeaser or an isolationist. Few politicians or individuals aspiring to power will risk the consequences of being tagged with that label.
In this sense, American politics remains stuck in the 1930s -- always discovering a new Hitler, always privileging Churchillian rhetoric -- even though the circumstances in which we live today bear scant resemblance to that earlier time. There was only one Hitler and he’s long dead. As for Churchill, his achievements and legacy are far more mixed than his battalions of defenders are willing to acknowledge. And if any one figure deserves particular credit for demolishing Hitler’s Reich and winning World War II, it’s Josef Stalin, a dictator as vile and murderous as Hitler himself.
Until Americans accept these facts, until they come to a more nuanced view of World War II that takes fully into account the political and moral implications of the U.S. alliance with the Soviet Union and the U.S. campaign of obliteration bombing directed against Germany and Japan, the mythic version of “the Good War” will continue to provide glib justifications for continuing to dodge that perennial question: How much is enough?
Like concentric security barriers arrayed around the Pentagon, these four factors -- institutional self-interest, strategic inertia, cultural dissonance, and misremembered history -- insulate the military budget from serious scrutiny. For advocates of a militarized approach to policy, they provide invaluable assets, to be defended at all costs.
Andrew J. Bacevich is professor of history and international relations at Boston University. His most recent book is Washington Rules: America’s Path to Permanent War. To listen to Timothy MacBain's latest TomCast audio interview in which Bacevich discusses the money that pours into the national security budget, click here or, to download it to your iPod, here.
Copyright 2011 Andrew Bacevich
by Stephen Leahy
UXBRIDGE, Canada - The world's northern freezer is on rapid defrost as large volumes of warm water are pouring into the Arctic Ocean, speeding the melt of sea ice, according to a new study.
"Boats were still in the water during the first week of January," said David Phillips, a senior climatologist with Environment Canada, referring to southern Baffin Island, some 2,000 km north of Montreal. This is a region that receives just four or five hours of weak sunlight during the long winter. Temperatures normally range from -25 to -35 degrees C but were above zero on some days in January.
"It's impossible for many people in parts of the eastern Arctic to safely get on the ice to hunt much-needed food for their families - for the second winter in a row," Phillips said in a report.
The warming and melting of the Arctic is happening much faster than expected and new data reveals that huge volumes of warmer water from the North Atlantic are now flowing into and warming up the Arctic Ocean, researchers reported Friday in the journal Science.
"In the past hundred years the waters in the Fram Strait have warmed about two degrees C," says co-author Thomas Marchitto, of Colorado University's Institute of Arctic and Alpine Research.
The Fram Strait between Greenland and Svalbard (Spitsbergen) is the major connection between the Arctic Ocean and the world ocean. An international team of researchers analysed marine sediments and found that temperatures of the northward inflowing Atlantic water varied by just a few tenths of a degree Celsius during the past 2,000 years. However, in the last hundred years temperatures have shot up by two degrees C.
"What's happening here is very unusual compared to the last 2,000 years," Marchitto told IPS.
Climate change is believed to be behind this warmer water because over 90 percent of additional heat trapped in the atmosphere from the burning of fossil fuels like coal, oil and natural gas is going into the oceans, he said.
"The accelerated decrease of the Arctic sea ice cover and the warming of ocean and atmosphere in the Arctic, as measured during the past decades, are in part related to an increased heat transfer from the Atlantic," said co-author Robert Spielhagen, a palaeoceanographer at the Academy of Sciences, Humanities and Literature in Mainz, Germany.
Sea ice has declined dramatically during the short Arctic summers in recent years, with some experts now projecting that the ice cover will be essentially gone in as little as five years. Just a few years ago, no one thought a summer ice-free Arctic could happen before 2060.
The warming Arctic and melting sea ice is a planetary-scale change since the Arctic Ocean covers 14 million sq km, an area almost as big as Russia. The Arctic and Antarctic polar regions are key drivers of Earth's weather and climate. The rapid defrosting of the Arctic has already altered the climate system, researchers now agree.
IPS previously broke the story revealing that the snow and cold in the eastern United States and Europe during the winter of 2009-10 was likely the result of the loss of Arctic sea ice. The same thing has happened this year.
As more and more sea ice melts, there is more open water to absorb the summer sun's heat. A day of 24-hour summer sun in the Arctic puts more heat on the surface of the ocean than a day in the tropics, James Overland of the NOAA/Pacific Marine Environmental Laboratory in the United States told IPS.
That extra heat in the ocean is gradually released into the lower atmosphere from October to January as the region slowly re-freezes months later than normal. This is a fundamental change - a large part of the Arctic Ocean is radiating heat instead of being cold and ice-covered. That has disrupted wind circulation patterns in the northern hemisphere, reported Overland and other researchers at the International Polar Year Oslo Science Conference in Norway last June.
The result: the Arctic stays warm and mid-latitude regions become colder and receive more snow for much of the winter. Last December was the coldest south Florida has experienced in more than a century of record-keeping.
Most of Britain suffered through its coldest December ever. Up in the Arctic, Coral Harbour on the northwest corner of Hudson Bay was above zero degrees C for two days in early January for the first time in history. Much of the eastern Arctic centred around Baffin Island averaged +21C above normal between Dec. 17 and Jan. 15 this year.
This looks to be the new normal since Arctic experts agree the melting sea ice is now locked into a death spiral.
"In future, cold and snowy winters will be the rule rather than the exception" in the eastern United States and Europe, Overland previously told IPS.
This week the U.S. northeast suffered through its sixth major snowstorm this winter, breaking all snowfall records.Copyright © 2011 IPS-Inter Press Service
by Michelle Chen
Has anyone noticed that new unemployment claims just climbed by 51,000 to 454,000? Maybe we're tired of being reminded about the jobless rate. It was politely ignored in President Obama's State of the Union Address, even as he promised to boost opportunities for the next generation.
Yet the next generation is at the center of unemployment epidemic. And according to the International Labour Organisation's Global Employment Trends report, they have lots of company around the world:
The number of unemployed stood at 205 million in 2010, essentially unchanged from the year earlier... with little hope for this figure to revert to pre-crisis levels in the near term.
The ranks of the jobless include some 78 million young people worldwide, a rate of 12.6 percent. That's a slight decline from the previous year but millions more than the 2007 levels. And since the data suggests "discouragement among youth has risen sharply," there is also the untold shadow number of youth who've simply fallen out of the workforce.
In some respects, the unemployment crisis has ironically done more relative damage to wealthier countries than to poorer ones; workers in upper-tier economies fell down harder. But whether unemployment reflects an abrupt decline from privilege, or a steady socioeconomic malaise, the millions of youth who can't find work are all hurting together. And the pain is now starting to crest in a ripple of anger.
This disaffection has afflicted rich and poor countries. American youth, even the college-educated, are increasingly frustrated to find the doors that opened for their parents a generation ago now shut firmly in their faces. In July 2010, unemployment in the youth labor force, aged 16 to 24, reached a jarring 19 percent, with especially high rates among blacks and Latinos. The combination of deferred dreams and lowered expectations has bred a sense of terminal stagnation among young workers. (Meanwhile, at the other end of the age spectrum, many older workers are clinging to their jobs for survival when they should be looking toward retirement).
The same story is unfolding with more vehemence in the Global South. It's no coincidence that the outbreak of youthful unrest in Tunisia, Egypt and Yemen, has emerged in regions embroiled in deep economic crisis.
The ILO reports that in the Middle East:
current estimates for 2010 show a level of unemployment at 10.3 per cent, which is the highest regional rate in the world. The youth unemployment rate is almost four times the adult rate. Gender inequalities continue to be a major concern, as the gap between male and female employment-to-population ratios, at 47.2 percentage points, is twice the global average. Economic growth in 2011 is projected at 5.1 per cent, falling short of precrisis trends, with little change expected in the region's unemployment rate.
Although North Africa didn't suffer as much as other regions in the recession, the data depicts a deep long-term slump:
An alarming 23.6 per cent of economically active young people were unemployed in 2010. Productivity growth continues to be sluggish and leaves little scope for increases in wages and salaries or for progress in expanding social protection systems.
The Brookings Institution last year described a so-called youth "unemployment paradox," in which declining unemployment "is paradoxically associated with a deterioration of job quality rather than any major improvement in labor market conditions." It drew a striking comparison between the widespread youth joblessness Egypt and the United States:
The United States arrives at this juncture as a result of the worst economic recession in 70 years. Underemployment in Egypt, on the other hand, stems from a rapidly growing youth population faced with the consequences of a partial and fragmented transformation of the economy from a state-led to a market-oriented development model....
In all likelihood, the U.S. economy will resume its growth and will eventually start creating new jobs, but the high cost of health care and continued economic uncertainty may significantly slow the creation of good jobs. Like young Egyptians, young Americans may have to reduce their expectations about the quality of jobs they expect to attain in this current market and hope to upgrade over time.
What the report didn't predict, however, was a more radical reaction. The explosion of protest in Cairo shows that young people can only be forced to reduce their expectations so much, before they start pushing back and demanding revolution.
The popular uprisings obviously aren't just a response to unemployment; they're a revolt against corrupt authoritarian government, uneven development, and social disenfranchisement. And, countering Western stereotypes of "religious fundamentalism," what we've witnessed in several Arab countries reflects a secular, democratically structured youth movement driven primarily by a desire for meaningful work and economic citizenship.
As one observer reflected in a Guardian dispatch, many protesters have:
made it clear that political opposition parties, long defunct and impotent, have been replaced by grassroots social action. Their fears of detention and torture have been supplanted by the need for better living conditions and better wages.
Will restless young people elsewhere follow? What about the American youth who face crumbling prospects for earning a living wage, much less finding their dream job? Or the young Europeans trapped between failed macroeconomic policies and a collapsed welfare state?
Echoing Brookings's warnings about long-term decline in job quality, ILO Director-General Juan Somavia argued, "We must not forget that for people the quality of work defines the quality of a society,"
The U.S. isn't yet on the cusp of a social breakdown, but its youth are moving into an era of unprecedented frustration. How long before they tire of letting their hopes suffocate-and join their peers around the world to organize and shake up the status quo?© 2011 In These Times
I was shocked to listen to the Ed show on msnbc and hear a pundit's analysis of what was going on in Egypt. It seems the protests were all about jobs or the lack thereof. 40% of the population lives below the poverty line. In the US 40 million are below the poverty line. Political analysts maintain that the Obama administration is all about jobs, jobs jobs. In Egypt there is a great disparity between the rich and the poor. Ditto for the US. The pundit said that Egypt's economy will probably grow about 5% this year. Hmmm. Respectable economic growth without a corresponding increase in jobs. Sound familiar? The US will probably not even attain Egypt's GDP growth. In both cases economic growth does not translate into job creation or a diminution of the disparity between the rich and everybody else.
As I drifted in and out of sleep, I couldn't tell whether they were talking about Egypt or the US. American spokepeople were like taking this superior tone with repect to Egyptian dilemmas while I wanted to pinch them and say, "Pssst. You know it's the same situation in the US. You know it's all about unemployment even though "the economy" is doing well. The President told us so in his SOTU speech. The stock market's up." I guess "the economy" can do well without most of the people doing well if most of the rewards go to a small elite upper class. So the same thing is happening in Egypt as is happening in the US only on a larger scale. When the US hits 40% unemployment I would think that there would be rioting in the streets here as well. But all this self-righteous blather from pundits and politicians like we really have our act together and pity those poor Arabs that don't have any jobs. The fact of the matter is the same problems plague the US as plague Egypt. We just haven't gotten quite to their level of desperation. But this is nothing to be smug about because we're getting there.
Unemployment is a problem on a global level. There just aren't enough jobs to go around. In the old days people used to be backward but self-sufficient, as UCLA professor Anton Weber points out in his series, "The Western Tradition." They grew their own food, built their own houses, supplied their own energy in the form of human and animal labor. Today as the world has urbanized, more and more people are dependent on the market economy in order to survive. They are dependent on a job for the cash required to participate in the cash economy. This process of urbanization has been going on for some time now. As the world's population continues to increase at a fast pace, the new addition of human labor to the world is just not needed. Computers, automated machines and robots have diminished the need for human labor just as the work force on a global level has skyrocketed. Coincidentally, just before the Egyptian situation erupted, Arianna Huffington, attending the Economic Forum in Davos, Switzerland wrote the following:
My day started with taking part in a CNBC debate entitled "The West Isn't Working," focused on global employment. The debate was divided into two parts. The first part was on the motion, "For a dynamic workforce, go East!" and centered on the rise of China and India and the decline of the West as an engine for growth and employment opportunities. Kiran Mazumdar-Shaw, the chairman of Biocon, argued in favor of the motion while Barry Silbert, the CEO of SecondMarket, argued against. Laura Tyson, a member of Obama's Economic Recovery Advisory Board, Philip Jennings, the general secretary of the UNI Global Union, and I challenged both sides with our own comments and questions.
It was a lively debate, but for me the most memorable part of it was a powerful short video (posted below) highlighting the global unemployment crisis that was shown at the start of the program. Before the audience was let into the auditorium, the CNBC crew was doing a technical run-through with Maria Bartiromo, who was moderating the debate. So I got to watch the video five or six times in a row. And each time its potent mix of doomsday music, depressing statistics, and images of global unemployment (especially among the young) and political unrest really hit me. So when the debate started, I told the audience: "This video should be played at the White House and in every Congressional office every single morning until unemployment drops to pre-recession levels." Watching it leaves you feeling like you can't just sit there -- you have to do something before it's too late. It reminded me of the time Bobby Kennedy, as Attorney General, brought his brother's Cabinet to his office at the Justice Department and locked the door, forcing them to stay there for four hours discussing how to best address the crisis of poverty in America. I was ready to lock the doors of the Congress Centre auditorium until we had determined to do something concrete about unemployment.
Here's the video:
One of the biggest non sequiturs about this whole situation is the fact that the US gives $1.5 billion a year to Egypt. What! We borrow $1.5 from the Chinese, add it to our deficit and then give it to Egypt. And Egypt isn't the only recipient of billions borrowed from the Chinese and added to US debt. The US gives Israel $3 billion a year which is added to the deficit and borrowed from the Chinese. And yet Republicans are trying to foment a war against social security, Medicaid and Medicare. We have to cut the legs out from under American citizens while we blow billions on other countries which amounts are probably going to make their corrupt elites richer while not "trickling down" to ordinary citizens.
And did you notice that the Egyptians are not clamoring for democracy and freedom; they're clamoring for jobs. I'm sure the American power structure wishes that the protests were all about democracy and freedom and becoming more like us. But they aren't. They're about jobs, jobs, jobs, the same mantra that is being chanted here in the US but on a less disruptive level.
It looks like our boy Mubarak will have to go and the Egyptian youth may not accept a substitute. They might want a radically new government - one that can provide them with jobs, jobs, jobs. It's not likely to look like American capitalism which has brought the world disparity, disparity, disparity - fantastic wealth for a few and misery for the masses. The Muslim brotherhood is waiting in the wings. It preaches that Islam enjoins man to strive for social justice, the eradication of poverty and corruption, and political freedom to the extent allowed by the laws of Islam. The Brotherhood strongly opposes Western colonialism, and helped overthrow the pro-western monarchies in Egypt and other Muslim nations during the early 20th century. As Sayyid Qutb, an Islamic intellectual and supporter of the Brotherhood wrote in his 1963 book, Milestones, (Ma'alim fi al-Tariq), "The leadership of mankind by Western man is now on the decline, not because Western culture has become poor materially or because its economic and military power has become weak. The period of the Western system has come to an end primarily because it is deprived of those life-giving values, which enabled it to be the leader of mankind. It is necessary for the new leadership to preserve and develop the material fruits of the creative genius of Europe, and also to provide mankind with such high ideals and values as have so far remained undiscovered by mankind, and which will also acquaint humanity with a way of life which is harmonious with human nature, which is positive and constructive, and which is practicable. Islam is the only System which possesses these values and this way of life."
Obviously, the Muslim Brotherhood represents a threat to Western democracy and capitalism because the values upon which it is based are a direct contradiction to Western values. They are largely communitarian rather than individualistic values. Having been outlawed in Egypt, the Muslim Brotherhood may now make a resurgence, and, since this is a pan-Arabic movement, there may be upheaval throughout the Arab world. The problem there which is similar to the problem in the US is that democracy and capitalism have not produced sufficient jobs to keep huge numbers of people out of poverty while the upper 1% live with immense wealth.
According to documents filed with the City of San Diego this week, the secretive group behind the campaign for appointed school board officials is 99.75% funded by just two individuals: Chicago financier Ron Dammeyer ($300,000 via CAC Advisory Services LLC) and billionaire Irwin Jacobs ($150,000).
The story broke late Wednesday, Jan. 26th in the Voice of San Diego, which went on to report:
Last year, the group spent or owed more than $50,000 of that money for radio advertisements, more than $130,000 to pay petitioners and more than $115,000 in consulting costs, according to documents filed with the city yesterday that cover the last few months of the calendar year.
San Diegans 4 Great Schools is campaigning to expand the school board, now composed of five elected members, to include four more appointed members. The campaign would also set term limits and elect school board members exclusively from geographical subdistricts instead of making them campaign in the school district at large.
Its backers say the changes would stabilize and depoliticize the school board, stopping the political turmoil and the revolving door of superintendents in past years. Opponents, including existing board members and the teachers union, call the plan elitist and undemocratic and say it won’t help schools.
Last week the Union-Tribune’s Watchdog poked holes in claims that the group is making in radio advertisements urging people to sign the petitions currently being circulated by paid signature gatherers at local shopping destinations:
The case for reshaping the San Diego school board is laid out dramatically in radio advertisements and a petition drive designed to get a reform proposal on the ballot.
A review by The Watchdog found that San Diegans 4 Great Schools has made some inaccurate claims in its campaign to overhaul the board of education, especially when it comes to funding.
Earlier stories in both the Union-Tribune and the Voice of San Diego shed light on false claims being made by the petition bearers regarding the impact of the initiative. Disruptive behavior by those signature collectors has also prompted the Vons grocery story chain to post signage disavowing any implicit support of the group. Walmart, on the other hand, which has a tough policy prohibiting solicitation outside its stores, has allowed the Great Schools signature gatherers access to its shoppers, probably because they were usually also collecting names for a company sponsored initiative to overturn a City Council ordinance that would have required an economic impact study from “big box” retailers seeking to locate in San Diego.
According to multiple press reports, the Walmart initiative has garnered enough signatures to trigger a special election, which will cost the cash strapped City government more than $3 million. The Great Schools initiative petition hasn’t reached that threshold yet—paid signature gatherers were reportedly complaining about voter resistance–, although it’s considered likely in the wake of the radio ad campaign that they will eventually get there.
In response to the success of the Walmart petition drive, most insiders are predicting that the newly elected City Council will vote to repeal the ordinance rather than spend the monies to hold a special election. The “education reform” initiative backers are clearly hoping to piggy-back their measure with a special election that Gov. Brown is proposing for May or June. However, given the time constraints imposed by the law, which requires initiative petitions to be verified, this measure may have to be voted on in a separate election to held within 11 months of the signatures being turned in. In that case, San Diego’s City government may still find itself forced to pay for a special election while cutting public safety services and closing libraries.
Meanwhile, local rumor mills have been working overtime, as a still as-yet-unannounced and unnamed group—reported to be a bi-partisan coalition focused on the implications of having appointed school board members with no voter recourse—has been making the rounds seeking to gather support from elected officials. State Superintendent of Education Tom Torlakson has reportedly taken an interest in the matter and has had discussions with local administrators about the implications of the Great School ballot measure.
Wednesday 26 January 2011
Exciting news, folks. Obama and team say they're recalibrating, recasting, retooling and rebranding his presidency! And they've come up with a dandy new slogan to sum it all up and get America moving again. Ready? "Win the future."
Takes your breath away, doesn't it?
If you're old enough to remember Gerald Ford's hapless presidency, Obama's fabulous new slogan might have a familiar ring to it. In 1974, with rampant inflation gobbling up the paychecks of workaday families, Ford blamed the American people, asserting that they were simply spending too much. So he ordered thousands of red-and-white buttons that said "WIN!" It was an acronym for "Whip Inflation Now," which Ford thought would happen if only the public wore the buttons to remind each other to buy less.
This was, in a word, stupid -- and it helped make Gerry a one-term president.
Obama, however, hopes his slogan will catch on. As explained in his Jan. 25 State of the Union speech, it refers to what he sees as a sort of global Super Bowl in which the U.S.A. is competing to "out-innovate, out-educate and out-build the rest of the world." He has declared that this is "our generation's Sputnik moment," adding that, "My No. 1 focus is going to be making sure we are competitive."
Hooray, let's go! Washington should harness the idealism, creativity, energy and can-do spirit of grassroots people into a bold national program to revitalize America's economy, educational system, infrastructure and middle class.
But, wait -- it turns out that Obama's not proposing a true Sputnik response, like Dwight Eisenhower, John Kennedy and Lyndon Johnson produced in the 1950s and '60s. They launched such public efforts as a national program of science education and the Apollo moon landing. Instead, Obama is trusting Corporate America to "win the future" for us, offering deregulation and more tax breaks to entice them.
Corporate America? Hello, "America's" corporations are abandoning our workers, communities, egalitarian values and America itself as fast as they can. Trusting them to serve any interest but their own is a fool's errand.
As an old adage puts it, you can dance with the devil, but never fool yourself into thinking that you're in the lead.
That would be my 50-cents' worth of advice to President Obama as he rushes to transform his presidency into a Clintonesque corporate enterprise. Apparently discombobulated by Republican gains last fall, he has quickly converted into an irrepressible corporate-hugger, suddenly blowing kisses to CEOs and big-business lobbyists.
He's now filling his White House dance card with them. First up was Bill Daley, the Wall Street banker and longtime corporate lobbyists. Obama brought him to the White House ball, where he's been shaking his corporate bootie as the president's chief of staff, gatekeeper and policy coordinator.
Then, in a bizarre choice, Obama tapped Jeffery Immelt on Jan. 21 to lead his newly created Council on Jobs, which is supposed to "encourage the private sector to hire (Americans) and invest in American competitiveness."
What's bizarre about choosing him is that Immelt is CEO of General Electric and has been a leader in shipping American factories and thousands of GE jobs to Asia and elsewhere. Today, fewer than half of GE's workers are in our country. As an AFL-CIO official notes: "Highly globalized companies don't have the same interests as the United States. There is no company more emblematic of this than GE."
Rather than criticizing these runaway outfits in his State of the Union speech, Obama hailed the rise in their corporate profits and stock prices, citing these as signs that our economy is strong again.
As for the millions of unemployed and barely employed Americans, he expressed regret that it's now so hard "for Americans to find a good secure job." But he offered only cold comfort, noting that "the rules have changed." Well, yes -- and who changed them? Self-serving CEOs like Jeffrey Immelt, that's who.
America's working families -- our endangered middle class -- have a right to expect Obama to fight for rules that are fair to them and our country, not meekly accept rules that have been skewed by an elite corporate class to profit them alone. Instead, our president is waltzing with the devil.
He's rebranding his presidency, all right. It's becoming Obama Inc.
National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.
Copyright 2010 Creators.com
by Rahul Mahajan
I listened to the State of the Union speech. What I heard, though, was not President Obama's string of irritating platitudes, but the sound of a nation bent on self-destruction.
I don't say this lightly. Intellectuals have been talking about the fall of the new Rome for decades, and mostly it has been hyperbolic nonsense. This time feels different. It even makes the darkest days of the Bush-Cheney administration seem like some distant, bygone utopia.
The reason for this change is the emergence of two extremely powerful groups that have not the slightest interest in any notion of the public good and are willing to put all of it in jeopardy to satisfy the shortest of short-term interests.
I'm not talking about the forlorn neoconservatives and their paleoconservative allies. They wrecked Iraq, which may never recover. They ripped the velvet glove off America's iron fist. They made American foreign policy a byword for destructive incompetence. They were arrogant and senseless. They instituted what looks to be a permanent national security state.
But they couldn't quite touch, and mostly didn't try to, most of what was good, or at least adequate, about living in America.
That job falls to two of the most sinister forces in the country: finance companies and the Republican Party, also known as the Tea Party.
Now, as Obama might say, let me be clear. I am not saying that these two groups don't have the good of working Americans at heart, that they are in it for themselves, or anything that banal. I am saying that their deliberately unenlightened self-interest, fixated on immediate aggrandizement, puts at risk the good of even the most privileged Americans, and that they are quite happy to hang it all on a throw of the dice in which there are no winning rolls, just losing ones. They are as happily jeopardizing their own long-term interests too.
Before the financial crisis, finance companies made 40% of all corporate profit in the United States (see Freefall, by Joseph Stiglitz), up from typical postwar levels under 20%. The reason is that, except for information technology and entertainment, the one remaining bastion of good old American corporate knowhow is figuring out how to fleece suckers--the raison d'etre of the modern American financial service company (see Griftopia by Matt Taibbi).
Their toxic combination of arrogance, ignorance and short-sighted avarice built a vast imaginary economic empire and when at last it collapsed under the weight of enormous stupidity, the collapse caused very real consequences. And yet they are still not grateful to Obama and his administration for working so hard to save themselves collectively from the consequences of their own actions. The administration’s ceaseless labors to repair the damage to credit markets, stock markets, and financial profits (to be contrasted with their half-hearted efforts to address the problems of unemployment, dislocation, and alienation the rest of us have been faced with) have been met with anger, hatred, and constant declarations of victimization by those very lords of the financial earth
When Stephen Schwarzberg, the founder of Blackstone, compared Obama’s idea to make a minor change in taxation procedures for hedge funds (applying income tax rather than capital gains tax to managers’ compensation) to Hitler’s invasion of Poland, one might have written it off as the reaction of a rabid McCain supporter (one of the few on Wall Street during the presidential campaign), but in fact the phenomenon is far more widespread. Daniel Loeb, another hedge-fund founder, probably came closer to a consensus viewpoint among financiers when he warned that the administration seemed focused on “redistribution rather than growth” and that believers in the free market should be frightened. It is funny enough that we live in a country where redistribution is considered an evil in principle; it is beyond farce to characterize Obama as a redistributor.
In fact, in order to avoid both redistribution and economic collapse, Obama put the country even more dramatically into hock with the stimulus--a package of almost $800 billion in spending and tax cuts designed to avoid confronting redistribution. This debt is not one the financiers will have to pay.
All across the country, states and localities are confronting the same problem. Like the federal government, they won't do anything redistributive. In the absence of that, in particular in the absence of the necessary taxes on the people who can afford it to pay for the things society needs, what's left is a zero-sum game pitting the good of society against the budget. Where the federal government wrecked the budget so as not to wreck society, local governments are wrecking society so as not to wreck the budget.
Detroit is considering closing half of its public schools, sending the student-teacher ratio in high schools to 62. And it is not as if Detroit's schools are the envy of the world, so superlative that they can afford to cut back--quite the reverse.
Camden, NJ closed its pubic library system and laid off nearly half of its police and firefighters. And it's not as if crime in Camden is so low it can afford to let policemen go.
Arizona's governor has just asked for federal permission to drop 280,000 of the poor from its Medicaid rolls. And most disturbingly in a country awash in guns where an entire political party and most of the broadcast media are dominated by a group of hired liars, and the occasional maniac, who spout nonsense intended to induce paranoia, Arizona (of all places!) has already slashed mental health spending and is planning to cut another $17.4 million.
by Scott Harris
Like thousands of his fans around the country, I was shocked to hear the news that Keith Olbermann would no longer be hosting his weeknight "Countdown" show on MSNBC.
Olbermann's terse announcement, made at the end of his Friday, Jan. 21st show, came the same week that the Federal Communications Commission and the Justice Department approved the merger of cable giant Comcast and NBC, MSNBC's parent company. There was immediate speculation that Comcast's incoming management at MSNBC was a key factor in the decision to cancel Olbermann's show. We'll likely have to wait a little while to hear an honest account of the events which led to the program's end.
Because Olbermann was afforded time to say goodbye to his audience -- and did so with a stiff upper lip and little apparent anger -- many media insiders were guessing the decision to cut short his four-year contract with MSNBC by two years, was a decision in which Olbermann was a participant.
Regardless of the reasons, I, along with many progressives across the U.S., will miss Countdown and Olbermann's intelligent and passionate delivery of commentary mixed with a good dose of humor and smart-alecky personal asides. As a good friend told me at dinner the night after Countdown's cancellation, knowing Olbermann would be on the air to help us try to make sense of America's ever more insane political psycho-drama, was "very comforting."
For me and many others, Olbermann's finest hours came during the darkest days of the eight-year rein of the Bush-Cheney regime. And he established his integrity and principled nonpartisan belief system as he persistently harassed President Obama each time he broke his campaign promises to adopt odious Bush era policies. The nation's very bleak media landscape will indeed become a bit more bleaker without Olbermann on the air.
While I appreciated Olbermann's sincere and sometimes cynical view of the "inside the beltway" politics he covered, I was most impressed with his daily effort to act as a truth detector holding Washington politicians accountable for their bald faced lies and blatant hypocrisy -- be they Democrats or Republicans, liberals or conservatives.
The sobering thing about this element of Olbermann's show is that once upon a time in America, real journalists at real TV networks and real newspapers used to perform this same function as part of their normal, daily job description. In today's U.S. media system, it's been left to a unique cable TV talk show host like Olbermann or The Daily Show's Jon Stewart to speak truth to power -- and assist a population barraged by ceaseless and cleverly packaged propaganda to sort out truth from lies.
Olbermann's "harsh" style seemed to stick in the craw of Howard Kurtz, former Washington Post media columnist and host of CNN's "Reliable Sources," who now writes for the Daily Beast. Appearing on CNN's Anderson Cooper show the same night of Countdown's cancellation, Kurtz criticized Olbermann's "over the top" commentary the day of the Tucson massacre in which he attacked Glenn Beck, Rush Limbaugh and other hate talk jockeys for their reckless use of gun metaphors and violent images to attack political opponents. Kurtz, like many other mainstream media critics, consistently declare that America's right and left punditocracy are equally irresponsible in their overheated political rhetoric - a practice that Olbermann regularly condemned, branding it as dishonest "false equivalence."
I know I'm not alone in hoping that Keith's hard-working progressive colleagues at MSNBC, Rachel Maddow and Ed Shultz, will be permitted to continue their good work under the shadow of the network's new Comcast owners. But hope alone, nor faith in giant corporations will ensure that a few honest progressive journalists and commentators will be allowed to slip in among the vast majority of corporate media's tepid "reporters," who behave like scribes to the rich and powerful, or frothing-at-the-mouth right-wing talk show hate-mongers.
Olbermann's departure from millions of television sets in this country should serve as another in a series of wake-up calls to progressives who have long understood the power of media to hypnotize a nation to war, re-elect war criminals as heads of state, or accept trickle-down economics and tax breaks for the rich as "good" for the average working stiff.
While there are justifiable complaints about today's "talking head" model of cable TV news, and we would all do well to demand that major newspapers and TV stations bring back hard-hitting investigative reporting like that of Seymour Hersh and Edward R. Murrow, it's shocking to realize that the apparently very fragile evening lineup on MSNBC is the nation's only major cable TV network that daily provides viewers with progressive points of view in prime time. There's simply no other game in town when it comes to corporate media.
As has been true for many years now, it's up to the progressive community -- and the independent journalists and media makers who keep them reliably informed -- to come together to strengthen individual alternative journalistic enterprises. But more importantly, we need to collectively brainstorm ways to create new venues for progressive ideas -- and raise the funds necessary -- to reach the millions of Americans who frighteningly rely on Rush Limbaugh, Bill O'Reilly and Glenn Beck for their world view.
I sincerely hope that wherever Keith Olbermann ends up -- as a broadcaster or full-time activist -- he can lend his considerable talent, energy and popularity to aid us in this important effort to re-energize the nation's media system and strengthen democracy.
Good night and good luck, Keith!
by Jack Rasmus
Not a word about the 25 million still jobless. Nothing about how to help the more than 7 million homeowners who have, or the additional 4 million who will soon, face foreclosures and evictions. Absolute silence about the dozens of states and hundreds of local governments in deepening fiscal crisis and approaching bankruptcy-and the hundreds of thousands of public employees who will pay for that bankruptcy with their jobs, wages, pensions, and health benefits. OK, some vague references to infrastructure and alternative energy jobs-over the next 25 years. Paid for by Obam's explicit reference to cut Medicare and Medicaid benefits for tens of millions.
But the most disturbing element of Obama's State of the Union address last Tuesday night was his firm commitment to cut corporate taxes even further, and thereafter to move on to ‘simplify' the US tax code in general-i.e. a code word in policy circles for further reducing top tax brackets which always results in tax cuts for the wealthiest households.
What Obama proposed in his address on Tuesday was a classic continuation of a supply side, ideological program focusing on business tax reduction, supplemented by various other measures to reduce business costs at the expense of consumers, workers, and others.
But the problem today is not excessively high business costs. It's not a supply side problem. Business has been cutting costs to the bone the past three years with massive layoffs, wage reductions, employee benefit cuts, hiring part time and temp workers, and implementing various productivity boosting measures. Obama and Congress have further lavished tax cuts and subsidies on business at historic levels the past two years. The Federal Reserve in turn has reduced business costs still further by reducing interest rates to record low levels. The result of all this business cost reduction has been a rapid return to pre-crisis levels of business profits and an accumulated corporate cash hoard of more than $2 trillion. And none of this $2 trillion has been spent by business thus far to create jobs to any reasonable extent.
In his address Obama praised the fact that business created 1 million jobs in 2010. But the majority of the 1 million were temp and part time jobs. And at that 1 million a year rate of job creation it will take 15 years just to recover the jobs lost in the recent recession. Yet Obama maintains Business needs further cost reduction assistance, and still more business tax cuts to ‘make them more competitive'.
The problem in the US economy, now experiencing the most lopsided (and weakest) economic ‘recovery' from any recession since 1947, is not too high business costs or insufficient supply side (business tax) stimulus. The problem is demand side-i.e. not enough income for the 90 million middle and working class households. That insufficient income means first and foremost not enough jobs. And Obama last Tuesday night said nothing of substance about how to create jobs today or even in the next one to two years. Job creation was relegated to the distant future, stretched out over the next 25 years.
The US economy and households do not need a 25 year job creation plan. They need an immediate job creation program. And they need a definitive solution to prevent 10 million foreclosures. And the better get quickly a rescue of the states and cities, before the local government crisis sinks the municipal bond markets and subsequently precipitates another ‘subprime'-like financial implosion. Yet no mention of any of this in the State of the Union address, as if these weren't the most serious issues confronting the US economy today.
In his Tuesday address Obama clearly followed in the footsteps of George W. Bush. Bush first passed more than $3 trillion in tax cuts for wealthy households between 2001-2003 by cutting capital gains, dividends, and estate taxes. (Obama last December extended the same for two more years). Bush then followed up in 2004 with several industry-by-industry specific corporate tax cuts worth another $1 trillion. (Obama now follows up with proposals to cut the corporate tax rate). Bush in 2005 then proposed to revise the general tax code in his second term to make it all permanent. Obama and the Republican Congress will pass the additional corporate tax cuts this year, then move on to the general tax code revision in 2012 that will ‘simplify' (lower) taxes on the wealthiest households before the next general elections.
On Tuesday Obama thus echoed the tired corporate refrain that ‘tax cuts create jobs'. His new twist is that the tax cuts are necessary to ‘make US corporations more globally competitive' vis-à-vis their foreign rivals. In other words, the primary focus of the tax cuts is to benefit US multinational corporations. As the argument goes, if they are ‘more competitive' (i.e. if their costs are less), they will be able to get a larger share of global exports and sales, which will mean more investment and jobs in the U.S.
But for more than a decade now multinational corporations as a group have been steadily reducing jobs in the U.S., and will continue to do so. Obama's corporate tax cuts will result in fewer-not more-jobs in the U.S., as corporations use the additional income to continue to invest in new equipment that will result in job displacement rather than new job creation.
More tax cuts for multinationals could also prove to have only a temporary effect at best at boosting exports and profits, and thus investment and jobs. The present period is one in which all the major global economic sectors-the U.S., the Eurozone, China, Japan, the Asian periphery, and BRICs like India and Brazil, are all intensifying their fight over the remaining global export pie.
Their respective, domestic economies have all been experiencing difficulty generating sustained internal economic recovery-except for China which has recently begun to slow its economy on purpose to deal with rising global speculation and internal inflation.
Japan has entered a double-dip recession. Asian periphery economies are rapidly slowing and some predicted to enter recession again. Like China, India and Brazil are slowing their economies intentionally as well, Growth in the Eurozone will slow, driven by its periphery nations' financial instability. Global competition over exports is growing more intense. More currency fights are erupting. More protectionism is likely. And all over a global export pie that will to grow more slowly in 2011 and perhaps more so in 2012.
The newly emerging Obama-Big Business focus on relying on exports and multinational corporations to lift the US recovery to a sustained path is therefore a highly risky policy shift. It will not only fail to create jobs; it will likely fail as well to provide the main source for a sustained economic recovery that has eluded Obama to date. For all who are not bankers, investors, or corporate managers and big stockholders or bond traders-we can expect more of the same for the next two years in a continuing lop-sided economic recovery.
by Robert Reich
The President’s new emphasis on the importance of investing in education, infrastructure, and basic research in order to build the nation’s long-term competitive capacities is appropriate. For the last three decades the federal government’s spending on these three essentials has declined as a percentage of its total spending, arguably threatening America’s technological and economic leadership.
But the President’s failure to address the decoupling of American corporate profits from American jobs, and explain specifically what he’ll do to get jobs back, not only risks making his grand plans for reviving the nation’s “competitiveness” seem somewhat beside the point but also cedes to Republicans the dominant narrative.
The address he gave last night could have been given (indeed, was given) by Democrats in the 1980s when Japan seemed to threaten America’s preeminence. Bill Clinton’s 1992 campaign manifesto, “Putting People First,” laid out the case. Only now the competitive threat comes from China.
A similar call for economic patriotism and public investment emerged in the 1950s and 1960s, when the competitive threat was the Soviet Union. John F. Kennedy challenged America to get to the moon ahead of the Soviets. Before him, Republican president Dwight Eisenhower committed the nation to building the interstate highways system – forty-one thousand miles of four-lane (sometimes even six-lane) freeways to replace the old two-lane federal roads that meandered through cities and towns – in order to speed troops, tanks, and munitions across the nation in the event of war. And a National Defense Education Act to educate a generation of mathematicians and scientists to catch up with the Soviets in space.
President Obama made the parallel explicit:
Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we’d beat them to the moon. But after investing in better research and education, we didn’t just surpass the Soviets’ we unleashed a wave of innovation that created new industries and millions of new jobs. This is our generation’s Sputnik moment.
Reviving these ideas, and the feelings they provoke, is politically astute. A call for national unity and economic patriotism places the President above partisan rancor, and gives him a rationale for a strong and effective government at a time when Republicans want nothing so much as to shrink it.
But the new theme also poses a danger of appearing to ignore the elephant in the room – the nation’s continuing scourge of high unemployment that shows little sign of abating any time soon.
It’s one thing to challenge the nation to re-embark on the equivalent of a race to the moon when most people feel confident about their own family finances, but quite another when economic security is as endemic as now.
The President understandably wants Americans to feel upbeat about the economic recovery – “two years after the worst recession most of us have ever known, the stock market has come roaring back Corporate profits are up. The economy is growing again,” he said – but little of this has yet trickled down to ordinary people who continue to be plagued by a huge debt load, business’s unwillingness to create full-time jobs, and a still fragile housing market.
The Great Recession wasn’t due to America’s loss of “competitiveness” relative to the Chinese or anyone else. In fact, American corporations are now enormously competitive, racking up some of their highest profits in history. But much of their success is occurring outside the United States. GE, whose CEO, Jeffrey Immelt, was just tapped to head Mr. Obama’s new advisory council on jobs and competitiveness, has more foreign employees than American. General Motors now sells and makes more cars in China than at home.
Republicans and their supply-side economists say the nation got into trouble because government became too large, and the answer is therefore to cut spending, cut taxes, and shrink the deficit. The President, having apparently given up on Keynesian pump-priming, has no retort except to invest for the long term.
What the President should have done is talk frankly about the central structural flaw in the U.S. economy – the dwindling share of its gains going to the vast middle class, and the almost unprecedented concentration of income and wealth at top – in sharp contrast to the Eisenhower and Kennedy years.
Although the economy is more than twice as large as it was thirty years ago, the median wage has barely budged. Most of the gains from growth have gone to the richest Americans, whose portion of total income soared from around 9 percent in the late 1970s to 23.5 percent in 2007. Americans kept spending anyway by using their homes as ATMs but the bursting of the housing bubble put an end to that – leaving them without enough purchasing power to reboot the economy. So the central challenge is put more money into the pockets average Americans.
This narrative would be politically risky (opening Mr. Obama to the charge of being a “class warrior”) but at least honest. And it would allow him to connect the dots – explaining why his new health-care law is critical to reducing medical costs for most working families, why tax reform requires cutting taxes on the middle class while raising them on the rich, why the Bush tax cuts shouldn’t be extended for the wealthy, why deficit reduction must not sacrifice education and infrastructure (both important to rebuilding middle-class prosperity) and why any cuts in Social Security or Medicare must be on the backs of the wealthy rather than average working families.
Importantly, it would give him a convincing counter-narrative to the Republican anti-government one. Government exists to protect and advance the interests of average working families. Without it, Americans have to rely mainly on big and increasingly global corporations, whose only interest is making money wherever it can be made.
Obama's SOTU speech was all about jobs, jobs, jobs. But what seems to be his preferred mode for creating them? Most of Obama's stimulus spending was in the form of tax cuts, and, in order to get the Bush tax cuts extended for the middle class, Obama had to go along with extending them for the wealthy as well. Anything that Obama proposes that doesn't involve tax cuts is vehemently opposed by Republicans in Congress. The result is that few jobs are created because tax cuts are ineffective at creating jobs. The second result is that the Federal government goes deeper into debt because tax cuts essentially defund the Federal government. Republicans know that these are the guaranteed results; they're no dummies. And these are exactly the results they want. The non-creation of jobs will guarantee that Obama will be a one term President. The further indebtedness of the Federal government will enable them to rant and rail against the continuation of social programs like social security, Medicare and Medicaid. Presto, these are exactly the results they want.
The only thing accomplished by tax cuts is that the rich will get richer and this is Republicans' primary goal. They are there to serve their constituents: the wealthy (of whom they are a part) and large corporations for whom they drill loopholes into the tax code. You might say that they really believe that tax cuts will create jobs. Nonsense. Their rhetoric would lead you to believe that, but their rhetoric is one thing. Their rhetoric is what they want the public to believe not what they believe. They are for all intents and purposes bald faced liars. Look at it this way. Most Congresspersons are lawyers. Lawyers to a great extent are bald faced liars. When a defense lawyer tries to persuade a jury that his client is innocent when he knows the client is guilty, he is bald faced lying in order to persuade a group of people that what he knows is a lie is actually the truth.
No one with the least knowledge of history can really believe that tax cuts, especially tax cuts for the wealthy, will really create jobs. All you have to do is look at the history of the George W Bush administration. Bush cut taxes. The result was the government went into huge debt. Two wars were unpaid for. The prescription drug benefit for Medicare recipients was unpaid for. The Federal government debt went from $5 trillion to $10 trillion. In addition those debt accumulations are ongoing since the wars and the drug benefit are ongoing. No jobs were created during the eight years of the Bush administration as in NONE, NADA, ZIP. No clearer proof is needed that the result of tax cuts is threefold:
1) the wealthy get wealthier
2) the Federal government gets more indebted and
3) no jobs are created.
But these are precisely the results Republicans want! Their protestations to the contrary, they don't really believe that tax cuts will create jobs. That's what they want you to believe.
But here is what would create jobs for the least amount of government expenditures. Direct job creation by instituting a jobs program similar to the Works Progress Administration that was put into place by FDR in the 1930s would create jobs and bring the unemployment rate down. But Republicans are totally against this. According to them, this would be socialism. But according to them social security and Medicare are socialism. Any government expenditure except on war is socialism. The result of their anti-socialism diatribes is that the government becomes more indebted and no jobs are created. They treat socialism as anathema even though our major NATO allies in Europe are socialist in many respects and socialist countries such as Norway are more entrepreneurial than the US. Other major players on the world stage have not been caught in this downward spiral of lost jobs and decreased government revenues leading to more lost jobs and more government indebtedness. They have maintained a strong position on their government's balance sheet by means of sovereign wealth funds and other creative means of revenue enhancement. But the American government seems to be too dumb and too stuck in their ideological straitjackets to even conceive of doing that.
Clinton balanced the budget and created 22 million new jobs. Here are some of the results of the Clinton administration:
1) 22.2 million new jobs were created since 1993 -- the most jobs ever created under a single administration, and more jobs than Presidents Reagan and Bush created during their three terms. Under President Clinton, the economy added an average of 245,000248,000 jobs per month, the highest of any President on record. This compares to 52,000 per month under President Bush and 167,000 per month under President Reagan.
2) Unemployment was down from 7.5 percent to 3.9 percent, the lowest in more than three decades. The unemployment rate fell for seven years in a row, and remained below 5 percent for 37 months in a row -- over three full years.
3) Median family income increased from $42,612 in 1993 to $48,950 in 1999 - an $6,338 increase. In contrast, median family income fell from $44,354 in 1988 to $42,490 in 1992.
4) Real wages rose 6.66.5 percent since 1993, compared to declining 4.3 percent during the Reagan and Bush years. Real wage growth in 1998 reached 2.6 percent -- the largest increase since 1972. Wages increased five years in a row -- the longest consecutive increase since the 1960s.
5) 15 million additional working families received additional tax relief through the President’s expansion of the Earned Income Tax Credit. In 1999, the EITC lifted 4.1 million out of poverty -- nearly double the number who were removed from poverty in 1993. Over half of the people removed from poverty by the EITC (2.3 million) were children under the age of 18.
It is time that the public stopped being fooled by Republicans. Their main goal is to serve their clients - the wealthy - and to fool enough of the public to get themselves elected. They do this by means of their talk radio and TV echo chamber and elected Republicans who mouth the talking points that we must eliminate social programs and cut taxes. When they control the government, they place incompetents in high positions to make sure that "government doesn't work."
Unfortunately, Obama seems either to have been taken in by Republican rhetoric or he has been forced to compromise with them in order to get anything done. They accuse him of being a socialist at every turn despite the fact that he has embraced their positions both rhetorically and in actual point of fact. The opposite rhetorical points have been left to a few lone voices crying out in the wilderness like Congressmen Dennis Kucinich, Bernie Sanders and Anthony Weiner. Unfortunately, a staunch supporter of rhetorical reality, Keith Olberman, is gone while the right wing echo chamber barrels on. It seems like the left wing is squelched. Who knows what will happen to the other lefties on msnbc, Rachel Maddow, Ed Schultz and others. They might go the way of Air America now that Comcast has taken over NBC Universal as corporate owner. Left wing talking points are not conceived to be in the interests of major corporations.
January 17, 2011, 11:59 pm, from New York TimesBy JACQUES STEINBERG
While The Choice tends to focus on the process of applying to college, we also consider it within our mission to ask how much learning and studying students generally do once they enroll.
A new book, “Academically Adrift: Limited Learning on College Campuses” (University of Chicago Press) by a professor at New York University and another at the University of Virginia, attempts to answer questions like these in a systematic way — and, as its title suggests, its findings suggest reason for concern.
In the book, and in an accompanying study being released Tuesday, the authors followed more than 2,300 undergraduates at two dozen universities, and concluded that 45 percent “demonstrated no significant gains in critical thinking, analytical reasoning, and written communications during the first two years of college.”
The universities are not identified — the authors only say they represent “a wide range” of the nation’s approximately 2,000 four-year institutions — but the yardstick against which such judgments are made is the Collegiate Learning Assessment, a standardized test that is essay-based and open-ended. (It is worth noting that in measuring broad analytic and problem-solving skills, the exam does not assess how much students concentrating in particular majors — physics or psychology, for example — have learned in their respective fields of study.)
The authors of “Academically Adrift” — Richard Arum, a professor of sociology and education at New York University, and Josipa Roksa, a professor of sociology at the University of Virginia — also question the degree of rigor of many students’ college course schedules.
For example, they found that 32 percent of the students whom they followed did not, in a typical semester, take “any courses with more than 40 pages of reading per week” and that 50 percent “did not take a single course in which they wrote more than 20 pages over the course of the semester.”
“What if sending students to college did not necessarily ensure that much was learned once there?” the authors ask in the introduction to their accompanying study, which is being released by the Social Science Research Council. “What if at the beginning of the 21st century many colleges and universities were not focused primarily on undergraduate learning, but instead had become distracted by other institutional functions and goals?”
In this respect, the authors’ research is consistent with the findings of the National Survey of Student Engagement, which has polled more than 2 million students at more than 1,000 colleges and universities over more than a decade — and reported that many spend little time studying or writing.
In addition to seeking to establish the statistical contours of what they contend is a national problem, Professors Arum and Roksa provide something of a corrective blueprint for colleges and universities. They note, for example, that students “who spent more hours studying alone” had greater gains on the standardized exam being used as a benchmark, as did students who took courses requiring “significant” reading and writing.
To comment, from your own perspective, on questions of how much college students learn or how hard they are asked to work, please use the comment box below.
Following are some of the comments:
I’m a graduate student teaching an introductory level course. The course catalog says that students will have only 25 pages of reading per week, and my department discourages having any writing assignments done out of class because students are so likely to plagiarize. I do a few short ones anyway (3 1-2 page papers). I curve all of my tests to make sure that my students get reasonable grades, but they complain endlessly on my evaluations that my expectations are too high for an introductory course. Since these evaluations are important for my career, I’m inclined not to go against the grain. There are no advantages for me in challenging my students, even though it is the right thing to do for the country and for them.
The dropout rate at my university is already well above 50%. In response, they are really focusing on doing what they can to keep kids in school. Unfortunately, that means little effort is spent on making sure they learn things while they are here. Maybe that is the right focus, but I have my doubts.
They learn how to funnel a gallon of beer in 5 seconds. They learn how to stay up all night pretending to study. They learn how to squeeze money from their parents to gamble at poker. They learn how to cell phone the questions on a test while they take it & get answers from the person on the other end.
Anyone want to join me in freeing ourselves from credentialism?
People possessed of the initiative to self-learn aren’t hired in the public sector. Successful, relevant experience doesn’t qualify .
You could be the worst candidate, but a degree is real prerequisite.
I appreciate Bill Gates for pretty much declaring ‘edupunk’ the future. It is also the past of many illustrious Americans.
I would love for the NYT to do a story on world figures in the arts, politics, science, social services who are better for not enlisting in a four year tour.
— Michelle in Hawaii
I teach physics at a major public university. I can confirm the fact that students do not work as much as they should. Polls here and my own surveys indicate that they spend just 10 to 15 hours per week (outside of class) working on their assignments. The use of student rating of teaching quality is well-intended, but counterproductive. As demonstrated clearly in a recent study at the Air Force Academy, faculty who make the students work hard get lower evaluations than those who make things easy. No surprise, is it? That study showed that there is a negative correlation between faculty ratings and students’ learning, as measured by student performance in subsequent courses. No surprise either!
— Milton Cole
Over the last decade, I have gone from assigning, regularly, 10-20 pages of writing in introductory or survey history courses to assigning none. The reasons:
1) I have more students to teach each semester (90-120), and less time to spend with each one.
2) Student access to on-line materials (including other students’ papers, for sale or free) means that opportunities to cut-and-paste are ubiquitous.
Too much time and effort is required, first of all, simply to determine if writing that students turn in is, in fact, written by students — that’s before I even get to the task of reading a paper for analysis, critical thinking, or writing skills.
Teaching students to write is very labor- and cognitive-intensive. You can’t teach students to write unless you have, AT MOST, 40-50 students per semester.
I applaud those instructors who toil on under much heavier burdens (for not enough pay). They deserve praise for achieving any progress at all.
— PhD, Connecticut
The key to teaching critical thinking and writing is guided trial-and-error, often with lots of discussion. One limiting factor here is class size + number of teaching assistants. When college classes go over around 25 students per professor/TA, then assigning a term paper (with 1-3 drafts or contributory assignments during the term) becomes impossible. We are forced to switch to short-answer exams. After around 50 students per professor/TA, we are forced to switch again to multiple choice tests, which teach little other than memorization. Above 80 students, even in-class discussion can get difficult. But if you check out most social science or humanities courses (where much critical thinking and writing is taught), classes can be as high as several hundred.
Also social science and humanities courses are being cut around the country. See the Coburn amendment last year which sought to defund political science at universities around the country. Critics argue that these “softer” courses are a waste of taxpayer money at best, and corrupt the youths at worst. They forget that they are often the main, even only, place at universities where critical thinking and writing are taught.
— Prof. at State School
It just goes to show that not everyone should be getting a college degree. If standards were raised, a smaller number of students, the most academically qualified, would be in college and could be given a better education because of smaller class sizes and higher standards. The notion that a college degree is for everybody, although this maximizes enrollments and consequently college business income, has resulted in huge unteachable class sizes and lowered standards which allow everyone to get through. When everyone has a college degree, the degree is not worth much.
Sunday 23 January 2011, from truthout
No one in the US government campaigns these days for the direct government hiring of our many millions of unemployed and underemployed people. That is despite the fact that those millions suffer the resulting losses of income and self-esteem, despite the fact that they become burdens on their families, friends, and neighbors, and despite the fact that their reduced purchasing hurts countless others who work to produce what the unemployed and underemployed can no longer afford. Even though the last President faced with huge unemployment created 11 million federal jobs between 1934 and 1941, any comparable government step is off the agenda of Democrats and Republicans now.
The conventional explanation – or better, excuse – for this inaction is ideology: the government, we are told, ought not to intervene in the economy because the private sector does all that better and cheaper. Before taking this seriously, even for an instant, consider two economic interventions our government is now undertaking. In the first, the US government’s National Institutes of Health has unveiled its plan to form a new National Center for Advancing Translational Sciences. Its official purpose is to have the government undertake research to find new drugs because the private sector is not doing enough of that, according to the Institues of Health director, Francis S. Collins. He says: “I am a little frustrated to see how many of the discoveries that do look as though they have promising therapeutic implications are waiting for the pharmaceutical industry to follow through on them.” All this is reported in a front page story in the New York Times (January 23, 2011) that explains this government intervention as aimed to offset and compensate for the private drug makers’ decision that work on new drugs is not profitable enough to warrant their investment.
In other words, because the private sector fails to do something deemed socially important, the government is stepping in to do that itself. Note the disparity. The massive unemployment and underemployment of workers by private capitalist employers is likewise socially important and is likewise something the private sector is failing to do because it is not profitable for them to do. Yet, no direct government hiring of unemployed and underemployed workers is underway or planned. How revealing.
For the second example (also reported in the same issue of the New York Times), let us turn to the joint news conference last week by President Obama and China’s President Hu Jintao. There Mr. Obama said “We want to sell you all kinds of stuff…planes…cars…software.” Later the two Presidents announced $45 billion in export deals with China for US corporations. This was nothing less than direct economic intervention to aid corporations. Much public money has been and continues to be spent in all sorts of ways to support US government agencies’ work to expand export markets for US corporations in China and elsewhere.
Evidently the US government does not believe in leaving the promotion and advertising of US goods abroad to the private sector that receives all the revenues from export sales. It feels that the private sector’s performance is inadequate, so the government must supplement, at public expense, insufficient private outlays for promotion with direct, publicly financed promotion. Yet we have no direct hiring to supplement the private sector’s inadequate employment of workers. How revealing.
The issue is not and never has been about whether to have the government intervene directly in American capitalism. The issue has always been for whom and in whose interests does the government intervene (and choose not to intervene).
We compare the income tax paid by an entrepreneur in Norway with what an American counterpart would have paid.
|Income after deductions||$501,000||
$516,000 for state tax
$453,000 for federal tax
|Payroll taxes||National insurance, employee contribution, 7.8% of gross: $42,000||Social Security (6.2% of first $106,800): $6,600; Medicare (1.45%): $7,800|
Income tax (28% flat rate): $140,000
Surtax (9% on income above $76,000; 12% on income above $124,000): $54,000
Federal income tax (progressive, up to 35%): $136,000
State tax (5.3% flat rate): $27,000
No state tax
|Total income tax bill||$236,000
|Effective income tax rate||43.9%
Editor's Note: If you figured in the cost of health care in the US and the cost of other benefits that you get for free in Norway, the effective tax rates in the US might be even higher than those in Norway.
by Robert Reich
Word has it that the President will be emphasizing “improving American competitiveness” in his State of the Union Address Tuesday night. As I’ve noted, the term is meaningless — but it’s politically useful. CEOs and many conservatives think it means improving the profitability of American companies. Liberals and labor unions think it means increasing export jobs.
Neither touches at the heart of the matter. Hopefully, the President will. Over the long term, the only way to improve the living standards of most Americans is to invest in our people – especially their educations, skills, and the communications and transportation systems linking them together and with the rest of the world (infrastructure).
In the global economy, the only “asset” that’s unique to any nation – and that determines its living standard — is the people who comprise it. Almost everything else moves across global boundaries at the speed of an electronic impulse. (Money is available to any major business from anywhere around the world. Any entrepreneur can rent or purchase additional office or factory capacity, and the most up-to-date machinery, instantly from anywhere. Commodities, supplies, and components can be summoned almost as quickly from anywhere.)
That’s why spending on education, infrastructure, and basic R&D (which educates our people in the technologies and processes of the future) is fundamentally different from other categories of government spending. These outlays are really investments in the future productivity of our people.
Here’s where the debate over the deficit comes in. If the federal budget were organized sanely, it would be divided into three parts: (1) Past obligations, (2) Current needs, (3) Future investments.
Past obligations reflect payments Americans have made over the course of their lives in the expectation of receiving social insurance (mostly Social Security and Medicare) when they retire. These past obligations need to be honored because they’re based on implicit contracts between the public and the government. If such contracts are to be altered, they should be altered only for future generations who haven’t yet entered into them.
Current needs reflect everything we want today in order to remain safe and healthy (from national defense through Medicaid). The current needs budget should be balanced each year. It’s appropriate that we pay for all our current needs through our current taxes.
But future investments are qualitatively different. There’s no problem with borrowing in order to finance such investments. While it might be irresponsible for a family to go into debt in order to finance a worldwide cruise, it could be equally irresponsible for the same family not to borrow money in order to help finance their kids’ college.
In fact, borrowing in order to increase future productivity is sensible – up to the point where the return on the investment is no longer higher than the cost (principal plus interest) of the loan.
Ideally, the federal budget would be divided along these lines – past, present, and future. And the future, or “capital,” budget (containing spending on education, infrastructure, and basic R&D) would be separated from the rest, with its own system for “scoring” – that is, evaluating – whether the likely return is worth the cost. It won’t be an easy call in every case, of course, but the Congressional Budget Office and the OMB take on much harder ones.
Who knows? The President may even propose something like this tomorrow night.
by Sam Pizzigati
Following World War II, the United States produced something the world had never seen: a mass middle class. For the first time, a majority of a major nation's people had real money left over after paying for basic food and shelter.
New York and California served as geographic bookends to this colossal achievement. They offered ordinary citizens lives unimaginable only a few short years before. Activist government policies made those lives possible. Government-subsidized loans raised new middle-class suburbs from potato fields and sugar beet acres. Tax dollars funded new roads, schools, and parks.
"California's children, swarming on all those new playgrounds, seemed healthier, happier, taller," as Atlantic editor Benjamin Schwarz has noted. "A sweet, vivacious time."
That time may be gone for good. The new governors of New York and California, both Democrats, have essentially declared America's mass middle class ancient history.
Andrew Cuomo in New York and Jerry Brown in California are pushing a fundamental "realignment" that goes beyond the budget cutbacks that have become a grim annual routine in state capitals.
Brown and Cuomo are attacking the foundational core of America's middle class: the notion that public policies can improve ordinary people's lives. Instead, they're squeezing public employees and the public goods and services they provide.
Consider what's happened to higher education in California. Fifty years ago, every California high school grad had access to free community college. High-achievers paid rock-bottom rates to attend some of the world's finest universities. Today, under Jerry Brown's new fiscal game plan, revenue from student fees will exceed the state government’s contribution to higher education for the first time in California history.
Brown says he has no alternative.
"This is the world we live in," Brown has pronounced. "You can't manufacture money."
But governments can raise revenue by taxing their most affluent. Back in America's middle class golden age, that's what happened.
Brown refuses to go down that road. The temporary California tax hikes that he wants to preserve--a 1 percent boost in state sales tax, a 0.25 percent increase across the board on the state income tax, among others--all fall heavier on middle-income Californians.
In New York, Andrew Cuomo isn't willing to raise taxes on the rich at all. His rationale for that refusal?
"The working families of New York," Cuomo says, "cannot afford tax increases."
Cuomo defines "working families" to include the wealthy. "They work, too," he explains. Indeed they do. But under current law New York's wealthy actually spend less of their income in state and local taxes than ordinary New Yorkers.
New Yorkers making between $33,000 and $95,000, analysts Chloe Tribich, Sunshine Ludder, and Ron Deutsch recently pointed out, pay 11 percent of their incomes in state and local tax. New York's richest 1 percent--taxpayers making over $633,000--only pay 7 percent.
In the middle class's heyday, New York's wealthy faced a far heavier tax burden. In fact, since 1980, the top state tax rate on New York's highest incomes has dropped by half.
So has the top federal tax rate, from 70 to 35 percent.
New York and California alone have more taxpayers making over $200,000 than all 22 states that John McCain carried in the 2008 Presidential election combined, according to David Callahan, a senior fellow at the think tank Demos.
Without the recent tax deal Obama brokered with the GOP, Callahan notes, these affluent would be paying federal taxes, this year and next, at a 39.6 percent top rate. So why not, he asks, raise top state income tax rates--from 10.5 to 15 percent in California and from 8.97 percent to 13.5 percent in New York--to take back what the rich are saving at the federal level?
Don't hold your breath. Neither Brown nor Cuomo sees any reason to inconvenience the financially fortunate. We're just "going to have to reduce government spending," Cuomo insists.
For the awesomely affluent, that makes sense. Rich people, after all, don't require public schools and parks and libraries. They feel they don't need government spending. Only the little people do.© 2011 OtherWords
January 20, 2011
We venture to the very heart of the hell that is Scandinavian socialism—and find out that it’s not so bad. Pricey, yes, but a good place to start and run a company. What exactly does that suggest about the link between taxes and entrepreneurship?
AN EXPANSIVE MOOD Jan Egil Flo (left), Simen Staalnacke (center), and Peder Børresen, the co-founders of Moods of Norway. In the early days of their $35 million company, they lived almost rent free, courtesy of the government.
Wiggo Dalmo is a classic entrepreneurial type: the Working-Class Kid Made Good.
Dalmo, who is 39, with sandy blond hair and an easy smile, grew up in modest circumstances in a blue-collar town dominated by the steel industry. After graduating from high school, he apprenticed as an industrial mechanic and got a job repairing mining equipment.
He liked the challenge of the work but not the drudgery of working for someone else. "I never felt like there was a place for me as an employee," Dalmo explains as we drive past spent chemical drums and enormous mounds of scrap metal on the road that leads to his office. When he needed an inexpensive part to complete a repair, company rules required Dalmo to fill out a purchase order and wait days for approval, when he knew he could simply walk into a hardware store and buy one. He resented this on a practical level—and as an insult to his intelligence. "I wanted more responsibility at my job, more control," he says. "I wanted freedom."
In 1998, Dalmo quit his job, bought a used pickup truck, and started calling on clients as an independent contractor. By year's end, he had six employees, all mechanics, and he was making more money than he ever had. Within three years, his new company, Momek, was booking more than $1 million a year in revenue and quickly expanding into new lines of business. He built a machine shop and began manufacturing parts for oil rigs, and he started bidding on and winning contracts to staff oil drilling sites and mines throughout the country. He kept hiring, kept bidding, and when he looked around a decade later, he had a $44 million company with 150 employees.
As his company grew, Dalmo adopted the familiar habits of successful entrepreneurs. He bought a Porsche, a motorcycle, and a wardrobe of polo shirts with his corporate logo on the chest. As rock music blasts from the speakers in his office, Dalmo tells me that he is proud of the company he has created. "We tried to build a family, and we have succeeded," he says. "I have no friends outside this company."
This is exactly the kind of pride I often hear from the CEOs I have met while working at Inc., but for one important difference: Whereas most entrepreneurs in Dalmo's position develop a retching distaste for paying taxes, Dalmo doesn't mind them much. "The tax system is good—it's fair," he tells me. "What we're doing when we are paying taxes is buying a product. So the question isn't how you pay for the product; it's the quality of the product." Dalmo likes the government's services, and he believes that he is paying a fair price.
This is particularly surprising, because the prices Dalmo pays for government services are among the highest in the world. He lives and works in the small city of Mo i Rana, which is about 17 miles south of the Arctic Circle in Norway. As a Norwegian, he pays nearly 50 percent of his income to the federal government, along with a substantial additional tax that works out to roughly 1 percent of his total net worth. And that's just what he pays directly. Payroll taxes in Norway are double those in the U.S. Sales taxes, at 25 percent, are roughly triple.
Last year, Dalmo paid $102,970 in personal taxes on his income and wealth. I know this because tax returns, like most everything else in Norway, are a matter of public record. Anyone anywhere can log on to a website maintained by the government and find out what kind of scratch a fellow Norwegian taxpayer makes—be he Ole Einar Bjørndalen, the famous Norwegian biathlete, or Ole the next-door neighbor. This, Dalmo explains, has a chilling effect on any desire he might have to live even larger. "When you start buying expensive stuff, people start to talk," says Dalmo. "I have to be careful, because some of the people who are judging are my potential customers."
Welcome to Norway, where business is radically transparent, militantly egalitarian, and, of course, heavily taxed. This is socialism, the sort of thing your average American CEO has nightmares about. But not Dalmo—and not most Norwegians. "The capitalist system functions well," Dalmo says. "But I'm a socialist in my bones."
Norway, population five million, is a very small, very rich country. It is a cold country and, for half the year, a dark country. (The sun sets in late November in Mo i Rana. It doesn't rise again until the end of January.) This is a place where entire cities smell of drying fish—an odor not unlike the smell of rotting fish—and where, in the most remote parts, one must be careful to avoid polar bears. The food isn't great.
Bear strikes, darkness, and whale meat notwithstanding, Norway is also an exceedingly pleasant place to make a home. It ranked third in Gallup's latest global happiness survey. The unemployment rate, just 3.5 percent, is the lowest in Europe and one of the lowest in the world. Thanks to a generous social welfare system, poverty is almost nonexistent.
Norway is also full of entrepreneurs like Wiggo Dalmo. Rates of start-up creation here are among the highest in the developed world, and Norway has more entrepreneurs per capita than the United States, according to the latest report by the Global Entrepreneurship Monitor, a Boston-based research consortium. A 2010 study released by the U.S. Small Business Administration reported a similar result: Although America remains near the top of the world in terms of entrepreneurial aspirations -- that is, the percentage of people who want to start new things—in terms of actual start-up activity, our country has fallen behind not just Norway but also Canada, Denmark, and Switzerland.
If you care about the long-term health of the American economy, this should seem strange—maybe even troubling. After all, we have been told for decades that higher taxes are without-a-doubt, no-question-about-it Bad for Business. President Obama recently bragged that his administration had passed "16 different tax cuts for America's small businesses over the last couple years. These are tax cuts that can help America—help businesses...making new investments right now."
Since the Reagan Revolution, which drastically cut tax rates for wealthy individuals and corporations, we have gotten used to hearing these sorts of announcements from our leaders. Few have dared to argue against tax cuts for businesses and business owners. Questioning whether entrepreneurs really need tax cuts has been like asking if soldiers really need weapons or whether teachers really need textbooks—a possible position, sure, but one that would likely get you laughed out of the room if you suggested it. Or thrown out of elected office.
Taxes in the U.S. have fallen dramatically over the past 30 years. In 1978, the top federal tax rates were as follows: 70 percent for individuals, 48 percent for corporations, and almost 40 percent on capital gains. Americans as a whole paid the ninth-lowest taxes among countries in the Organization for Economic Cooperation and Development, a group of 34 of the largest democratic, market economies. Today, the top marginal tax rates are 35 percent, 35 percent, and 15 percent, respectively. (Even these rates overstate the level of taxation in America. Few large corporations pay anywhere near the 35 percent corporate tax; Warren Buffett has famously said that he pays 18 percent in income tax.) Only two countries in the OECD—Chile and Mexico—pay a lower percentage of their gross domestic product in taxes than we Americans do.
But there is precious little evidence to suggest that our low taxes have done much for entrepreneurs—or even for the economy as a whole. "It's actually quite hard to say how tax policy affects the economy," says Joel Slemrod, a University of Michigan professor who served on the Council of Economic Advisers under Ronald Reagan. Slemrod says there is no statistical evidence to prove that low taxes result in economic prosperity. Some of the most prosperous countries—for instance, Denmark, Sweden, Belgium, and, yes, Norway—also have some of the highest taxes. Norway, which in 2009 had the world's highest per-capita income, avoided the brunt of the financial crisis: From 2006 to 2009, its economy grew nearly 3 percent. The American economy grew less than one-tenth of a percent during the same period. Meanwhile, countries with some of the lowest taxes in Europe, like Ireland, Iceland, and Estonia, have suffered profoundly. The first two nearly went bankrupt; Estonia, the darling of antitax groups like the Cato Institute, currently has an unemployment rate of 16 percent. Its economy shrank 14 percent in 2009.
Moreover, the typical arguments peddled by business groups and in the editorial pages of The Wall Street Journal— the idea, for instance, that George W. Bush's tax cuts in 2001 and 2003 created economic growth—are problematic. The unemployment rate rose following the passage of both tax-cut packages, and economic growth during Bush's eight years in office badly lagged growth during the Clinton presidency, before the tax cuts were passed.
And so the case of Norway—one of the most entrepreneurial, most heavily taxed countries in the world—should give us pause. What if we have been wrong about taxes? What if tax cuts are nothing like weapons or textbooks? What if they don't matter as much as we think they do?
I'm sure I've already pissed off some people with that question—and not just the rich ones. It's hard these days to say anything positive about taxes without being accused of economic treason. President Barack Obama's health care plan and his proposal to allow certain Bush tax cuts to expire in 2012—a move that would cause the top marginal tax rate on individuals to go up by 4.6 basis points, to the rate that prevailed in the late 1990s—have caused the administration to be eviscerated by business groups and their allies. "We are essentially undoing the very thing that has made America exceptional: the free enterprise system," wrote congressional candidate (and now a Republican congressman from New York) Richard Hanna in a letter published by the National Federation of Independent Business. "We can no longer devalue the energy of the entrepreneur this way." Newt Gingrich, a presidential hopeful and the former Speaker of the House, has called Obama's presidency the first step toward "European socialism and secularism," which he has suggested is a greater threat to our country than Islamic terrorism.
The idea that Americans should be more terrified of Norwegian economists than of al Qaeda bombmakers is pretty nutty, but I couldn't help wondering: How bad would European socialism really be? What if President Obama's health care and tax policies—which so far have been modest by European standards—are just the beginning? What if his proposal to allow the income tax rate on the richest Americans to rise by several basis points is just the first step? What if, say, by some crazy backdoor dealing involving Joe Biden, Nancy Pelosi, and the Ghost of Ted Kennedy, liberals manage something more sweeping: taxes of 50 percent, a government-run health care system, an expansion of Social Security, and sweeping regulations on business?
In other words, instead of some American version of European socialism, what if we got the genuine article? What if the nightmare scenario were real? What if you woke up tomorrow as a CEO in a socialist country?
Sunday 23 January 2011
As Sacramento prepares to inaugurate governor-elect Jerry Brown next month, the main focus has been on the state’s looming budget deficit and how the legislature and Brown plan to bridge that gap.
For years now, Californians have been told that we must choose between cutting public services and public service employees, or budget Armageddon.
However, this is a false choice that has been driven more by political rhetoric than actual reality, as The Wall Street Journal has observed.
What we must bear in mind instead is that there is a direct relationship between California's quality of life and the quality of its public services and the people who provide those services.
Imagine being unable to walk in a park on a sunny afternoon, or borrow books from the library or hang a picture drawn by your child at school on the refrigerator.
Imagine traversing potholed roadways or waiting hours to catch a train or bus home after work or telling your children that you can't afford to send them to college.
For the majority of Californians who have to work for a living, this erosion in our quality of life is already happening.
Surprisingly, or perhaps unsurprisingly, polls consistently show that a majority of voters support funding for parks, libraries, schools, reliable roads and transit systems, health care, childcare and environmental protection.
As stewards of these sources of our common wealth, public service employees are necessarily more highly educated, more highly skilled and more highly experienced.
That is why proposals aimed at slashing public services to balance the budget are self-defeating.
Economists agree that diminishing public service jobs and benefits will slow California's economic recovery and increase unemployment.
These are unacceptable outcomes.
That is why we must find the courage to confront the root cause of our state's structural budget deficit.
California needs to close the loopholes in its tax code and require stricter oversight of all the state's tax subsidy programs, such as the failed enterprise zone program, to ensure that taxpayer dollars are spent wisely.
According to an article by The San Francisco Chronicle's Washington correspondent Carolyn Lochhead, this would result in annual budget surpluses for some time to come.
We should also repeal those tax breaks recently handed out to Comcast, Swiss pharmaceutical giant Roche and Hollywood film studios for the ostensible purpose of creating jobs, since these companies have done nothing but lay off more people and ship additional jobs out of California.
If the free market is really the ideal mechanism for creating wealth, taxpayers should not have to subsidize the operations of private companies.
Similarly, the state should stop paying private contractors more than $34 billion a year to do jobs that civil servants can perform for roughly half the cost.
Finally, since most of our tax dollars over the past two years were spent to bail out the banks and financial institutions that caused the Great Recession, California should institute a surcharge on financial service transactions like stock trades to make sure that Wall Street, not Main Street, bears the cost of cleaning up this economic mess.
These approaches will help us maintain a high quality of life through quality public services provided by highly skilled, educated and experienced civil servants reminiscent of first world nations.
Monday 24 January 2011, from truthout
(Image: Berrett-Koehler Publishers; Edited: to)
The motivating force of the theory of a democratic way of life is still a belief that as individuals we live cooperatively, and, to the best of our ability, serve the community in which we live, and that our own success, to be real, must contribute.
- Eleanor Roosevelt
There was a dragon here hundreds of years ago, here in the Basque country in northern Spain, a place steeped in tradition, a hilly expanse between the mountains and the sea. Local lore has it that the Basque language, the only European one with no known root language, is a remnant from the time of Atlantis, which may have vanished into the Atlantic Ocean not far from here eons ago.
Standing on a hillside overlooking an early autumn valley, Louise and I were amazed by the simple beauty of the mountain of the dragon, its gray and balding peak towering above the town like an ancient ziggurat. This is Mondragon, a small town named after the dragon of the mountain, the dragon probably being, a local resident told us, a particularly brutal lord or local king who exercised the Rite of the First Night, a dreaded ritual when fair maidens were whisked away on their wedding night.
The Rite of the First Night was said to have been common across Europe throughout the Dark and Middle Ages, although it was probably far less common than modern folklore suggests. When a young woman was married, she was required to spend the night of her wedding with—and lose her virginity to—the local lord or king.
Oddly enough, all across Europe one still finds remote communities where most of the people have similar large noses or red hair or big ears and so on—all descendants of some ancient lord who fathered the first children of innumerable families. European society was patriarchal and hierarchal, and because the king lived in distant Toledo, his defilement role was filled by the local lord. The sheer horror of his men coming to take away the new bride became the legend of the dragon.
Now here is the ultimate irony: right here in this valley, in the shadow of the dragon, has grown a business enterprise that—in virtually every way imaginable—is the antithesis of a dragon.
And for all of us in the United States, this business enterprise represents a model that can be transformative and sow the seeds of a new kind of business entity that is, at its heart, more equitable, more fair, and more just—and therefore more truly American— than the predatory multinational corporations that are now typical of twenty-first-century America.
Cooperation and Corporation
The Mondragon Cooperative is neither hierarchical nor patriarchal. There’s no king or lord. The corporation is owned by its employees. The most highly paid person earns less than six times the most poorly paid person. Decisions are made by workers on the front lines and then communicated up to the “managers” for implementation.
And this is no flaky, hippy-dippy communelike experiment. It is the world’s largest federation of cooperatives, employing more than 90,000 people in more than 250 companies that focus on four areas: retail, finance, industry, and knowledge. In 2008, Mondragon’s revenue was €16.8 billion ($24.2 billion). All—every last euro cent—of the profits are distributed in one of three ways: reinvested in the business, given to worthy local charities, or paid as dividends to Mondragon’s worker-owners.
What Mondragon has shown, by its sheer size, scope, and success, is a new economic model that avoids the pitfalls of both modern capitalism and old-fashioned communism.
“Capitalism” has its deficiencies, whether institutions are for- profit (think Goldman Sachs, where stocks are sold to investors or the public) or not-for-profit (think Red Cross, where the CEO earns $500,000 per year and the “stock” is controlled by a board of directors).
Similarly, “communism” has its problems because the state owns the business, employees are simply agents of the state, and nothing works because nobody is accountable to anybody and there’s no incentive to do better.
Most importantly, both capitalism and communism are top- down hierarchies that stifle human ingenuity.
But Mondragon is the world’s largest example of a third way: worker-owned cooperatives that foster enterprise as well as equity. Unlike the top-down nature of capitalism and communism, Mondragon has flipped that pyramid upside down.
That flipping is apparent when one visits any of the Mondragon businesses. Louise and I were on the factory floor of an absolutely spotless washing-machine manufacturing facility of the Mondragon Cooperative in 2009 when we witnessed the true cooperative nature of the enterprise. Like all Mondragon businesses, this state-of-the-art industrial facility, converting sheets of raw metal into finished washing machines for sale all around the world, is run by its employees.
As we stood watching, a group of about a dozen workers assembled electronics on a U-shaped assembly line. A “manager” walked up and asked for everyone’s attention. Our translator shared with us the essence of the conversation: next Thursday there was going to be a schedule change, the result of some local event.
At first it sounded like a typical manager telling his employees what was what. “Thursday our systems will change, and we’ll have to produce a different number of units,” he said. The workers nodded.
Then came the bombshell: “How do you all think we should do this?” he asked.
A conversation ensued, and it dawned on me that the workers were not arguing or fighting or complaining; they were offering concrete suggestions. With each suggestion others would point out its strengths or weakness or offer their own.
The “manager” was facilitating the conversation and taking notes. Within 10 minutes some sort of a consensus was achieved, and the workers told the “manager” how they’d handle Thursday’s change. He thanked them and left, his job now to communicate up to the cooperative’s administrators how the assembly line would adjust itself to Thursday’s changes.
This was about as far from the Rite of the First Night as it’s possible to imagine. In Mondragon, in the shadow of the ancient—and now dead—dragon, the descendents of the serfs have taken charge. The result is one of the most successful—and equitable—business models in the world.
And it’s not just the business pyramid that has been upended; there’s a sociocultural element at Mondragon that is just as transformational to its local cultures as is the idea of workers owning and running their own businesses.
Mondragon University was the first institution started here by Don José Maria Arizmendiarrieta, the priest who began in the 1940s what has now grown to become the worldwide Mondragon organization. Investing in education—building knowledge—is like building a factory. Through Mondragon University they’re investing in humans just as much as the factories are investing in the business infrastructure of the towns where Mondragon works. That investment in educating and training students at a university with strong links to the cooperatives is evident in the fact that almost all students find work within weeks of graduation. Mondragon’s practice of placing people over profits clearly produces results that benefit all.
by Dean Baker
When China's President Hu Jintao came for his state visit last week, the White House press corps completely ignored almost all the substantive issues raised by Hu's visit. The domestic policy issues raised by this trip were altogether invisible in the reporting in major news outlets.
The news accounts were filled with the long list of items that President Obama was likely to raise with President Hu. There are issues about China respecting the patents and copyrights of US firms. The US has concerns about market access in China for our retailers, our financial firms and some of our manufactured products.
And then there are issues about the relative value of the dollar and yuan. Yep, the White House press corps got together the whole list, presented it to the public, and then went home and had a drink.
If these reporters actually had to cover the news to get a paycheck, then this checklist of concerns would have been just the beginning of their job. It's great for the Obama administration to come up with a wishlist that it would like from China's leadership. But this is not Disney World. China doesn't hand the United States everything on its wishlist.
China is a superpower that doesn't have to do whatever the United States wants. It makes concessions to the United States in exchange for items on its own wishlist.
This means that the United States is not going to get everything on its list. In fact, President Obama must decide which items he will prioritise with China and put these items first, as opposed to other items which he will tell Hu are of less consequence. The real job of reporting in Washington last week should have been trying to find out the actual priority that President Obama was assigning to the various items on his list.
This is what the public needs to know: different items will obviously matter more to some people than others. Most people in the United States probably don't give a damn if the Chinese pay Bill Gates for making copies of MS Windows. The public may even applaud if Chinese companies make unauthorised copies of Pfizer's drugs, so that more people in China can afford the medicine they need to save their life. They probably also don't care much if China's bureaucracy makes it difficult for Wal-Mart to expand or for Goldman Sachs to be a big player in China's financial markets.
But most of the public really does have a very big interest in the value of the yuan against the dollar. If the dollar is overvalued against the yuan by 30%, then this has the same effect as the United States imposing a tariff of 30% on the items that we may try to export to China. It is pretty hard to export goods if you impose a 30% tax on them.
On the other side, a currency that is overvalued by 30% is equivalent to providing a subsidy to China's manufacturers of 30% for the goods that the United States imports from China. A 30% subsidy for imports gives them a very large advantage competing with US-made goods.
Not surprisingly, this overvaluation is making it very difficult for US manufacturers to compete with China. The overvaluation of the dollar against the Chinese yuan (and other currencies) is the main reason for the huge US trade deficit. It is also one of the main reasons that the country has lost 6 million manufacturing jobs in the last dozen years.
The loss of relatively well-paying manufacturing jobs has put downward pressure on the wages of large segments of the US workforce. It is one of the main factors behind the growth of inequality in the United States in the last three decades.
So, we know that the value of the yuan was one of the items on President Obama's wishlist, but we do not know how high up it was on the list. Did President Obama tell President Hu that he doesn't care about Microsoft and Pfizer and Wal-Mart and Goldman; he just wants to see the dollar fall against the yuan?
Or did Obama tell Hu that he would like to see the yuan rise against the dollar, but he understands the problems that this would create in China. Instead, Obama may have suggested that Hu do more to protect Pfizer's patents and swing a few more deals to Goldman.
The fact is that the public has no clue as to what the Obama administration's priorities were in negotiating with China – because the media made no effort to find out. It somehow escaped the White House press corps, but the deals with China are, first and foremost, about battles over domestic policy. President Obama either pushed for Goldman Sachs or he pushed for the nation's workers, but it doesn't make sense that he pushed for both.
The media, apparently, are not going to tell the American people which side the President chose. Fortunately, the currency markets will.© 2011 Guardian News and Media
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues.
01.24.11 - 9:45 AM, from Common Dreams
by Abby Zimet
Never mind Tucson or the recession: An overflow crowd of 57,000 jammed the 50th anniversary of the nation's largest gun trade show, where the Glock reigned supreme and mental health failures explained Jared Loughner and gun control was happily declared "a failed social experiment." The crowds at the annual Shot Show in Las Vegas reflected national trends: last year federal and state officials processed 14 million background check requests, up almost two million from the year before.
A carpeted expanse set aside for Glock - maker of the Glock 19 pistol that Mr. Loughner is accused of using - was one of the largest spaces at the convention. Two Glock employees, dressed in black, stood on a riser and offered tips on target shooting. "How many Glock shooters do we have in the crowd?" asked Randi Rogers. As just about every hand rose, Ms. Rogers smiled and said, "Oh, I like that."
"It's like waking up on Christmas everywhere you turn." - John Brand of Logan's Gun Shop in Oklahoma.
by John Nichols
The great guessing game in official Washington – and the surrounding punditocracy – this week goes to the question of whether President Obama will use his State of the Union Address to open a discussion about making changes to Social Security that would undermine the retirement guarantee the federal government has maintained for three quarters of a century.
"Nobody knows what the president is going to do on Social Security,” says Roger Hickey, co-director of the Campaign for America’s Future. “It’s a huge question for people like me who are strong supporters of Social Security.”
Hickey’s right. No one outside the White House knows for certain what the president will say.
But Hickey and others who are involved with the more than 200 groups (including the AFL-CIO, AFSCME, SEIU, National Women’s Law Center, USAction and MoveOn.org) that have formed the Strengthen Social Security Campaign know what they fear the president could say.
The co-chairs of Obama’s deficit commission have already outlined a plan for reining in the federal deficit by reducing Social Security benefits and schemes for “supplementing” the program, which is a polite language for “privatization.” The Republican who will respond to Obama’s speech, House Budget Committee chairman Paul Ryan, R-Wisconsin, has a roadmap for going even further.
If Obama is in the mood for some political triangulation, this State of the Union speech – which sets the tone for his 2012 reelection campaign – would be the place to establish his deficit-buster credentials with a jab at Social Security. The problem, of course, is three-fold:
1. Attacking stable programs such as Social Security, Medicare and Medicaid, buys into the absurd arguments of conservatives who are far more interested in killing off federal programs than fiscal responsibility – let alone societal good. To the extent that Social Security faces any challenges, they can be addressed with modest tweaks to payroll taxes and benefits. Radical restructuring and privatization are unnecessary.
2. Accepting the argument that Social Security must be changed in any substantial way buys into the broader argument that entitlements that serve working Americans are the cause of fiscal instability, as opposed to endless wars, bank bailouts and ever-expanding tax breaks for billionaires.
3. If a Democratic president starts arguing for serious changes in Social Security, Medicare and Medicaid, that legitimizes Republican positions on entitlement issues and pushes the debate to the right. That creates internal tension within the Democratic Party, not just between the White House and Democrats in Congress, but between Democrats in Washington and Democratic governors, legislators and local officials who are struggling to maintain an economic safety net.
These are the sorts of concerns that prompted Vermont Senator Bernie Sanders to write Obama about “worrisome reports” that the president might use the State of the Union address to propose cuts in Social Security. “I hope that information is wrong and that you will stand by your campaign promises to strengthen Social Security,” read the letter from Sanders. “I urge you once again to make it clear to the American people that under your watch we will not cut Social Security benefits, raise the retirement age or privatize this critical program.”
The message is being echoed by labor unions, senior groups and religious organizations as the State of the Union Address approaches.
“Let’s get one thing straight right at the beginning: Social Security is not responsible for the deficit – the program actually has been running surpluses for decades, to the tune of $2.6 trillion total,” reads a message from Sojourners, the Christian social justice group that champions programs to address poverty.
“Social Security is based on a promise: If you pay into the system with your payroll taxes, then you earn the right to guaranteed benefits. It is a system that reflects our values as a nation – values also found in scripture. There is no trust more sacred to biblical faith than the injunction to care not only for our families but also for those in need. Social Security is not just for the elderly – it also helps low-income children, widows and widowers, those with disabilities, and children without parents,” the Sojourners message continues. “In fact, without the 75-year-old program, nearly half of elderly Americans would be in poverty; with it, only 10 percent are.”
On the political side, Progressive Democrats of America has launched a “Keep Your Promise” campaign urging President Obama to use the State of the Union Address to restate past commitments to preserve Social Security.
“Nearly all Americans depend on Social Security at some point in their lives. Many are retirees. But millions are disabled workers, widows and widowers, and children who have lost a loved one. We need to keep the promise alive for all of us,” notes PDA. “Fortunately, President Obama has supported our position in the past--no benefit cuts, no raising the retirement age, no cuts in the COLA and no privatization. In a 2007 newspaper editorial, Obama said, ‘I do not want to cut benefits or raise the retirement age. I believe there are a number of ways we can make Social Security solvent that do not involve placing these added burdens on our seniors.’”
Along with the Strengthen Social Security Campaign, PDA is circulating a review of Obama’s past statements that places them in the context of the current debate.
“In blaming Social Security for the deficit, politicians and pundits like to claim that Social Security is on the brink of bankruptcy. In fact, Social Security currently has a $2.6 trillion surplus. But with an aging population, it will inevitably start to feel the strain. President Obama addressed that, too, in an October 2008 campaign video: ‘The best way forward is to first look to adjust the cap on the payroll tax. ... Ninety-seven percent of Americans will see absolutely no change in their taxes under my proposal. ... What it does allow us to do is to extend the life of Social Security without cutting benefits or raising the retirement age.’ And candidate Barack Obama responded to candidate John McCain's suggestion that the way to keep the pressure off of Social Security would be to cut cost-of-living adjustments or raise the retirement age, ‘I will not do either.’”
PDA and other groups want to hear those words once more on Tuesday.
“President Obama's State of the Union address will be on January 25,” the groups says, while urging progressives to: “Let him know that he must state in no uncertain terms that he supports Social Security and will veto any threats to its integrity. Tell him you support Social Security and want to see it strengthened, not weakened.”© 2011 The Nation
by Jay Walljasper
Social change is not something easily diagrammed on a chart. Sweeping transformations that rearrange the workings of an entire culture begin imperceptibly, quietly but steadily entering people’s minds until one day it seems the ideas were there all along. Even in our age of instantaneous information—when a scrap of information can zoom around the globe in mere seconds, people’s world views still evolve quite gradually.
Learning from the Right
This is exactly how the paradigm of corporate power came to rule the world. First articulated in large part by an obscure circle of Austrian economists, it surfaced in the United States during the 1950s as a curious political sideshow promoted by figures such as novelist Ayn Rand and her protégé Alan Greenspan.
The notion of the market as the bedrock of all social policy entered mainstream debate during the Goldwater campaign in 1964, which appeared to mark both its debut and its demise. Despite Republicans’ spectacular defeat in elections that fall—which extended from the White House all the way to local races—small bands of pro-market partisans refused to accept the unpopularity of their theories. Instead, they boldly launched a new movement that would eventually turn American life upside down.
Bankrolled by wealthy backers who understood that modern politics is a battle of ideas, market champions shed their image as fusty reactionaries swimming against the tide of progress and gradually refashioned themselves as visionaries charting a bold course for the future.
Their ranks swelled throughout the late 1970s as an unlikely combination of libertarian dreamers, big-business opportunists, and anxious defenders of traditional values signed up for the cause. The successive elections of Margaret Thatcher in Britain, Ronald Reagan in the United States, and François Mitterrand in France confirmed market fundamentalists’ global ascendancy. Thatcher and Reagan, each in her and his own distinct way, became effective advocates for the idea that the market should be the chief organizing principle of human endeavor. Mitterrand, on the other hand, was a dedicated socialist but soon discovered that the growing influence of international capital rendered him powerless to carry out promises of his 1981 election campaign. This was final confirmation that we had entered a new age of corporate domination.
Ever since then, our world has been shaped by these forces. Alan Greenspan became the most influential economic policy maker in recent history during eighteen years as chairman of the U.S. Federal Reserve. And the market paradigm is now seen by many — a lot of whom did not begin as right-wingers — as an indisputable truth on the same level as the Ten Commandments or the laws of physics.
Today, it feels as though everything is for sale to the highest bidder—from the names of sports stadiums to DNA sequences that make human life possible. Since the 1980s, reform movements of the left and center successfully resisted certain extreme elements of the radical right agenda, but many Americans still believe a free-market blueprint for the future is inevitable. Progress, once viewed as the gradual expansion of social equity and opportunity, is now widely viewed as the continual expansion of economic privatization and unchecked corporate power.
Introducing the Commons Paradigm
There are emerging signs that market fundamentalism has passed its peak as the defining idea of our era. In the United States, the first glimmer of hope was when the Bush administration’s plan to partially privatize Social Security funds in the stock market gained little traction in Congress and public opinion. Painful financial upheavals around the globe revealed the glaring weaknesses of the current economic model for all to see, leaving some market true believers scrambling to embrace new policies. Yet old ideologies don’t quietly fade, especially when they enjoy sizable support in the corporate world. We’ve seen a fierce backlash against Barack Obama’s admittedly modest departures from rigid market thinking.
At the same time, a group of activists, thinkers, and concerned citizens around the world who are rallying support for the idea of a commons-based society. At this point, they’re a scrappy bunch—many with backgrounds in various social movements, community causes, and Internet initiatives—not so different from the dedicated market advocates of the 1950s, except in where they place their hopes. These commoners, as they call themselves, see possibilities for large numbers of people of diverse ideological stripes coming together to chart a new, more cooperative direction for modern society.
The volatile political mood of our era bears some resemblance to the late 1970s when liberalism was losing its footing and conservative policy makers refashioned their old political rhetoric, based on social exclusion and apologies for capitalism, into a shiny new philosophy: “the market.” Pre- viously the thrust of right-wing thought had been focused on what they were against (civil rights, labor unions, social programs, et cetera), but by claiming the market as their mission, they were able to emphasize instead what they were for. The success of that rebranding has led to many of the problems we now grapple with today.
A New Political Dawn?
In the same way, commons-based thinking could eventually shift the balance of politics in the United States and the world. Yet unlike market fundamentalism, the commons is not just old wine in new bottles; it marks a substantive new dimension in political and social thinking.
A commons-based society holds considerable appeal for progressives after a long period in which the bulk of their political work has been in reaction to initiatives from the right. Activists across many social movements, now aware that an expansive political agenda will succeed better than narrow identity politics and single-issue crusades, are starting to experiment with the language and ideas of the commons. This line of thinking also makes sense to some traditional conservatives who regret the wanton destruction of our social and environmental assets carried out in the name of a free-market revolution. In the truest sense of the word, the commons is a conservative as well as progressive virtue because it aims to conserve and nurture all those things necessary for sustaining a healthy society.
Growing numbers of citizens—including many who never before questioned the status quo—now seem willing to explore new ideas that once would have seemed radical. Millions of Americans are now making shifts in their personal lives such as buying organic foods, using alternative medicine, collaborating online, and searching for something beyond consumerism that offers a sense of meaning in their lives. They may not yet be sprinkling their conversations with the word commons, but they are looking for changes in their lives.
Now is the time to introduce a decisive shift in worldview. People everywhere are yearning for a world that is safer, saner, more sustainable and satisfying. There’s a rising sense of possibility that even with our daunting economic and environmental problems, there are opportunities to make some fundamental improvements. Everyone deserves decent health care. The health of the planet should take precedence over the profits of a few. Clean water, adequate food, education, access to information, and economic opportunity ought to be available to all people. In other words, a commons-based society. Let’s transform that hope into constructive action.
by Robert Reich
The President will have to devote a big part of his speech to the economy, but which economy? Corporate profits are up but jobs and wages remain in the doldrums. People with lots of financial assets, or who are deemed “talent” by large corporations, are enjoying a solid recovery. But most Americans continue to struggle.
In order for the public to understand what must be done, the President has to be clear about what has happened and why. Corporations are profiting from sales of their foreign operations, especially in China and India. Here at home, they’re catering to rich Americans. But an important key to their profits is their reduced costs, especially payrolls. The result has been fewer jobs and lower pay.
The Great Recession accelerated trends starting three decades ago — outsourcing abroad, automating work, converting full-time jobs to temps and contracts, undermining unions, and getting wage and benefit concessions from remaining workers. The Internet and software have made all this easier.
He should point out that the U.S. economy is now twice as large as it was in 1980 but the real median wage has barely budged. Most of the benefits of economic growth have gone to the top. In the late 1970s, the richest 1 percent of Americans got about 9 percent of total income. By the start of the Great Recession they received more than 23 percent. Wealth is even more concentrated.
This is the heart of our problem. Most Americans no longer have the purchasing power to get the economy moving again. Once the debt bubble burst, they were stranded.
The President should make it clear corporations aren’t to blame. After all, they’re designed to make profits. Nor is it the fault of the rich who have played by the rules. The problem is the rules need fixing. He should stress that a future with no jobs or lousy jobs for most Americans is not sustainable - not even for American corporations, whose long-term profitability depends on the revival of broad-based domestic demand. (Watch out for the upcoming “correction.”)
The solution is to give average Americans a better economic deal.
For starters, he should propose to expand the Earned Income Tax Credit (essentially, a wage subsidy) all the way up through the middle class. And he should make the tax system more progressive: The rate on the first $50,000 to $90,000 of income should be cut to 10 percent; the next $90,000 to $150,000, 20 percent; and the next $150,000 to $250,000, 30 percent. Make up the revenue by increasing taxes on the next $250,000 to $500,000, to 40 percent; from $500,000 to $5 million, to 50 percent; and anything over $5 million, 60 percent. Tax capital gains the same as ordinary income.
In addition, he should call for strengthening unions by increasing penalties on employers who illegally deter them.
He will have to call for reducing the long-term budget deficit, but must make sure to distinguish between public investments that build future productivity (education, infrastructure, and basic R&D) and expenditures that improve our lives or keep us safe today. The former — essentially the nation’s “capital expenditures” — shouldn’t be cut at all. Indeed, they should be substantially increased. A “capital budget” separate from the regular federal budget would help draw this fundamental distinction.
Finally, he should recommend that Congress make college affordable by allowing federal loans to be repaid as 10 percent of earnings for the first 10 years of full-time employment.
Importantly, he should make it clear this isn’t redistribution. These measures would be good for everyone. Rich Americans will do better with smaller share of a rapidly-growing economy than a large share of one that remains in a deep hole.
by Robert Reich
Whenever you hear a business executive or politician use the term “American competitiveness,” watch your wallet. Few terms in public discourse have gone so directly from obscurity to meaninglessness without any intervening period of coherence.
President Obama just appointed Jeffry Immelt, GE’s CEO, to head his outside panel of economic advisors, replacing Paul Volcker. According to White House spokesman Robert Gibbs, Immelt has “agreed to work thorugh what makes our country more competitive.”
In an opinion piece in the Washington Post announcing his acceptance, Immelt wrote “there is nothing inevitable about America’s declining manufacturing competitiveness if we work together to reverse it.”
But what’s American “competitiveness” and how do you measure it? Here are some different definitions:
— It’s American exports. Okay, but the easiest way for American companies to increase their exports from the US is for their American-made products to become cheaper internationally. And for them to reduce the price of their American-made stuff they have to cut their costs of production in here. Their biggest cost is their payrolls. So it follows that the simplest way for them to become more “competitive” is to cut their payrolls — either by substituting software and automated machinery for their US workers, or getting (or forcing) their US workers to accept wage and benefit cuts.
— It’s net exports. Another way to think about American “competitiveness” is the balance of trade — how much we import from abroad versus how much they import from us. The easiest and most direct way to improve the trade balance is to coax the value of the dollar down relative to foreign currencies (the Fed’s current strategy for flooding the economy with money could have this effect). The result is everything we make becomes cheaper to the rest of the world. But even if other nations were willing to let this happen (doubtful; we’d probably have a currency war instead as they tried to coax down the value of their currencies in response), we’d pay a high price. Everything the rest of the world makes would become more expensive for us.
— It’s the profits of American-based companies. In case you haven’t noticed, the profits of American corporations are soaring. That’s largely because sales from their foreign-based operations are booming (especially in China, Brazil, and India). It’s also because they’ve cut their costs of production in the US (see the first item above). American-based companies have become global — making and selling all over the world — so their profitability has little or nothing to do with the number and quality of jobs here in the US. In fact, it may be inversely related.
— It’s the number and quality of American jobs. This is my preferred definition, but on this measure we’re doing terribly badly. Most Americans are imprisoned in a terrible tradeoff — they can get a job, but only one that pays considerably less than the one they used to have, or they can face unemployment or insecure contract work. The only sure way to improve the quality of jobs over the long term is to build the productivity of American workers and the US overall, which means major investments in education, infrastructure, and basic R&D. But it’s far from clear American corporations and their executives will pay the taxes needed to make these investments. And the only sure way to improve the number of jobs is to give the vast middle and working classes of America sufficient purchasing power to get the economy going again. But here again, it’s far from clear American corporations and their executives will be willing to push for a more progressive tax code, along with wage subsidies, that would put more money into average workers’ pockets.
It’s politically important for President Obama, as for any president, to be available to American business, and to avoid the moniker of beiing “anti-business.” But the President must not be seduced into believing — and must not allow the public to be similarly seduced into thinking — that the well-being of American business is synonymous with the well-being of Americans.
President Obama is waxing ebullient on the jobs front. He's partnered up with GE CEO Jeffrey Immelt, and they are both proclaiming that the US will again be a robust manufacturing and exporting nation. They have rejected the model for the US as a mainly consuming and service oriented nation. That's all to the good. But Obama seems to have placed too much faith in the corporate CEOs. He seems to think they're going to stop outsourcing, and, out of the goodness of their hearts, they're going to start creating jobs here at home. But the official US government still has in place laws and policies - and in particular tax policies - that actually encourage outsourcing. Nancy Pelosi, when the Democrats controlled the House, said after passing a bill which would have reined in outsourcing: "In this legislation, which is job creating, it closes the loophole which has allowed businesses to ship jobs overseas. Can you believe that we have a tax policy that enables outsourcing? So if you have one thing to say about this bill to your constituents, you can say that today, you voted to close the loophole to ship U.S. jobs overseas and giving businesses a tax break to do so. It is not right. It will be corrected today.” This was in May, 2010. Of course, this bill never made it into law because it was filibustered by Republicans in the Senate. Sorry, Nancy.
Closing the loophole that has allowed businesses to ship jobs overseas? Well, sorry to say that loophole was never closed! President Obama though wants us to believe that, regardless of that loophole being closed, CEOs like Jeffrey Immelt are going to be nice guys and create local manufacturing jobs here in the US even though it is going to lower their profit margins, even though the loopholes for shipping jobs overseas are still open! Is he being naive? And then there is this from Robert Reich:
General Electric and other companies are signing up for deals with China involving energy and aviation manufacturing. But much of this will be done in China. GE’s joint venture with Aviation Industries of China, to develop new integrated avionics systems (which presumably will find their way into Boeing planes) will be based in Shanghai.
Will the real GE please stand up? Corporations are required by law to maximize their profits. This means that they will lower their expenses by getting the cheapest labor wherever they can get it. And American labor is relatively expensive compared to Chinese labor. So Obama is skating on thin ice. His bravado overlooks the underpinnings of law that give American corporations huge incentives for creating jobs overseas and outsourcing American jobs. Sure, GE wants to sell to the Chinese. But this doesn't mean that those products will be exported from the US. In the last ten years 42,000 American factories have closed. Millions of jobs have been lost. And now Mr. Nice Guy, Jeffrey Immelt of GE, is going to forego maximizing profits and his salary and his duty to shareholders in order to do a favor for President Obama and create some jobs in the US? What game is he playing? Mr. President, where are the legal underpinnings that would make sure that this will happen? You have a Congress that won't even close loopholes that would encourage job creation in the US. Do you have the feeling you're teetering on the brink? You said you've moved us back from the abyss. But have you? The abyss still looms because now for sure with a Republican controlled House, no loopholes that encourage and enable outsourcing will ever be closed unless and until Democrats control both Houses and the filibuster rules have been changed. Mr. President, you are whistling Dixie, in the dark, and past the graveyard too!
As President Obama touts the jobs being created at GE's Schenectady plant we have this dated January 14, 2011: "Solar Panel Maker Moves Jobs to China":
BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.
But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.
It looks like the right hand doesn't know what the left hand's doing. It seems like not only does China have cheaper labor, but they have more government support for American companies that want to build plants and create jobs there! The US on the other hand has no industrial policy, no set of incentives in order to have companies, domestic or foreign, build more plants in the US. And there are no unions to speak of that would fight for the rights of American workers. America, for all intents and purposes, has been deunionized starting with Reagan's firing of the air traffic controllers which effectively put their PATCO union out of business.
In "19 Facts About The Deindustrialization Of America That Will Make You Weep", Michael Snyder says:
The United States is rapidly becoming the very first "post-industrial" nation on the globe. All great economic empires eventually become fat and lazy and squander the great wealth that their forefathers have left them, but the pace at which America is accomplishing this is absolutely amazing. It was America that was at the forefront of the industrial revolution.
It was America that showed the world how to mass produce everything from automobiles to televisions to airplanes. It was the great American manufacturing base that crushed Germany and Japan in World War II. But now we are witnessing the deindustrialization of America. Tens of thousands of factories have left the United States in the past decade alone. Millions upon millions of manufacturing jobs have been lost in the same time period.The United States has become a nation that consumes everything in sight and yet produces increasingly little. Do you know what our biggest export is today?
Waste paper. Yes, trash is the number one thing that we ship out to the rest of the world as we voraciously blow our money on whatever the rest of the world wants to sell to us. The United States has become bloated and spoiled, and our economy is now just a shadow of what it once was. Once upon a time America could literally outproduce the rest of the world combined. Today that is no longer true, but Americans sure do consume more than anyone else in the world. If the deindustrialization of America continues at this current pace, what possible kind of a future are we going to be leaving to our children?
The US is embarked on its own destruction thanks to the "small government" mantra of the Republican controlled Congress. Small government means no industrial policy except by lobbyists seeking special favors for their particular corporate sponsors. It means that US government policy will favor US business but not necessarily US workers. Unless and until the US can adopt policies which favor job creation in the US, US workers will be left out in the cold. And President Obama's soaring rhetoric about cooperation with CEOs like Jeffrey Immelt will be just that: rhetoric.
Posted by John on January 22, 2011 at 10:03 AM in John Lawrence, China, Consumerism, Corporations, Deregulation, Education, Careers, Jobs, Employment, Free Trade, Labor, Manufacturing, Obama Presidency, Outsourcing, Solar, The American Dream, The Economy, The Middle Class, The Role of Government, Trade, Unemployment | Permalink | Comments (0) | TrackBack (0)
By Jeffrey R. Immelt, CEO of GE
from the Washington Post, Friday, January 21, 2011; 12:01 AM
President Obama has asked me to chair his new President's Council on Jobs and Competitiveness. I have served for the past two years on the President's Economic Recovery Advisory Board, and I look forward to leading the next phase of this effort as we transition from recovery to long-term growth. The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world.
Business leaders should provide expertise in service of our country. My predecessors at GE have done so, as have leaders of many other great American companies. There is always a healthy tension between the public and private sectors. However, we all share a responsibility to drive national competitiveness, particularly during economic unrest. This is one of those times.
My hope is that the council will be a sounding board for ideas and a catalyst for action on jobs and competitiveness. It will include small and large businesses, labor, economists and government. Areas that we will focus on include:
l Manufacturing and exports: We need a coordinated commitment among business, labor and government to expand our manufacturing base and increase exports. The assumption made by many that the United States could transition from a technology-based, export-oriented economic powerhouse to a services-led, consumption-based economy without any serious loss of jobs, prosperity or prestige was fundamentally wrong. But there is nothing inevitable about America's declining manufacturing competitiveness if we work together to reverse it. For example, we have returned many GE appliance manufacturing jobs to the States by collaborating with our unions and making our operations more efficient.
Working with Boeing CEO Jim McNerney, who leads the President's Export Council, the Council on Jobs and Competitiveness will look for ways to harness the power of international markets - home to more than 95 percent of the world's consumers. Currently, the United States ranks lowest among the world's largest manufacturing nations in the ratio of domestically produced goods sold overseas, or export intensity. We must set as our highest economic priority not just increasing our exports, as the president has pledged, but also making the United States the world's leading exporter in the 21st century.
l Free trade: America cannot expand its manufacturing base without greatly increasing the volume of goods it sells overseas. That is why I applaud the free-trade agreement recently concluded between the United States and South Korea, which will eliminate barriers to U.S. exports and support export-oriented jobs. We should seek to conclude trade and investment agreements with other fast-growing markets and modernize our systems for export finance and trade control. Those who advocate increasing domestic manufacturing jobs by erecting trade barriers have it exactly wrong.
l Innovation: Businesses should invest more of their cash and resources in advanced products and technologies that will create jobs in the United States, and government should incentivize this investment in innovation. Today, GE is investing more than ever in research and development - about 6 percent of revenue - aimed at solving challenges in transportation, energy and health care. As one of America's largest exporters, GE remains committed to producing more products in the United States, which is our home and largest market. In the past two years, GE has created about 6,000 manufacturing jobs in the States, many resulting from investments in innovations such as advanced batteries, which we will make at our 100-year-old plant in Schenectady, N.Y.
GE sells more than 96 percent of its products to the private sector, where America's future must be built. But government can help business invest in our shared future. A sound and competitive tax system and a partnership between business and government on education and innovation in areas where America can lead, such as clean energy, are essential to sustainable growth.
It is possible to be a competitive global enterprise and still care about your home. In fact, it is not just possible but imperative. There is no easy solution to "fix" the American economy. Persistent and high unemployment - and the pessimism it breeds - should not be accepted. We must work together to construct an economy that creates more opportunity for more people.
The writer is chairman and chief executive of General Electric.
Posted on Jan 18, 2011, from truthdig
By Amy Goodman
The Glock 19 semiautomatic pistol that Jared Loughner is accused of using in his rampage in Tucson, Ariz., is, according to Glock’s website, “ideal for versatile use through reduced dimensions” and is “suitable for concealed carry.” The site continues, “Compact and subcompact Glock pistol model magazines can be loaded with a convincing number of rounds,” from the standard 15 up to 33. The shooter was able to kill and wound to the extent that he did, with six dead and 13 injured, because he had a semiautomatic, concealed weapon, along with the “extended magazine.” He was attempting to reload the weapon with another extended magazine when a brave, unarmed woman knocked his next clip from his hand.
Jared Loughner confirmed Glock’s claim that 33 is a “convincing” number of rounds. Rep. Carolyn McCarthy, D-N.Y., doesn’t need convincing, though. Her husband, Dennis McCarthy, was gunned down on the Long Island Rail Road on Dec. 7, 1993, when Colin Ferguson pulled a semiautomatic pistol out of his bag and methodically made his way along the afternoon commuter train, randomly shooting passengers. He too killed six people and wounded 19, including McCarthy’s son, Kevin. Ferguson was tackled, as was Loughner, while reloading his weapon. In both cases, the act of reloading the gun created a pause in the shooting that allowed unarmed citizens to take action.
Carolyn McCarthy mourned the loss of her husband and nursed her critically injured son back to health. He had been shot in the head. Carolyn McCarthy then decided to go further, to try to heal the nation. She lobbied her Long Island member of Congress, Republican Daniel Frisa, to support the 1994 Federal Assault Weapons Ban. He refused. McCarthy had been a nurse for 30 years, and a lifelong Republican. Turning her anger into action, she switched to the Democratic Party, ran for Congress against Frisa and defeated him in 1996. She has been in Congress ever since, and is one of the staunchest supporters there of common sense gun laws.
The 1994 law prohibited a number of weapons outright, as well as extended-capacity magazines like Loughner used. The law expired in 2004 under President George W. Bush. In response to the Tucson shooting, McCarthy is introducing the Large Capacity Ammunition Feeding Devices Act. In a letter to other members of Congress seeking co-sponsors, she says the bill “will prohibit the transfer, importation, or possession of high-capacity magazines manufactured after the bill is enacted,” and, thus, “the increased difficulty in obtaining these devices will reduce their use and ultimately save lives.”
The ban on these bullet clips is a start. But ultimately, the guns themselves—semiautomatic weapons—are the personal weapons of mass destruction that are designed not to hunt animals, but to kill people. These guns need to be controlled. By controlling them, we will reduce violence not only in the United States, but across the border in Mexico as well.
In Ciudad Juarez, just 300 miles from Tucson, directly across the border from El Paso, Texas, Mexican officials say more than 3,100 people were killed in drug violence last year, the bloodiest year to date. In May 2010, President Felipe Calderon spoke before a joint session of the U.S. Congress and called for a reinstatement of the assault weapons ban. According to law enforcement officials, 90 percent of the guns picked up in Mexico from criminal activity are purchased in the United States.
Susana Chavez was a poet and activist in Ciudad Juarez. She popularized the phrase “Not one more dead.” She was buried last week in Mexico, just as the bodies of Tucson’s youngest victim, 9-year-old Christina Greene, and federal Judge John Roll were being prepared for burial in Arizona. A month earlier, anti-violence campaigner Marisela Escobedo Ortiz was shot in the head while maintaining a vigil to demand that the government take action in pursuit of the killers of her 17-year-old daughter, Rubi Frayre Escobedo.
The U.S. group Mayors Against Illegal Guns has just released the results of a bipartisan survey, which found that 86 percent of Americans and 81 percent of gun owners support background checks on all gun sales. The group maintains a website, Close the Loophole.org. Gun shows, the ready access to semiautomatic weapons and the additional availability of extended-capacity magazines are a recipe for the massacres that occur every few years in the U.S., and every few weeks in Mexico.
In the wake of the Tucson shooting, amidst calls for bipartisanship and civility, now is the time for Democrats and Republicans to join together to pass a permanent ban on assault weapons, and make us all safer.
Denis Moynihan contributed research to this column.
Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 800 stations in North America. She is the author of “Breaking the Sound Barrier,” recently released in paperback and now a New York Times best-seller.
© 2011 Amy Goodman
by Richard Wolff
So, now we know about the $15bn-plus 2010 pay package for Goldman Sachs partners and employees. The top rungs will get their many millions each, with lesser and lesser amounts going down the GS hierarchy. The mass of its more than 35,000 employees will, as usual, get much, much less than the top. In addition, the appreciation of Goldman's share prices likewise adds billions to employees who got stock options, which were likewise distributed very unequally throughout the firm. The unequal division of rewards within Goldman Sachs mirrors and mocks the far larger social divide it feeds.
While vast wealth flows for the tops of finance, austerity is the watchword across the United States. Every one of the 50 state governments and nearly all of the thousands of city and town governments are sharply reducing their citizens' economic wellbeing. Their debates concern the mix of raised taxes and reduced public payrolls and services to impose on a citizenry already reeling from the continuing economic crisis conditions: high unemployment, home foreclosures, job insecurities and benefit reductions.
US capitalism continues to dole out wealth for a few and austerity for the mass. Economic and social divisions helped bring on the crisis. Wage stagnation since the 1970s had enabled profits to boom, but it also provoked family debts and financial speculation that spiraled to the far side of sustainability. As the crisis deepened, rising unemployment turned wage stagnation into wage and job benefits declines. Home-ownership for millions deteriorated into a mass of empty homes confronting stunned ex-homeowners. Economic and social divisions deepened and hardened.
Now, in the next act of an accumulating social tragedy, the governments' responses – austerity – drive yet another degree of separation between the 10 % at the top of the nation's corporate pyramid, and of its income and wealth distributions, and everyone else.
Just like speculation in credit default swaps and "jumbo" mortgages for people without jumbo incomes, deepening economic divisions will prove unsustainable. Clearly, Goldman Sachs, JP Morgan Chase, and the other financial giants either do not see or do not care about that deepening. In any case, they take no responsibility for producing or preventing or offsetting it.
Meanwhile, deprived of all but a few, weak organisations to articulate a clear, critical analysis of what is happening, the mass of US citizens watch, demoralised, and fume. Millions of former supporters turn away from a president as his promises of "hope and change" fade from memory or become objects of bitter humour. The space is cleared for the Tea Party movement to displace anger over deepening economic divisions as epitomised in big banks' pay packages onto politicians in general and Democrats in particular. Offering only another variant of austerity, the Republicans guarantee that they, too, take no responsibility to change the basic direction of this society's trajectory. Economic and social divisions will keep deepening.
The new governor of California announced last week that he proposed to cut about $1.5bn from the largest and arguably the best state system of higher education in the country. Such a cut will further damage the quantity and quality of the skilled and hi-tech workforce on which the nation's economic future depends. Governor Brown also proposed over $1bn in cuts to the Medicare program providing healthcare to hundreds of thousands of California's poorest residents.
Meanwhile, Goldman Sachs pays out $15bn, alongside the other big banks' comparable payouts. More than yet another glaring contribution to social division, these contrasts represent stages on the path to self-destructive social implosion.© 2011 Guardian News and Media
by Paul Buchheit
If you make less than $114,000 a year (90% of us), you've been financially damaged by the flow of income to the richest 1% of Americans over the past 30 years. Based on Internal Revenue Service figures, if middle- and upper-middle class families had maintained the same share of American productivity that they held in 1980, they would be making an average of $12,500 more per year.
If you make less than $160,000 a year (95% of us), your household value has decreased, percentage-wise, over the last 25 years. According to noted researcher Edward Wolff, only the top 5% of American families increased their percentage of the country's total household net worth from 1983 to 2007.
U.S. GDP has quintupled since 1980, and we all contributed to that success. It's not unreasonable to say that upper-middle class families should have maintained the same size of their slice of pie.
But if earnings since 1980 were based on this measure of productiveness, the richest 1% of Americans would be making $1 trillion less per year.
A trillion dollars a year. That's more than we spend on the entire military.
A trillion dollars a year. That's seven times more than the budget deficits of all 50 states combined. Many states have been forced to cut police forces and teachers to balance their budgets.
A trillion dollars a year. Yet Congress just voted to continue the Bush tax cuts.
The richest 1% ($400,000 or more) didn't work harder than the rest of us. They profited from stock market gains, shrewdly designed financial instruments, and tax cuts.
The very wealthy insist that all their income will stimulate the economy. But low-income earners spend a greater percentage of their overall income on consumption, while high-income earners save more. Middle-class America has been led to believe that the growth at the top will eventually produce more jobs. But many of us have college-educated sons and daughters who can't find suitable employment. Fortune Magazine reported that the 500 largest U.S. companies cut a record 821,000 jobs in 2009 while their collective profits increased to a record $391 billion.
Even the upper class should be concerned about this. As inequality increases, the majority of Americans will consume less, leading to conditions not unlike the years before the Great Depression, when the working class was unable to buy the goods they produced. The rich, with extra money, speculate in risky investments. The majority of middle-class Americans, with little money, go deeper into debt. The result is an unstable economy for all of us.
Who are the people making up the richest 1%? Bankers, CEOs, upper management, university presidents, Congressmen. They live in their own world, supporting each other's needs. They can no longer relate to the needs of average Americans.
Taxing them is not "soaking the rich." The greatest redistribution of income in history has taken place over the last 30 years, and the victims are beginning to make a fuss about it.
Paul Buchheit is a faculty member in the School for New Learning at DePaul University.
It is well known that members of Congress have the best of gold plated health care policies bought and paid for by you, the American taxpayer. We're paying for the privilege of having the GOP controlled House piss around with repealing health care for the people that pay for theirs. How arrogant of them! Please get this government burden off our backs - the burden of paying for health care for the politicians who are trying to repeal our health care. If they were'nt such hypocrites, they would repeal their government provided health care first. I'm sick and tired of paying for health care for politicians who want to deny the American public protection from having their policies terminated if they should have the audacity to get sick.
The following is from an article subtitled, "Politicians Receive the Country's Best Care - at Taxpayer Expense."
Few would deny that a health care crisis looms large in the U.S. In a country with millions of uninsured and underinsured citizens, health care has become more a privilege than a right. Indeed, the United States remains the only industrialized country in the world that doesn’t guarantee health care to all its citizens.
But this isn’t the case for members of the U.S. Congress. Representatives and Senators alike receive some of the best health care benefits in the country, much of it paid for with taxpayer dollars. Yet these same members seem unable - or unwilling - to extend similar protections to the rest of America.
Federal Employees Health Benefits Program
As soon as members of Congress are sworn in, they may participate in the Federal Employees Health Benefits Program (FEHBP). The program offers an assortment of health plans from which to choose, including fee-for-service, point-of-service, and health maintenance organizations (HMOs). In addition, Congress members can also insure their spouses and their dependents.
Not only does Congress get to choose from a wide range of plans, but there’s no waiting period. Unlike many Americans who must struggle against precondition clauses or are even denied coverage because of those preconditions, Senators and Representatives are covered no matter what - effective immediately.
And here’s the best part. The government pays up to 75 percent of the premium. That government, of course, is funded by taxpayers, the same taxpayers who often cannot afford health care themselves.
More Health Care Perks for Congress
And the Congressional perks don’t stop with the FEHBP. According to the article “Health care as good as Congress gets,” by John Barry, a staff writer for the St. Petersburg Times, “Members of Congress have their own pharmacy, right in the Capitol. They also have a team of doctors, technicians and nurses standing by in case something busts in a filibuster. They can get a physical exam, an X-ray or an electrocardiogram, without leaving work.”
The GOP Yahoos in addition to receiving their government subsidized health care are wasting taxpayer money by voting to repeal Obamacare. They know they can't really do it because the Democrats control the Senate so it won't pass muster with the Senate. Yet the GOP controlled House is wasting time and taxpayer money making a big deal over repealing it instead of spending their time getting some work done which might actually benefit the American people. They're the ones who always talk as if they are doing what the "American people" want when in reality they are doing the bidding of the corporations - in this case the health insurance corporations. They are nothing more than corporate shills, yet they are always talking about the American people. Well, what this American person wants is for them to repeal their own taxpayer funded, gold plated health care. If it's good enough for the gander, it's good enough for the goose. Then let them buy insurance on the private market. If they happen to get sick, tough. They will be kicked off their policy; their medical bills will mount up. Why they just might lose their home and have to declare bankruptcy. If it's good enough for the American people, it's good enough for them.
I'm for making government smaller by eliminating government subsidized health care for members of Congress. With the money saved we can properly fund Medicaid. These Congressmen are mostly millionaires anyway. Surely, they can afford to buy health insurance on the private market. But they are such hypocrites. They want to deny any kind of government aid to poor people while they appropriate as many government resources as they possibly can for themselves and their cronies. And I am talking here mainly about Republicans. The Democrats for the most part are responsible for passing Obamacare which will provide protections for the American people like preventing health insurance companies from discriminating against them based on preexisting conditions. So this is not a rant against "government"; it's a rant against Republican controlled government which is wholly subservient to corporate lobbyists.
I'm happy to see that the House GOP's big publicity stunt - the repeal of Obamacare - is going nowhere as Democrats point out all the good things in Obamacare like ending the doughnut hole for seniors, ending policy termination due to preexisting conditions, ending rescission which is when you get kicked off your policy after you get sick, letting young adults remain on their parents' policies until they're 26 etc. More and more people are starting to realize and appreciate the profound benefits of Obamacare, and President Obama's approval rating is getting steadily higher with each passing day.
Not so the hapless Republicans who don't have a plan for replacing Obamacare. Now if they just would have said "let's make Obamacare better" instead of trashing it lock, stock and barrel. Wouldn't that have been the sensible thing to do? Let's make it better. Admittedly, it's not perfect. More cost containment is needed. If the Republicans were sincere and serious, they would have taken that attitude: let's make the weak parts of it stronger. The Democrats would have gladly partnered with them in a cooperative effort. Oh wait - the reason it's not better is that Republicans did everything they possibly could to weaken it in the first place. Their approach is wholly destructive when, if they truly cared about the American people - and not the corporations that provide campaign funds for the politicians - they woud have taken a more constructive approach in the first place.
Editor: This contribution by Rocky Neptun is a continuation of the debate about a new football stadium in downtown San Diego, begun by Andy Cohen here.
When I began my property maintenance business a few decades ago, I used 80 percent of my assets and borrowed an amount equivalent to another 50 percent. At that time, or even now, there was never a consideration that you, as a taxpayer, should finance my business venture.
Yet, Alexander Spanos, worth over one and half billion dollars, according to Forbes Magazine, wants you and me to subsidize his new football stadium in the East Village, downtown San Diego. The entire notion of corporate welfare for his project and the millionaire fat assed football players who smash and crash against one another chasing a stupid looking ball, would bring laughs in any enlightened social order. Yet, in our society, where single-mothers, without work or funds, are harangued and fingerprinted, treated like criminals for asking for a helping hand, the Mayor of San Diego, the city’s main major newspaper and other bought shrills would have us spend $800 million on an oversized playpen for aging adolescents who just can’t seem to get it up for cable television or internet broadcasts of this tedious brawling, called football.
This titan of sports events would have you believe that his million dollar profit each night will bring jobs and prosperity to the region. Shades of a roman emperor, he would give us bread and circuses. Like any con artist, sovereign or not, with the precise skill of a pickpocket , the secret is to let your victim think that everything is normal, that this is the way things are done. If one’s prey is a large group of people, then, in Orwellian fashion, all the gears and levers of the corporate state, its media, politicians, advertisers, snake oil salesmen, must be put into motion to dupe the citizens into believing the lie. From weapons of mass destruction to the financial benefits of a football stadium, the process of propaganda and untruth is the same; begin with a false premise, repeat it over and over, spend a few million plastering the message on walls and between segments of Oprah Winfrey, narrow the parameters of the debate by a bought media and its cowed journalists.
Right up front, one thing must be made perfectly clear – there has never been a sports stadium which has made money using taxpayer dollars – except Miller Park Stadium in Milwaukee which is not only a multi-use facility of football and baseball, but its Green Bay Packers football team is a community owned franchise, with all profit being returned to the neighborhoods.
Football is all about money, lots of money for owners and the players. Those who cling to this wealth, like barnacles on a whale, or those who feel their macho manhood (and, increasingly, macha womanhood) is tied into a symbiotic relationship with a home team, will try to tell you that stadiums bring jobs and spending to the community.
“Wealthy sports moguls have turned bilking taxpayers into an art form,” Doug Bandow, conservative senior fellow at the Cato Institute and former assistant to President Ronald Reagan, reminds us. “Franchise owners typically win taxpayer support only through threats; pay us off, or we will leave they say, give us a new stadium, or we will go someplace else.”
“Government stadiums benefit economic and political elites,” Bandow reports. He cites a study done by two economists, Robert Baade of Lake Forest college and Allen Sanderson of the University of Chicago, who looked at 10 metropolitan areas which built stadiums and found “no net employment increase.” The study pointed out that, except for the initial construction jobs, most of which were specialists brought in from other parts of the country, the remaining jobs were low-wage, mostly part-time and lacked benefits.
Also, in terms of stadium advocacy about boosts to the local economy through new revenue “which will offset the taxes used to subsidize the new stadium,” they found that no new out-of-town attendees are attracted by a new stadium with more than 90 percent of ticket buyers local residents and that sports spending primarily substitutes for other outlays.
“Most people have entertainment budgets, and the $100 they spend taking the family to the ballgame is $100 that they don’t spend on movies or bowling later in the month,” the report said, “but nobody seriously thinks that we should raise taxes or spend millions on bowling alley or movie theatre subsidies.” This is called the substitution effect which smashes the economic multiplier effect claimed by most stadium proponents.
Conservative Bandow blasts socialism for billionaire sports moguls, like Spanos, saying:
“stadiums don’t constitute a great unmet social need, sports should be a private enterprise, privately funded.” Suggesting a far greater pull for suburban residents, he called for a string of public restaurants or “if the goal is trickle-down consumer spending and business development, why not build a new automobile factory, retail outlet, grocery store or software facility to attract and maintain companies, jobs and economic growth?”
The real reason that Spanos wants a new football stadium is not community stature or more jobs or an economic benefit for you and me, it’s because he wants more elegant skyboxes than Qualcomm has. These imperial balconies can rent for as much as $250,000 a year and, better yet, for Spanos, unlike entrance fees, he doesn’t have to be split skybox income with the National Football League.
Also, like Wal-Mart and other low-wage exploiters, who get the public to subsidize the working poor with food stamps, health care and other essential needs, public dollars underwriting stadiums help Spanos absorb the inflated payroll of millionaire football players. The city of San Diego already loses $17 million a year subsidizing Qualcomm Stadium, does anyone really think that will change with a much more expensive location, not only in terms of land costs but in day-to-day traffic delays and police outlays.
Then there are the additional unseen costs of subsidizing a billionaire’s expanding fortune. There is the obvious fact that bond money spent on a new stadium could go for much more vital infrastructure needs which serve the greater citizenry, like aging sewer lines which spew into city streets and the ocean, streets, libraries, parks, or affordable housing. Just one year after Minneapolis’ Minnesota Twins got a new stadium in 2007, the city’s I-35 bridge collapsed, killing 13 people and injuring over a hundred, because repairs were delayed for lack of funds.
There is also the issue of using tax-exempt bonds to finance private ventures, like stadiums. Not only will San Diego pay a much higher rate on the municipal bond loan because of its structural deficit and bad credit rating, but because of the tax exemption on the bond the state of California and the Federal Government, reeling from the economic downtown, will lose millions in tax revenue from the Spanos family which will have to be made-up by either increased taxes or the loss of essential government services.
For every $100 million in tax exempt bonds issued, the Federal government loses $21 million in tax revenue, so, tax payers – you and me – would have to help make up the $100 million or so loss during the life of the bond. So San Diegans will get a double-whammy, while Alexander Spanos sings his way to the bank.
Now for almost a decade the Chargers have said they would build a new stadium without public money, yet recently they have said they cannot do it without corporate welfare. Why the change, especially in the middle of a recession? Could it be that it took that long for their people to be embedded in the redevelopment agency, CCDC, and city staff? Why did Mayor Sanders, who as a campaign promise, said no city money would be used for a stadium, suddenly do an about face and now parrots the notion? Could there be a consulting position in the works? Why has CCDC spent close to $200,000 and the San Diego City Council another $500,000 of public money to study how to finance the construction when Spanos should have paid for these studies? Are there bribes, kick-backs and/or campaign contributions in the mix? And how many millions will Spanos spend on distortions and lies in the upcoming referendum over the stadium?
“Corporate welfare is always unsavory business,” Raymond J. Keating, chief economist for the Small Business Survival Committee says, “the politically connected and high profile gain at the expense of small business owners and consumers who work hard day to day but have no friends in high places, decision making is shifted from the private sector, which is guided by price and profit signals to meet and create consumer demand, to the public sector, which is guided by politics and the quest for power, taxes are increased on the many, so that resources can be funneled to a select few – in the case of subsidized ballparks, billionaire team owners and multi-millionaire team players.”
In his book, The Baseball Economist: The Real Game Exposed, J.C.Bradbury documents that there is absolutely no public economic development benefit to new stadiums. While Michael W. Lynch of the Conservative blog, Reason.com, bluntly tells it like it is:
“publicly funded sports stadiums are like crack cocaine to local politicians and business bigwigs,” he writes, “these folks are just like addicts, they deceive everyone around them for the sake of a fix, they resort to public theft to pay for their fix, forcing citizens who couldn’t care less about sports to subsidize teams.”
Rocky Neptun, who has never lasted through a full football or baseball game in his long life, is a soccer fan. He is the volunteer director of the San Diego Renters Union (www.SanDiegoRentersUnion.org)
But it's worth drilling down on the third biggest item on the list -- weighing in at $16.1 billion -- the "Repealing Medicaid FMAP increase," because I can't think of anything that better demonstrates the priorities of the current Republican Party.
Medicaid is the government's primary social insurance program targeted at poor and disabled Americans. Medicaid is responsible, for example, for such things as nursing home care for the indigent. It is jointly funded by the states and the federal government --it is, in fact, one of the biggest items in most state budgets.
When the recession hit, two things happened almost immediately at the state level: tax revenue plummeted, and applications for Medicaid coverage boomed. The two phenomena were intimately related, of course. People who lost their jobs and homes as a result of a cratering economy also lost their healthcare.
Let me repeat that, because it's important -- a major consequence of the recession was a surge in poverty-stricken Americans seeking government-funded healthcare. State budgets got crushed. The Obama administration moved quickly to address the problem, authorizing a big increase in Medicaid funding to the states via the American Reinvestment and Recovery Act (the stimulus bill). This is what is referred to by the acronym FMAP -- Federal Medical Assistance Percentage. It's not stimulus in the sense that a big infrastructure project is stimulus, but it undoubtedly saved some jobs by preventing public sector layoffs by state governments that would not otherwise have been able to balance their budgets. And, naturally, the pain and suffering of the American people would have been much worse without the federal help. One of the reasons why the Great Recession was not a Great Depression is precisely because of the existence of programs like Medicaid.
The stimulus FMAP boost was temporary -- designed to run out at the end of 2010. In August 2010, after a big political fight, the Senate and the House passed a $15 billion extension that will run through June 2011. So in one sense, the Republican spending cut pledge is entirely illusory -- the FMAP increase is already scheduled to end this year.
Whether it should end this year is another question. Some people might imagine that such decisions should be related to how well the U.S. economy is performing, and correspondingly, how many people need Medicaid coverage. If unemployment falls and Medicaid rolls stop expanding, or even start declining -- the program is means-tested, so if you find a job and start making money, you are no longer eligible -- the pressure on state budgets and the necessity for federal assistance should ease. If, on the other hand, Medicaid funding gets cut off before the economy fully recovers, and state budgets get hammered again, resulting in more public sector layoffs, there would, tragically, likely be increased applications for Medicaid help. Talk about your widening gyres!
I'm sure there are plenty of conservatives who want to get rid of Medicaid altogether. If poor old people can't pay for nursing home care then let them die in the street, like they used to. The Tea Party version of government apparently just doesn't believe in helping people who can't help themselves. For the modern Republican Party, it's far far more important to ensure that those who will never need Medicaid -- the richest 1 percent of Americans, the people who are already doing quite fine as their market portfolios swell -- get their big fat tax cuts, adding up to $700 billion over the next 10 years, than that the poorest Americans get another $15 billion a year so that they can die in a manner that befits a nation that dares considers itself civilized.
by Robert Reich
Highlighting today’s summit between Chinese President Hu Jintao and President Obama is China’s agreement to buy $45 billion of American exports. The President says this will create more American jobs. That’s not exactly right. It will create more profits for American companies but relatively few new jobs.
Nearly half of the deal is for two hundred Boeing aircraft whose parts come from all over the world. The rest involves agricultural commodities that don’t require much U.S. labor because American agribusiness is highly automated, and chemical and high-tech goods that are even less labor-intensive.
General Electric and other companies are signing up for deals with China involving energy and aviation manufacturing. But much of this will be done in China. GE’s joint venture with Aviation Industries of China, to develop new integrated avionics systems (which presumably will find their way into Boeing planes) will be based in Shanghai.
Here’s the real story. China has a national economic strategy designed to make it, and its people, the economic powerhouse of the future. They’re intent on learning as much as they can from us and then going beyond us (as they already are in solar and electric-battery technologies). They’re pouring money into basic research and education at all levels. In the last 12 years they’ve built twenty universities, each designed to be the equivalent of MIT.
Their goal is to make China Number one in power and prestige, and in high-wage jobs.
The United States doesn’t have a national economic strategy. Instead, we have global corporations that happen to be headquartered here. Their goal is to maximize profits, wherever they can make the most money. They’ll make things in America for export to China when that’s most profitable; they’ll make it in China and give the Chinese their know-how when that’s the best way to boost the bottom line. They’ll utilize research and development wherever around the world it will deliver the biggest bang for the dollar.
Meanwhile, Republicans and deficit hawks are cutting publicly-supported R&D. And cash-starved states are cutting K-12 education, and slashing the budgets of their great public research universities, such as the one I teach at.
And no hyped-up trade deals are going to change this fundamental imbalance.
Some say all we need to do is put our currencies in better balance. But even if the Chinese upped the value of the yuan and the US (courtesy of the Fed) reduced the value of the dollar – so everything they bought from us was cheaper and everything we bought from them, far more expensive – they’d still win. We’d have more jobs than now because our exports would be more attractive in world markets, but those jobs would summon fewer goods from around the world. In other words, we’d be poorer.
Let’s get real. We’re losing ground. The U.S. labor force is now smaller than it was before the Great Recession began and most American families are worse off. December’s unemployment rate dropped to 9.4 percent from 9.8 percent but almost half the improvement was due to 260,000 people dropping out of the labor force.
Average hourly wages grew by three cents in December; weekly wages, by $1.02. And almost all the gains in income occurred at the top. The major assets of rich Americans are financial – whose values have increased as corporate profits have grown. The major assets of the middle-class asset are their homes, whose values continue to drop.
The President now says the answer is to help American business. “We can’t succeed unless American businesses succeed,” he said recently. “And I’m going to do everything I can to promote their ability to grow and prosper.”
But the prosperity of America’s big businesses has become disconnected from the prosperity of most Americans.
Republicans say the answer is to reduce the size and scope of government. But without a government that’s focused on more and better jobs, we’re left with global corporations that don’t give a damn.
China is eating our lunch. Why? It has a national economic strategy designed to create more and better jobs. We have global corporations designed to make money for shareholders.© 2011 Robert Reich
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including The Work of Nations, Locked in the Cabinet, and his most recent book, Supercapitalism. His "Marketplace" commentaries can be found on publicradio.com and iTunes.
by Robert Reich
“Be careful of yourself,” I told Gabby last March, after the front glass door and a window at her Tucson congressional office were shattered. The attack came the same evening — Sunday, March 21 — she and other House Democrats voted for the health care law.
She laughed. “I’m tougher than nails. Nothing’s gonna stop me.”
This week House Republicans have scheduled a vote to repeal that same health care law. Unfortunately Gabby won’t be there to reaffirm her original vote. Ten days ago a bullet fired at close range passed through her skull.
Yet Gabby continues to be tougher than nails. Her condition was just downgraded from critical to serious. She’ll survive, and she’ll continue to represent the people of the 8th district of Arizona with her courage and conviction.
Nothing will stop her.
[Ed. Note: Wasn't her condition "upgraded" from critical to serious?]
By KEITH BRADSHER
Published: January 14, 2011 in the New York Times
BEIJING — Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.
But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.
The factory closing in Devens, Mass., which Evergreen announced earlier this week, has set off political recriminations and finger-pointing in Massachusetts. And it comes just as President Hu Jintao of China is scheduled for a state visit next week to Washington, where the agenda is likely to include tensions between the United States and China over trade and energy policy.
The Obama administration has been investigating whether China has violated the free trade rules of the World Trade Organization with its extensive subsidies to the manufacturers of solar panels and other clean energy products.
While a few types of government subsidies are permitted under international trade agreements, they are not supposed to give special advantages to exports — something that China’s critics accuse it of doing. The Chinese government has strongly denied that any of its clean energy policies have violated W.T.O. rules.
Although solar energy still accounts for only a tiny fraction of American power production, declining prices and concerns about global warming give solar power a prominent place in United States plans for a clean energy future — even if critics say the federal government is still not doing enough to foster its adoption.
Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun.
Evergreen, in announcing its move to China, was unusually candid about its motives. Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the Massachusetts factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years — including a drop of 10 percent during last year’s fourth quarter alone.
Chinese manufacturers, Mr. El-Hillow said in the statement, have been able to push prices down sharply because they receive considerable help from the Chinese government and state-owned banks, and because manufacturing costs are generally lower in China.
“While the United States and other Western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint,” he said.
Even though Evergreen opened its Devens plant, with all new equipment, only in 2008, it began talks with Chinese companies in early 2009. In September 2010, the company opened its factory in Wuhan, China, and will now rely on that operation.
An Evergreen spokesman said Mr. El-Hillow was not available to comment for this article.
Other solar panel manufacturers are also struggling in the United States. Solyndra, a Silicon Valley business, received a visit from President Obama in May and a $535 million federal loan guarantee, only to say in November that it was shutting one of its two American plants and would delay expansion of the other.
First Solar, an American company, is one of the world’s largest solar power vendors. But most of its products are made overseas.
Chinese solar panel manufacturers accounted for slightly over half the world’s production last year. Their share of the American market has grown nearly sixfold in the last two years, to 23 percent in 2010 and is still rising fast, according to GTM Research, a renewable energy market analysis firm in Cambridge, Mass.
In addition to solar energy, China just passed the United States as the world’s largest builder and installer of wind turbines.
The closing of the Evergreen factory has prompted finger-pointing in Massachusetts.
Ian A. Bowles, the former energy and environment chief for Gov. Deval L. Patrick, a Democrat who pushed for the solar panel factory to be located in Massachusetts, said the federal government had not helped the American industry enough or done enough to challenge Chinese government subsidies for its industry. Evergreen has received no federal money.
“The federal government has brought a knife to a gun fight,” Mr. Bowles said. “Its support is completely out of proportion to the support displayed by China — and even to that in Europe.”
Stephanie Mueller, the Energy Department press secretary, said the department was committed to supporting renewable energy. “Through our Loan Program Office we have offered conditional commitments for loan guarantees to 16 clean energy projects totaling nearly $16.5 billion,” she said. “We have finalized and closed half of those loan guarantees, and the program has ramped up significantly over the last year to move projects through the process quickly and efficiently while protecting taxpayer interests.”
Evergreen did not try to go through the long, costly process of obtaining a federal loan because of what it described last summer as signals from the department that its technology was too far along and not in need of research and development assistance. The Energy Department has a policy of not commenting on companies that do not apply.
Evergreen was selling solar panels made in Devens for $3.39 a watt at the end of 2008 and planned to cut its costs to $2 a watt by the end of last year — a target it met. But Evergreen found that by the end of the fourth quarter, it could fetch only $1.90 a watt for its Devens-made solar panels. Chinese manufacturers were selling them for as little as $1.60 a watt after reducing their costs to as little as $1.35 or less per watt.
Evergreen’s joint-venture factory in Wuhan occupies a long, warehouselike concrete building in an industrial park located in an inauspicious neighborhood. A local employee said the municipal police had used the site for mass executions into the 1980s.
When a reporter was given a rare tour inside the building just before it began mass production in September, the operation appeared as modern as any in the world. Row after row of highly automated equipment stretched toward the two-story-high ceiling in an immaculate, brightly lighted white hall. Chinese technicians closely watched the computer screens monitoring each step in the production processes.
In a telephone interview in August, Mr. El-Hillow said that he was desperate to avoid layoffs at the Devens factory. But he said Chinese state-owned banks and municipal governments were offering unbeatable assistance to Chinese solar panel companies.
Factory labor is cheap in China, where monthly wages average less than $300. That compares to a statewide average of more than $5,400 a month for Massachusetts factory workers. But labor is a tiny share of the cost of running a high-tech solar panel factory, Mr. El-Hillow said. China’s real advantage lies in the ability of solar panel companies to form partnerships with local governments and then obtain loans at very low interest rates from state-owned banks.
Evergreen, with help from its partners — the Wuhan municipal government and the Hubei provincial government — borrowed two-thirds of the cost of its Wuhan factory from two Chinese banks, at an interest rate that under certain conditions could go as low as 4.8 percent, Mr. El-Hillow said in August. Best of all, no principal payments or interest payments will be due until the end of the loan in 2015.
By contrast, a $21 million grant from Massachusetts covered 5 percent of the cost of the Devens factory, and the company had to borrow the rest from banks, Mr. El-Hillow said.
Banks in the United States were reluctant to provide the rest of the money even at double-digit interest rates, partly because of the financial crisis. “Therein lies the hidden advantage of being in China,” Mr. El-Hillow said.
Devens, as the site of a former military base, is a designated enterprise zone eligible for state financial support.
State Senator Jamie Eldridge, a Democrat whose district includes Devens, said he was initially excited for Evergreen to come to his district, but even before the announced loss of 800 jobs, he had come to oppose such large corporate assistance.
“I think there’s been a lot of hurt feelings over these subsidies to companies, while a lot of communities around the former base have not seen development money,” he said.
Michael McCarthy, a spokesman for Evergreen, said the company had already met 80 percent of the grant’s job creation target by employing up to 800 factory workers since 2008 and should owe little money to the state. Evergreen also retains about 100 research and administrative jobs in Massachusetts.
The company also received about $22 million in tax credits, and it will discuss those with Massachusetts, he said.
Evergreen has had two unique problems that made its Devens factory vulnerable to Chinese competition. It specializes in an unusual kind of wafer, making it hard to share research and development costs with other companies. And it was hurt when Lehman Brothers went bankrupt in 2008; Evergreen lost one-seventh of its outstanding shares in a complex transaction involving convertible notes. But many other Western solar power companies are also running into trouble, as competition from China coincides with uncertainty about the prices at which Western regulators will let solar farms sell electricity to national grids.
According to Bloomberg New Energy Finance, shares in solar companies fell an average of 26 percent last year. Evergreen’s stock, which traded above $100 in late 2007, closed Friday in New York at $3.03.
Tom Zeller Jr. in New York and Katie Zezima in Boston contributed reporting.
by Richard Wolff
One aspect of "American exceptionalism" was always economic. US workers, so the story went, enjoyed a rising level of real wages that afforded their families a rising standard of living. Ever harder work paid off in rising consumption. The rich got richer faster than the middle and poor, but almost no one got poorer. Nearly all citizens felt "middle class". A profitable US capitalism kept running ahead of labour supply. So, it kept raising wages to attract waves of immigration and to retain employees, across the 19th century until the 1970s.
Then everything changed. Real wages stopped rising, as US capitalists redirected their investments to produce and employ abroad, while replacing millions of workers in the US with computers. The US women's liberation moved millions of US adult women to seek paid employment. US capitalism no longer faced a shortage of labour.
US employers took advantage of the changed situation: they stopped raising wages. When basic labour scarcity became labour excess, not only real wages, but eventually benefits, too, would stop rising. Over the last 30 years, the vast majority of US workers have, in fact, gotten poorer, when you sum up flat real wages, reduced benefits (pensions, medical insurance, etc), reduced public services and raised tax burdens. In economic terms, American "exceptionalism" began to die in the 1970s.
The rich, however, have got much richer since the 1970s, as every measure of US income and wealth inequality attests. The explanation is simple: while workers' average real wages stayed flat, their productivity rose (the goods and services that an average hour's labour provided to employers). More and better machines (including computers), better education, and harder and faster labour effort raised productivity since the 1970s. While workers delivered more and more value to employers, those employers paid workers no more. The employers reaped all the benefits of rising productivity: rising profits, rising salaries and bonuses to managers, rising dividends to shareholders, and rising payments to the professionals who serve employers (lawyers, architects, consultants, etc).
Since the 1970s, most US workers postponed facing up to what capitalism had come to mean for them. They sent more family members to do more hours of paid labour, and they borrowed huge amounts. By exhausting themselves, stressing family life to the breaking point in many households, and by taking on unsustainable levels of debt, the US working class delayed the end of American exceptionalism - until the global crisis hit in 2007. By then, their buying power could no longer grow: rising unemployment kept wages flat, no more hours of work, nor more borrowing, were possible. Reckoning time had arrived. A US capitalism built on expanding mass consumption lost its foundation.
The richest 10-15% - those cashing in on employers' good fortune from no longer-rising wages - helped bring on the crisis by speculating wildly and unsuccessfully in all sorts of new financial instruments (asset-backed securities, credit default swaps, etc). The richest also contributed to the crisis by using their money to shift US politics to the right, rendering government regulation and oversight inadequate to anticipate or moderate the crisis or even to react properly once it hit.
Indeed, the rich have so far been able to use the crisis to widen still further the gulf separating themselves from the rest, to finally bury American exceptionalism. First, they utilised both parties' dependence on their financial support to make sure there would be no mass federal hiring programme for the unemployed (as FDR used between 1934 and 1940). The absence of such a programme guaranteed that real wages would not rise and, with job benefits, would likely fall - as they indeed have done. Second, the rich made sure that the prime focus of government response to the crisis would benefit banks, large corporations and the stock markets. These have more or less "recovered".
Third, the current drive for government budget austerity - especially focused on the 50 states and the thousands of municipalities - forces the mass of people to pick up the costs for the government's unjustly imbalanced response to the crisis. The trillions spent to save the banks and selected other corporations (AIG, GM, Fannie Mae, Freddie Mac, etc) were mostly borrowed because the government dared not tax the corporations and the richest citizens to raise the needed rescue funds. Indeed, a good part of what the government borrowed came precisely from those funds left in the hands of corporations and the rich, because they had not been taxed to overcome the crisis. With sharply enlarged debts, all levels of government face the pressure of needing to take too much from current tax revenues to pay interest on debts, leaving too little to sustain public services. So, they demand the people pay more taxes and suffer reduced public services, so that government can reduce its debt burden.
For example, California's new governor proposes to continue for five more years the massive, broad-based tax increases begun during the crisis and also to cut state services for the poor (reduced Medicaid funding) and the middle class(reduced budgets for community colleges, state colleges, and the university system). The governor admits that California's budget faces sky-high interest costs and reduced federal government assistance just when the crisis increases demands for public services. The governor does not admit his fear to tax the state's huge corporate and private individual wealth. So, he announces an "austerity programme", as if no alternative existed. Indeed, a major support for austerity comes from the large corporations and wealthiest Californians, who hold the state's bonds and want reassurances that the interest on those bonds will be paid.
California's austerity programme parallels similar programmes in many other states, in thousands of municipalities, and at the federal level (for example, social security). Together, they reinforce falling real wages, falling benefits, falling government services and rising taxes. In the US, capitalism has stopped "delivering the goods", as it so long boasted. The reality of ever-deeper economic division clashes with expectations built up when wages rose over the century before the 1970s. US capitalism now brings long-term painful decline for its working class, the end of "American exceptionalism" and rising social, cultural and political tensions.
Richard Wolff gives his monthly talk on global capitalism at the Brecht Forum in New York on 18 January; for more information about Professor Wolff's lectures, podcasts and media appearance, visit his website© 2011 Guardian News and Media
Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, where he taught economics from 1973 to 2008. He is currently a visiting professor in the graduate programme in international affairs of the New School University, New York City. Richard also teaches classes regularly at the Brecht Forum in Manhattan. His most recent book is Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It (2009)
By David Sirota
“There is a need for some reflection here: What is too far now? What was too far when Oklahoma City happened is accepted now. There’s been a desensitizing. These town halls and cable TV and talk radio, everybody’s trying to outdo each other.”
Those were the words of an unnamed Republican senator after America’s latest shooting rampage, this one a political assassination attempt in Tucson, Ariz. How sad—and telling—that the lawmaker refused to attach his or her name to such an important truism.
But that is the larger story of the slaughter’s aftermath. As conservative pundits spent the week insisting that their violent political rhetoric is somehow unrelated to political violence; as Sarah “Don’t Retreat, Reload” Palin scrubbed her website of rifle-sight graphics targeting Rep. Gabrielle Giffords; as right-wing radio hosts sanitized the Tucson shooter as a “lone gunman” rather than a “terrorist”—in the midst of all this obfuscation, few public figures found the courage to acknowledge truths that so desperately need to be aired.
One of those truths is that media can set societal norms and, thus, can help create conditions for violence—whether a mass murder in Tucson, an IRS bombing in Austin or any other future massacre. Another less obvious truth is that the new media economy encourages ever more violent vitriol because that’s now become the most reliable way to build a following and, thus, generate profit.
Save for sensationalists like Rupert Murdoch, media owners today aren’t deliberately manufacturing this dangerous dynamic—for the most part, it reflects a convergence of market forces. In this brave new world of infinite information conduits, the audience is more fragmented than ever. That has made the pursuit of audience share more intense, ultimately rewarding the loudest violence-glorifying demagogues in the noisy rabble. And remember: The situation is being further exacerbated as many media outlets transform their business models from mass broadcast to niche narrowcast—a shift that allows relatively small fringe mobs to sustain the most vituperative voices of hate.
Add to this a recession that is reducing resources for real journalism, sprinkle in our dehumanizing politics of vilification, and America has built a media economy that incentivizes violent bombast. Indeed, rather than nurturing the talent and intellect necessary to build a following through solid reporting and analysis, the system makes it far more efficient to generate viewers, listeners and Web clicks by simply screaming, “If ballots don’t work, bullets will,” as one Florida radio host recently thundered.
Like many who still cling to journalistic ideals and democratic principles, I’ve grappled with the pressures of this alarming change in the media landscape. As a radio host, I feel the constant pull of the pack mentality—that temptation to follow the path of least ratings resistance and use the public airwaves as a “blowtorch” (as the saying goes in the industry). Oh, how easy that would be—I could just add my voice to the now ubiquitous hatefest that polarizes issues and too often suggests violence is a legitimate form of political expression.
Alas, I’ve done my best to avoid this sadistic melee. I’m sure I haven’t been perfect, but I’ve tried to find an alternative route that circumvents the pitchforks, torches and Glocks. And thankfully, I’ve found support. My Colorado radio station has unabashedly backed my attempt to create a different kind of programming, and I’ve found a diverse and growing listenership that values something more than violent invective.
This is what still gives me hope in such dark times. For if there is an audience in my state that wants something more—something substantive and nonviolent—then there are audiences everywhere that want something more, too. It’s the media’s responsibility to start finding that forgotten majority before more blood is spilled.
David Sirota is the author of the best-selling books “Hostile Takeover” and “The Uprising.” He hosts the morning show on AM760 in Colorado and blogs at OpenLeft.com. E-mail him at email@example.com or follow him on Twitter @davidsirota.
© 2011 CREATORS.COM
by Dennis Henigan on January 14th, 2011
The gun lobby’s vision is guns in every corner of American society. The National Rifle Association wants guns in more American homes. It wants more guns on the streets, in grocery stores, in restaurants, in coffee houses, in bars, in churches, at workplaces, at political events, and on college campuses. Guns everywhere, to deter criminals from attacking and to shoot back when they do.
Arizona is fast becoming the quintessential realization of this vision. Arizona has virtually no restrictions on guns (the Brady Center gives it 2 points out of a possible 100 in its state law ratings) and the state recently became the third state to allow people to carry concealed weapons in public places without a permit. The state also recently allowed concealed carriers to take their guns into bars.
Have weak gun laws made Arizonans safer? The state ranks 6th in the nation in gun deaths. FBI data indicates it ranks 13th in homicides per 100,000 population. Arizona criminals don’t appear to be cowering in fear of armed, law-abiding citizens. Arizona also has become a favorite source of lethal weaponry for the Mexican drug cartels. Three Arizona gun dealers are among the top 12 American dealers in supplying Mexican crime guns.
Indeed, Arizona’s gun laws are so non-existent that it was entirely legal for Jared Loughner to be carrying his Glock outside that Tucson Safeway up until the moment he pulled the trigger. He actually was one of the “law-abiding citizens” the NRA thinks is making us safer by carrying concealed weapons where we live, work and shop. If Loughner’s community college, which expelled him because he was thought too dangerous to be in class, had reported his behavior to the Tucson police, Arizona law allowed them to do nothing to prevent him from carrying a concealed weapon.
All those Arizonans packing heat did not prevent the carnage in Tucson. There was, in fact, a law-abiding citizen with a gun on the scene at that Safeway. He told Ed Schultz he got to the shooter after someone else had grabbed the gun from the shooter’s hands and he initially thought the hero was the shooter. In the NRA’s America, where everyone has a gun, it is tough to tell the good guys from the bad.
Most Americans support a very different vision of America. It is a nation that allows responsible citizens to have guns in the home for self-defense, but imposes reasonable restrictions on guns to make it harder for dangerous people to be armed. In this America, a Jared Loughner would not be permitted to legally carry a gun to a Tucson Safeway. And he would not have available to him ammunition magazines that allowed him to fire over 30 shots from a semi-automatic without the need to reload, firepower that one law enforcement official has said “increased the lethality and body count of this attack.”
Don’t tell me the Second Amendment enforces the gun lobby’s vision for America. The Supreme Court’s recent rulings are entirely consistent with the alternative vision of reasonable restrictions. In its landmark opinion in District of Columbia v. Heller interpreting the Second Amendment to grant an individual right to have a gun in the home for self-defense, the High Court went out of its way to make clear that it was not recognizing a “right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purpose.” Justice Scalia pointed to a host of gun restrictions that remain “presumptively lawful” even under the newly-recognized right, including bans on “dangerous and unusual weapons.”
Loughner’s 33-round ammunition magazine made his Glock pistol a very “dangerous and unusual” weapon. It is telling that Robert Levy, Chair of the libertarian CATO Institute and the mastermind behind the Heller case, this week told reporter Michael Isikoff that he thought a ban on high-capacity magazines would not violate the Second Amendment and makes sense from a policy standpoint.
There are pundits who say that now is not the time to address divisive issues and that we should move to the middle of the political spectrum in our policy debates. The punditry needs to understand, however, that support for reasonable restrictions on guns is in the middle of the political spectrum. Contrary to the conventional wisdom, gun control is not an issue that necessarily must divide those who own guns and those who do not.
If you don’t believe me, ask Republican messaging maven Frank Luntz, who about a year ago did a far-reaching survey of gun owners, and particularly self-acknowledged NRA members, on their attitudes toward gun control. In an op-ed he wrote with Tom Barrett, Democratic Mayor of Milwaukee, Luntz reported, for example, that 86% of non-NRA gun owners, and 69% of NRA members, support extending Brady Law background checks to all sales at gun shows. Luntz said his poll “also found support among NRA members and other gun owners for numerous other policies to strengthen safety, security and law enforcement.” He concluded that “the culture war over the right to bear arms isn’t much of a war after all.”
There is, in fact, a strong national consensus supporting specific additional gun restrictions that still allow law abiding and responsible adults to make the ultimate choice about owning a gun. This consensus has not been translated into public policy because too many of our elected officials are intimidated by the NRA – a noisy, threatening lobby that does not even represent its own members on the question of reasonable regulation of guns.
Those who own guns and those who do not, to a surprising degree, have the same vision for America. Now that a much-admired Member of Congress lies seriously wounded, and the nation mourns yet another mass shooting and the fatal wounding of yet another child, is it too much to ask for a modicum of courage from Congress, and the President, to make that vision a reality?
For more information, see Dennis Henigan’s Lethal Logic: Exploding the Myths that Paralyze American Gun Policy (Potomac Books 2009)
We have seen massive flooding recently in Pakistan, Australia, Brazil, Sri Lanka, Columbia, China, Haiti, Nashville, Tennesee, Des Moines, Iowa, Poland, Portugal, France, Ukraine, Hungary - the list goes on and on. These floods not only produce death and destruction on massive scales; they wreak havoc on the lives of people who have immense cleanups to look forward to. Many people cannot recover because they don't have the money to rebuild their houses and their lives and to repurchase vehicles. For the most part the media makes no connection between these floods which are occurring world wide and global warming or climate change but there is a direct connection. The warmer the earth's oceans and atmosphere get, the more moisture evaporates into the atmosphere. The more moisture the earth's atmosphere contains, the more rain falls in massive quantities. And it's the increased rainfall in short periods of time that produces flash flooding and mudslides.
The Brazil flood left 100,000 homeless:
In Australia vehicles were tossed about like matchbook cars. Farm animals were abandoned:
2010 was the wettest year, meaning with the most rain worldwide, since precipitation records began 100 years ago. It will cost huge amounts of money to recover from these environmental catastrophes which are only going to increase as time goes on. Governments will bankrupt themselves trying to cope. Perhaps war itself will become obsolete as death and destruction on a massive scale focuses the attention of the world's peoples and governments on simply picking up the pieces from environmental destruction.
The two most respected national weather services in the US, Nasa and the National Oceanic and Atmospheric Administration (NOAA), agreed that 2010 tied with 2005 as the hottest since records began in 1880.
Overall 2010 and 2005 were 1.12F (0.62C) above the 20th century average when taking a combination of land and water surface temperatures across the world.
This is despite less solar activity and the onset of La Nina, an irregular cycle that brings cooler temperatures to the Pacific Ocean
James Hansen, the director of NASA's Goddard Institute for Space Studies (GISS), said increasing levels of carbon dioxide and other gases in the atmosphere since the industrial revolution are causing the global temperatures to rise.
He pointed out that the Earth’s temperature has been above average for 34 consecutive years.
"If the warming trend continues, as is expected, if greenhouse gases continue to increase, the 2010 record will not stand for long," he warned.
Bob Ward, of the Grantham Research Institute on Climate Change and the Environment at London School of Economics, said the amount of carbon dioxide in the atmosphere has reached 390 parts per million, its highest level for at least 800,000 years and almost 40 per cent higher than the level before the start of the Industrial Revolution.
He said nine of the 10 warmest years since records began in the 19th century have all occurred since 2000.
“The evidence is overwhelming that human activities are driving climate change, and the public should not be fooled by those who seek to delay and prevent action to reduce greenhouse gas emissions by claiming that the Earth is cooling or that carbon dioxide does not cause warming."
The last year was also the wettest on record as warm air tends to hold more water, with severe flooding in Pakistan.
In another marker of climate change, Arctic sea ice cover was the third smallest since record-keeping began in 1979.
As usual the weather varied across different regions, so even though north west Europe and Britain experienced a cold start to the year there were warmer than usual temperatures in other areas, with droughts across Russia later in the year, bringing up the average.
Rainfall also varied widely depending on the region, with fewer storms than normal over the Pacific but a high number of hurricanes over the Atlantic ocean.
The Met Office has also provisionally estimated that 2010 will be one of the hottest years on record and will confirm its figures later this month.
Daniel J. Weiss, who directs climate strategy for the Center for American Progress, told the Washington Post, said the figures should force the world to take action.
"Hopefully, this new data will finally convince congressional climate-science deniers that global warming is real and that action is urgent," he told the Washington Post. "To reject this latest evidence is like ignoring strange spots on a chest X-ray and continuing to smoke."
The homicide rate from gun deaths in the US is the highest in the world. But wait there's more: most of the drug related murders in Mexico are also caused by American gun sales. Guns are purchased in the US and then smuggled into Mexico where they are used to murder thousands of Mexicans. If you figure the combined homicide rate of gun related murders in both the US and Mexico, you come up with a homicide rate that is astronomical. This is all the more reason why gun control should become more stringent. It would not only cut down on mass murders in the US; it would cut down on drug related murders in Mexico and allow the Mexican police to gain an advantage. This in turn would cut down on the importation of drugs back into the US. Guns and drugs are related, and the fewer guns in society, the less drugs.
The following article points out the fact that US guns are fueling the drug runners in Mexico:
For years the United States and Mexico have wrestled over issues related to the border, and when it comes to U.S. policy, the government places stringent restrictions on what moves north into the country, without much consideration for what travels the other way.
So while agents crack down on the smuggling of marijuana, cocaine and illegal aliens into America, little attention is paid to the firearms and weapons that travel south to Mexico. This problem is proving deadly.
According to NBC News, the drug war between Mexican cartels has claimed more than 31,000 lives since late 2006. Though there are stringent laws in Mexico restricting gun ownership, illegal firearms from the U.S. continue to flow into Mexico, perpetrating the violence. In fact, U.S. firearms agents estimate that 80 to 90 percent of the weapons used by Mexican drug traffickers come from the United States. Most of these guns are obtained through cartel leaders who hire Americans with clean records - "gunrunners" - to purchase the weapons for them.
The U.S. has not only turned a blind eye to the weapons trafficking, but has actually used roadblocks to thwart attempts to stop the smuggling. Under a law passed by Congress in 2003, the identities of U.S. dealers that sell guns seized at Mexican crime scenes must remain confidential. A yearlong investigation by The Washington Post, though, has finally shed some light on just how significant a role U.S. weapons dealers play in arming Mexico.
The investigation shows that the state of Texas and the city of Houston produce more guns seized by police in drug wars in Mexico than any other state or city. It further reveals that "no single independent dealer stands out more for selling guns traced from south of the border than Bill Carter."
Though The Washington Post is quick to point out that there is no indication that the top selling gun stores to Mexico, including two of Carter's four "Carter's Country" gun stores in Houston, are actually doing anything wrong, there is no doubt that their guns have been associated with trafficking, kidnapping and murder. In the past two years alone, more than 115 guns from Carter's stores have been seized by authorities in Mexico.
But Bill Carter doesn't seem to take this problem very seriously.
"Why all the talk about guns going south when so many drugs are coming north that our cows along the interstate are gettin' high off the fumes!" he said recently.
If Bill Carter were to take the distribution of firearms in his stores more seriously, he could help prevent the murder of hundreds of people in Mexico.
by Gareth Porter
Fifty years after Dwight D. Eisenhower's January 17, 1961 speech on the "military-industrial complex", that threat has morphed into a far more powerful and sinister force than Eisenhower could have imagined. It has become a "Permanent War State", with the power to keep the United States at war continuously for the indefinite future.
But despite their seeming invulnerability, the vested interests behind U.S. militarism have been seriously shaken twice in the past four decades by some combination of public revulsion against a major war, opposition to high military spending, serious concern about the budget deficit and a change in perception of the external threat. Today, the Permanent War State faces the first three of those dangers to its power simultaneously -- and in a larger context of the worst economic crisis since the great depression.
When Eisenhower warned in this farewell address of the "potential" for the "disastrous rise of misplaced power", he was referring to the danger that militarist interests would gain control over the country's national security policy. The only reason it didn't happen on Ike's watch is that he stood up to the military and its allies.
The Air Force and the Army were so unhappy with his "New Look" military policy that they each waged political campaigns against it. The Army demanded that Ike reverse his budget cuts and beef up conventional forces. The Air Force twice fabricated intelligence to support its claim that the Soviet Union was rapidly overtaking the United States in strategic striking power -- first in bombers, later in ballistic missiles.
But Ike defied both services, reducing Army manpower by 44 percent from its 1953 level and refusing to order a crash program for bombers or for missiles. He also rejected military recommendations for war in Indochina, bombing attacks on China and an ultimatum to the Soviet Union.
After Eisenhower, it became clear that the alliance of militarist interests included not only the military services and their industrial clients but civilian officials in the Pentagon, the CIA's Directorate of Operations, top officials at the State Department and the White House national security adviser. During the Kennedy and Johnson administrations, that militarist alliance succeeded in pushing the White House into a war in Vietnam, despite the reluctance of both presidents, as documented in my book Perils of Dominance.
But just when the power of the militarist alliance seemed unstoppable in the late 1960s, the public turned decisively against the Vietnam War, and a long period of public pressure to reduce military spending began. As a result, military manpower was reduced to below even the Eisenhower era levels.
For more than a decade the alliance of militarist interests was effectively constrained from advocating a more aggressive military posture.
Even during the Reagan era, after a temporary surge in military spending, popular fear of Soviet Union melted away in response to the rise of Gorbachev, just as the burgeoning federal budget deficit was becoming yet another threat to militarist bloc. As it became clear that the Cold War was drawing to a close, the militarist interests faced the likely loss of much of their power and resources.
But in mid-1990 they got an unexpected break when Saddam Hussein occupied Kuwait. George H. W. Bush - a key figure in the militarist complex as former CIA Director -- seized the opportunity to launch a war that would end the "Vietnam syndrome". The Bush administration turned a popular clear-cut military victory in the 1991 Gulf War into a rationale for further use of military force in the Middle East. Secretary of Defense Dick Cheney's 1992 military strategy for the next decade said, "We must be prepared to act decisively in the Middle East/Persian Gulf region as we did in Operations Desert Shield and Desert Storm if our vital interests are threatened anew."
The Bush administration pressured the Saudis and other Arab regimes in the Gulf to allow longer-term bases for the U.S. Air Force, and over the next eight years, U.S. planes flew an annual average of 8,000 sorties in the "no fly zones" the United States had declared over most of Iraq, drawing frequent anti-aircraft fire.
The United States was already in a de facto state of war with Iraq well before George W. Bush's presidency.
The 9/11 attacks were the biggest single boon to the militarist alliance. The Bush administration exploited the climate of fear to railroad the country into a war of aggression against Iraq. The underlying strategy, approved by the military leadership after 9/11, was to use Iraq as a base from which to wage a campaign of regime change in a long list of countries.
That fateful decision only spurred recruitment and greater activism by al Qaeda and other jihadist groups, which expanded into Iraq and other countries.
Instead of reversing the ill-considered use of military force, however, the same coalition of officials pushed for an even more militarized approach to jihadism. Over the next few years, it gained unprecedented power over resources and policy at home and further extended its reach abroad:
Those moves have completed the process of creating a "Permanent War State" -- a set of institutions with the authority to wage largely secret wars across a vast expanse of the globe for the indefinite future.
But the power of this new state formation is still subject to the same political dynamics that have threatened militarist interests twice before: popular antipathy to a major war, broad demands for reduced military spending and the necessity to reduce the Federal budget deficit and debt.
The percentage of Americans who believe the war in Afghanistan is not worth fighting has now reached 60 percent for the first time. And as the crisis over the federal debt reaches it climax, the swollen defense budget should bear the brunt of deep budget cuts.
As early as 2005, a Pew Research Center survey found that, when respondents were given the opportunity to express a preference for budget cuts by major accounts, they opted to reduce military spending by 31 percent. In another survey by the Pew Center a year ago, 76 percent of respondents, frustrated by the continued failure of the U.S. economy, wanted the United States to put top priority in its domestic problems.The only thing missing from this picture is a grassroots political movement organized specifically to demand an end to the Permanent War State. Such a movement could establish firm legal restraints on the institutions that threaten American Democratic institutions through a massive educational and lobbying effort. This is the right historical moment to harness the latent anti-militarist sentiment in the country to a conscious strategy for political change.
Gareth Porter is an investigative historian and journalist on U.S. national security policy who has been independent since a brief period of university teaching in the 1980s. Dr. Porter is the author of four books, the latest of which is Perils of Dominance: Imbalance of Power and the Road to War in Vietnam (University of California Press, 2005). He has written regularly for Inter Press Service on U.S. policy toward Iraq and Iran since 2005.
John Coltrane: One Down, One Up
Monk and Coltrane: Thelonious Monk and John Coltrane at Carnegie Hall
Best album of 2005 (*****)
Doug Ramsey: Take Five: The Public and Private Lives of Paul Desmond
This is a great book! Paul Desmond and Dave Brubeck formed the heart of one of the best all time jazz groups. Paul was the quintessential intellectual, white jazz musician. A talented writer, he never published anything. However author, Doug Ramsey has collected Paul's letters here. How ironic that now his writing in the form of letters to his father and ex-wife, among others, is finally published showing another window on the mind of this talented person. A sideman, for the most part, his entire life, the Dave Brubeck Quartet might never have happened at all due to the fact that Paul had managed to offend Dave to the point where he never wanted to see him again. It had to do with a gig that Paul actually was the leader of. Paul wanted to take the summer off to play another gig, and Dave wanted Paul to let him take over the gig at the Band Box in Palo Alto, CA. Paul wouldn't let him and Dave, married with two children, proceeded to starve. Due to an elaborate publicity campaign, when he realized the error of his ways, Paul managed to worm himself back into Dave's good graces. The rest is history. This book is remarkable for the insight it gives into a working jazz musician's mind, wonderful pictures and interviews with the significant figures in Paul's life. Author Ramsey, not a remarkable penman himself, has nevertheless done a magnificent job of assembling all these various materials. Unlike a lot of jazz authors, he doesn't overly idolize his subject with the result that you get the feeling that you have met a real person and not a idealized version. That's high praise indeed for any biographer. (*****)