California Free Press

U.S. Foreclosure Rate Jumps In August

by The Associated Press, from NPR

September 16, 2010

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009, RealtyTrac said.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Banks have been stepping up repossessions to clear out their backlog of bad loans with an eye on eventually placing the foreclosed properties on the market, but they can't afford to simply dump the properties on the market.

Concerns are growing that the housing market recovery could stumble amid stubbornly high unemployment, a sluggish economy and faltering consumer confidence. U.S. home sales have collapsed since federal homebuyer tax credits expired in April.

That's one reason fewer than one-third of homes repossessed by lenders are on the market, said Rick Sharga, a senior vice president at RealtyTrac.

"These (properties) are going to come to market, but very slowly because nobody wants to overwhelm a soft buyer's market with too much distressed inventory for fear of what it would do for house prices," he said.

As a result, lenders are putting off initiating the foreclosure process on homeowners who have missed payments, letting borrowers stay in their homes longer.

The number of properties receiving an initial default notice - the first step in the foreclosure process - slipped 1 percent last month from July, but was down 30 percent versus August last year, RealtyTrac said.

Initial defaults have fallen on an annual basis the past seven months. They peaked in April 2009.

Still, the number of homes scheduled to be sold at auction for the first time increased 9 percent from July and rose 2 percent from August last year. If they don't sell at auction, these homes typically end up going back to the lender.

More than 2.3 million homes have been repossessed by lenders since the recession began in December 2007, according to RealtyTrac. The firm estimates more than 1 million American households are likely to lose their homes to foreclosure this year.

In all, 338,836 properties received a foreclosure-related warning in August, up 4 percent from July, but down 5 percent from the same month last year, RealtyTrac said. That translates to one in 381 U.S. homes.

The firm tracks notices for defaults, scheduled home auctions and home repossessions - warnings that can lead up to a home eventually being lost to foreclosure.

Among states, Nevada posted the highest foreclosure rate last month, with one in every 84 households receiving a foreclosure notice. That's 4.5 times the national average.

Rounding out the top 10 states with the highest foreclosure rate in August were: Florida, Arizona, California, Idaho, Utah, Georgia, Michigan, Illinois and Hawaii.

Economic woes, such as unemployment or reduced income, are now the main catalysts for foreclosures.

Lenders are offering a variety of programs to help homeowners modify their loans, but their success rates vary. Hundreds of thousands of homeowners can't qualify or fall back into default.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. Nearly half of the 1.3 million homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

The program, known as Making Home Affordable, has provided permanent help to about 390,000 homeowners since March 2009.

Regardless, many troubled borrowers have seen their efforts to get a loan modification stymied.

Larry Book of Winter Garden, Fla., was one packet away from a permanent loan modification from Chase under the Obama administration's foreclosure prevention plan after more than a year of back and forth and one failed attempt.

But his modification never went through. Instead, his loan was transferred from Chase to IBM Lender Business Process Servicers in July and he was told he owed $9,562.62 and must bring his mortgage current by Sept. 15 or foreclosure proceedings will begin.

"It just becomes too exhausting," Book said about the modification process. "That's why some people walk away. But I've invested too much and given up too much to just let it go."

A Victory for Consumers and the Middle Class: Elizabeth Warren to Set Up Consumer Financial Protection Agency

White House Taps Warren To Set Up Consumer Financial Protection Bureau

First Posted: 09-15-10 06:05 PM   |   Updated: 09-15-10 10:17 PM

The White House has tapped Elizabeth Warren as a special adviser to help set up the Consumer Financial Protection Bureau, affirming its support for a tough new agency charged with protecting consumers from abusive lenders.

The move allows her to act as an interim head of the CFPB and will enable her to begin setting up the agency immediately and prevent the GOP from filibustering her nomination. Warren could serve until President Barack Obama nominates a permanent director to serve the five-year term -- a nomination he's not required to make for some time. Obama also could nominate her as the permanent director in the near future, a prospect that has been discussed among top aides, according to a person familiar with White House deliberations. Warren formally will be named as a special adviser reporting directly to Obama, and serving in a similar capacity to Treasury Secretary Timothy Geithner, later this week.

The CFPB was a cornerstone of Obama's financial reform package and Warren is credited as the intellectual founder of the agency -- a proposal she advocated three years ago. The ability of the administration to nominate an acting director to serve while the agency is launched within the Treasury Department was first reported by HuffPost in July.

The appointment, though, was first reported Wednesday by ABC News. A senior Democratic congressional aide with knowledge of the decision confirmed the report to HuffPost.

On Tuesday, Sen. Christopher Dodd (D-Conn.), chairman of the Banking Committee, said that such an appointment could create a backlash and lead the next Congress to defund the bureau. On Friday, a former chief economist for the International Monetary Fund, Simon Johnson, laid out the case for an interim appointment.

As a White House adviser, Warren will have a direct line into the Oval Office. A Bloomberg report on Wednesday speculated that Warren would be named as a counselor to Geithner -- an irony noted by some commentators given their contentious relationship.

The Huffington Post reported July 15 that Geithner had expressed opposition to Warren getting the nod. Geithner, his key lieutenants and top White House officials, while not denying the report, stressed repeatedly that they all felt she was "extremely well qualified." To date, no one has publicly denied the HuffPost report.

Now is the Time for Democrats to Draw a Line in the Sand Over Taxing the Rich

by John Lawrence

The Bush tax cuts will expire at the end of this year. Obama favors extending them for the middle class while letting them expire for the upper 2% - everyone making over $250,000. for a married couple. Republicans want them extended for the wealthy as well, that is, they want them extended for everybody. Only problem is the rich don't need the money, nor will it "trickle down" in the form of job creation or more demand (i.e. increased GDP). Extending the tax cuts for the middle class will require congressional approval. If Congress doesn't act the tax cuts will expire for everyone and everyone's taxes will go up.

If the tax cuts are extended for the wealthy, it will add about a trillion to the US budget deficit over 10 years. Republicans are also up in arms over the deficit, but not when it comes to tax increases on the wealthy. Now is the time for Obama and the Democrats to draw a line in the sand and refuse to compromise on this issue. And they need to bring it to a vote ASAP, before the next election in November. I couldn't believe my ears when I heard a reporter on CBS news with Katie Couric suggest that maybe the tax cuts for the middle class should be made permanent, and, as a compromise, the tax cuts for the wealthy should be extended for two years. First, why is a reporter suggesting this? Well, you know that Katie Couric and every other talking head on TV makes more than $250,000. a year so it affects all of them and it shows. Second, how can anyone in their right mind suggest that certain tax cuts should be made "permanent" and other ones extended for two years which is an eternity in politics. There is no such thing as "permanent" when it comes to government budgets, and there is no such thing as "temporary" when it comes to tax cuts. What would most likely happen is that in two years there would be all kinds of pressure to extend them even longer especially if Republicans control one or more Houses of Congress and especially if a Republican is elected President in 2012.

So Obama and the Democrats must act now in the name of fiscal sanity and in the name of drawing a distinction between taxes on the rich and taxes on the middle class. Republicans have gotten away for far too long with lumping tax cuts or tax increases together for all economic classes. So while the middle class might have gotten a tax cut of a couple thousand dollars, for instance, the upper 2 % would be getting a tax cut of a couple hundred thousand dollars. This is exactly how income has been shifted upward from the middle class to the rich - by Federal tax policy! The fact of the matter is that the government has been systematically defunded by the Bush and Reagan tax cuts. They have added trillions to the national debt. Reagan tripled it from $1 trillion to $3 trillion and Bush doubled it from $5 trillion to $10 trillion. What's more Bush "built in" trillions in ongoing deficits which Obama is trying desperately to turn around. The only way to do it and to try to create jobs at the same time is to pay for any job creating initiatives, and the only way to do this is to tax the rich.

Taxing the rich is the only way to create jobs and to not increase the deficit. Why? Because job creating initiatives, whether they are investments in infrastructure or tax breaks for businesses that create jobs, cost money. Where is that money going to come from and not add to the deficit? TAXES. And since taxing the middle class would decrease economic demand, that would not be a good idea. The idea is to increase demand AND create jobs. Those two things do not necessarily go hand in hand. In other words increasing demand may not create more jobs especially if the increased demand is for goods that are not made in the US.

But the unfairness of an across the board tax cut is manifestly obvious if one stops to think about it. Let's say you make $60,000. and pay at a 15% rate. Then you would pay $9,000. in taxes. A 5% tax cut would mean you paid at a 10% rate which would be $6000. You save $3000. On the other hand someone making $10 million and paying at a 35% tax rate would pay $3,500,000. in taxes. A 5% decrease would mean a tax rate of 30%, and you'd pay $3,000,000, a savings of $500,000. On the one hand chicken feed and chump change; on the other you're talking real money. That's why the rich are so adamant about tax cuts. They are the ones who pocket most of the money. It all has to do with percentages. If you gave everyone say a tax cut of $3000., rich or poor, a tax cut not in percentages but in absolute dollar terms, then the rich would not profit so handsomely from tax cuts. But when it's a percentage, they are effectively getting a much bigger break than the middle class. But wait a minute. Obama even wants to give the rich a tax cut on their first $250,000. of income. So they would end up getting a bigger tax cut in absolute dollars than most of the middle class even under Obama's plan. But yet they're still not satisfied.

And hedge fund managers like John Paulson who made $3.7 billion on one trade last year pay at a tax rate of only 15% due to some accounting shenanigans. His tax savings run into the billions if the Bush tax cuts are extended for the rich. Yet Paulson's hedge fund is classified as a "small business" because he has less than 500 employees! Warren Buffet, the second richest American after Bill Gates, even remarked that it wasn't fair that he paid less taxes, percentagewise, then his secretary!

One of the arguments against not giving everyone who makes more than $250,000 a tax cut is that it would hurt small business and would cause them not to create jobs. This is BS for two reasons. 1) Contrary to popular misconception small business is not the net job creator it has been thought to be and 2) only 2% of small businesses would be affected and these are mostly hedge funds and lobbying firms not Mom and Pop stores. Between 1992 and 2005, small businesses destroyed more jobs than they created. Start-ups created most of the jobs not small businesses.

So the Republicans don't have a leg to stand on in their arguments for extending the Bush tax cuts for the rich. They have only smoke and mirrors and the ignorance of their constituents who believe the lies and distortions they feed them. The only real way to pump prime the economy without adding to the deficit is for government to create jobs directly to rebuild old infrastructure and create much needed new infrastructure or at least to subcontract this out to the private sector, and to pay for it by taxing those who are in the best position to pay for it and who have been making out like bandits for the past 30 years as a result of Republican "supply side" economics. That means raising taxes on the rich and wealthy corporations who are sitting on their money and implementing a financial transactions tax. And private sector investment usually follows infrastructure investment by the government. Think of the railroads and the interstate highway system. One could argue that the best way to create jobs in the private sector is for government to make massive public sector investments in infrastructure. The line in the sand that Democrats must draw which is the distinction between taxing the middle class and taxing the rich as two separate entities as opposed to raising or lowering taxes on everyone in synch is even more important as a pedagogical distinction than it is as a government funding tool. The Democrats have to hammer this point home in the minds of the American people who have been sold a bill of goods about taxes by right wing propaganda which continues to try and make middle class voters vote against their best economic interests. It's time to draw a line in the sand and lower taxes on the middle class while raising them on the rich.

2010 Tied for Warmest Year as Walruses Flee Ice Melt

By Deborah Zabarenko, Environment Correspondent

Published September 15, 2010 by Scientific American

WASHINGTON (Reuters) - So far, 2010 is tied for the warmest year on record, and Arctic sea ice reached its third-lowest level, prompting thousands of walruses to haul themselves out of ice-starved waters, U.S. scientists said on Wednesday.

The first eight months of the year match the record set for the same period in 1998 for the highest combined land and ocean surface temperatures worldwide, at 58.5 degrees F (14.7 C), 1.21 degrees F (0.67 degrees C) above the 20th century average, the U.S. National Climatic Data Center said in a statement.

Temperatures for the northern hemisphere summer -- June through August -- were the second-warmest globally, after 1998, the center said.

Most parts of the globe were hotter than average, with the most prominent warmth in eastern Europe, eastern Canada and parts of eastern Asia. Australia, central Russia and southern South America were cooler than average.

Britain had its coolest August since 1993, according to the U.K. Met Office, while China was 2 degrees F (1.1 degree C) above the 1971-2000 average, the warmest August since 1961, the Beijing Climate Center reported.

In the Arctic, sea ice cover appeared to hit its lowest point for the year on September 10, according to the U.S. National Snow and Ice Data Center.

This year's Arctic ice cover is the third-lowest since satellites started measuring in 1979, the center said in a statement. This is less ice than at 2009's low point, but above the amount seen in 2008 and 2007.

That's still less than the long-term average and well outside the range of natural variability, the center said.

WALRUSES ON SHORE

At its lowest level, Arctic sea ice covered 1.84 million square miles (4.76 million square kilometers), about 240,000 square miles (630,000 square kilometers) above the record low of 2007.

This is only the third time satellites have shown Arctic ice extent dropping below 1.93 million square miles (5 million square kilometers).

The loss of Arctic sea ice has caused thousands of Pacific walruses to come up onto land, the conservation group World Wildlife Fund said, citing U.S. Geological Survey observations.

An estimated 10,000 to 20,000 walruses gathered onshore in Alaska in recent days, said Geoff York, an Arctic biologist with World Wildlife Fund.

"When these animals get to shore, they're normally spread out across a pretty vast area of sea ice so they're not piled up in the 10s or 20 thousands of animals that we see happening now," York said by telephone.

Under normal conditions, walruses eat bottom-dwelling creatures in shallow water on the continental shelf, using sea ice as fishing platforms. Recently, sea ice has retreated past the shelf into areas of deep water, where walruses can't fish.

Risks include the long swim to land, sometimes as much as 400 miles; trampling in walrus stampedes -- they spook easily, like deer or cattle, York said -- and the threat of predation by polar bears.

However, having many walruses on shore may make it easier to get an accurate population estimate, said Chad Jay of the U.S. Geological Survey Alaska Science Center.

The current estimate, based on a 2006 aerial survey, is 130,000, but Jay said this is probably low because the survey skipped some areas.

(Additional reporting by Yereth Rosen in Anchorage; Editing by Jerry Norton)

Gingrich Panders to Low Information Voters

John,

If there's one person I've always considered to be a truly slimy, immoral politician and human being, it's Professor/Politician Newt Gingrich. Democrats have never countered this weasel's sly, slippery tongue that lashes out multiple lies and conservative epithets about liberals as cleverly and abundantly as my grandmother in northern Maine could perfectly bake fluffy homemade blueberry pies, donuts and breads at the same time.
                                                      
This pretentious man is the archetypal representative of everything despicable and corrupt about our political system and so many politicians. Robert Reich is too kind to this chameleon who willy nilly will come up with threatening schemes and slick overtures with a smudge of intellectual insight for good measure to scare the fearful,  to entice the gullible or opportunistic at any cost... even if it means a direct or indirect undermining of the spirit of our Constitution to sanctify his southern spoon-fed, screwball conservative tenets to the somnolent party faithful.

Much to my disgust over the past 35 years, this man's type of pointed demogoguery and the devious political ways of others like him -- all preying on atavistic fears with their blatant lies -- HAVE BEEN EFFECTIVE over the years. Witness now, as in Delaware, first indications of a potentially broad two-year sudden 180 degree switch back to the Beck/Limbaugh/Gingrich/Fox News backers of the "Give us our government back" simplistic Republican candidate-novices now winning the majority attention and loyalty of voters.

If Democrats clearly lose the majority seats in the House and Senate in November, this will only amplify "An everyone for himself/herself " mentality in our nation to another decadent Me First and Community Second level. "Free markets" will become the newly revived rallying call not as sources of inspiration, freedom and opportunites for all, but of the enriched decadence of a small powerful elite. Effective governance will continue to slide into paralysis as Democrats subsequently assume the role of blocking Republican initiatives out of sheer frustration from losing power, and as special interests expand their political influence over government policies. Then the lower-middle classes can blissfully welcome a return to Reagan's ideals of not having any concern for social-nets, except privatizing them. Yes, indeed, everyman for himself.

Best,
Frank

A Myth About Job Creation

Posted by Truthdig on Sep 14, 2010

By Ruth Marcus

It is taken as gospel among politicians of both parties that small business is the engine of job creation. “We’re starting with small businesses because that’s where most of the new jobs do,” President Barack Obama said earlier this year. “Small businesses are the job generator of America,” echoed Arizona Republican Sen. John McCain.

They’re in good company. George W. Bush and John Kerry, Bill Clinton and Ronald Reagan have all made that claim. Only one problem: These assertions are overblown and simplistic. Take it from a reliable source—the chief economist for the Small Business Administration. “It’s not true,” Zoltan Acs told me when I asked about whether small business is, in fact, the engine of job creation. “It’s half the story.”

Small businesses are job creators; they are also job destroyers, as firms fail. Most start-ups do: About 40 percent of jobs created by start-ups are eliminated in the first five years. Meanwhile, established small businesses—your neighborhood dry cleaners—don’t generate many new jobs.

The chief source of small-business job creation comes from a mere handful of firms—the “gazelles,” in the evocative term of economist David Birch—that start small and prosper. The difficulty is that the gazelles among the herd can be seen only in the rear-view mirror. 

And existing firms that change with the times and expand are another major source of new jobs, a phenomenon that the bipartisan fetishization of small business studiously ignores.

This conventional wisdom about small business was once revolutionary. About 30 years ago, Birch reported that small businesses were responsible for somewhere between two-thirds and four-fifths of net new jobs (jobs created minus jobs lost).

Later studies support his basic proposition: Small business plays an important, and previously overlooked, role in job creation. But the research suggests that Birch’s numbers are overstated—and that size isn’t all that counts. 

This matters because it serves as the basis for key policy decisions. The Bush tax cuts for the wealthy must be extended, Republicans argue, because—all together now—small business is the engine of job creation. The small-business bill now pending in the Senate must be passed, Democrats insist, because ... you know the chorus.

Except that the sound bite is not accurate. A 2008 paper by David Neumark, Brandon Wall and Junfu Zhang examining all businesses in California between 1992 and 2004 concludes, “Although we still find that small establishments create more jobs, the difference is much smaller than that originally suggested by Birch.”

Likewise, a study that Acs conducted for the SBA found that “most, if not all, of the growth in employment comes from the 300,000 high-impact firms in the economy over any four-year period. Depending on the time period studied, this is about evenly split between firms with fewer than 500 employees (the SBA definition of small business) and firms with more than 500 employees. Therefore, it would appear that both small and large firms contribute about equally to employment growth.”

A new paper by economists John C. Haltiwanger, Ron S. Jarmin and Javier Miranda adds another wrinkle to the data: the age of the business. In terms of job creation, younger is better. “Once we control for firm age there is no systematic relationship between firm size and growth,” they write. “Our findings highlight the important role of business startups and young businesses in U.S. job creation.”

Small business matters—just not as much as, and in more nuanced ways than, politicians proclaim. Indeed, one key difference between this recession and its predecessors is that small business has been hit harder than normal, perhaps because the downturn was driven by turmoil in the financial markets.

Whereas a typical recession tends to wallop big businesses harder than small ones, this time around “young, small businesses have taken it on the chin more than usual,” Haltiwanger told me.

Can government policy make a difference? Perhaps. If banks are wary of lending, loan guarantees, such as those in the measure now awaiting Senate action, might help start-ups get launched—and some of these might succeed in creating lasting jobs.

The argument that higher taxes would squelch job creation is far less convincing. The start-ups that need nurturing aren’t apt to be the ones hit by higher marginal tax rates.

But here’s a suggestion for policymaking about small business. Base it on the facts, not on wishful mythmaking—however bipartisan.

Ruth Marcus’ e-mail address is marcusr(at symbol)washpost.com.

© 2010, Washington Post Writers Group

 

Profit is the Goal – Labor the Cost to be Diminished

by Frank Thomas

What’s happening in the U.S. with its completely out-of-balance social-economic model sensitizes me to the systemically destructive way capitalism is working in America. When profit and wealth in the hands of a few define a culture, when firms consider labor an obstructive cost to be optimally reduced, when there is an incredible indifference to do the best for all Americans, when we fail to speak to the question of the human condition and state of society as we know it … then all things are vulnerable, including our democracy.

What kind of world do you see  under the paradigm of a compound 3-4% GDP growth each year over the next 25-50 years?  The effects on already scarce resources and on the environment will be worse than disastrous unless serious changes in how we live emerge. GDP per capita does not differentiate between transactions that add to the well-being of a country and those that diminish it. A dollar spent on sending a teenager to prison adds as much to GDP as a dollar spent on sending him to college … and we have 685 prisoners per 100,000 people (compared to 87 per 100,000 in Europe)! A GDP growth statistic doesn’t measure quality-of -life factors like poverty level, life expectancy, access to health care, income disparity, working hours, culture and leisure time, etc.

We need a broad grass-roots political movement that fosters  a conversation  around alternatives to the standard recipe of ad infinitum 4% GDP growth rates and laissez-faire capitalism leading to:  intensifying concentration of power and wealth; two billion poor worldwide falling faster into a no-man’s land existence; natural resources being plundered , the environment increasingly polluted;  unemployment insurance compensation and social-nets in general being cynically attacked as Big Government robbing individual freedom and self-initiative; an enriching oligarchic-power-capitalism and democracy steered by huge transnational corporations whose mission is global profits, before people. 

I’m not optimistic about our capability to have this conversation, to explore new perspectives and rhythms of what constitutes a healthy, honorable, happy lifestyle. A lifestyle filled with different kinds of cultural innovations and material values in place of just producing and consuming more “modern” gismo, trivial, conspicuous products; a lifestyle where the public education process is not dumbed down by wasting +- $250 billion annually on the ‘military economy,’ playing the unaffordable role of  being the world’s social-engineering protector and enforcer; a lifestyle not buried in a kind of cultural, spiritual death from overflowing narcotic TV commercials, flashy and superficial news, warped ego-centric ideological propagandism;  a lifestyle where you can dream to see the world and educate yourself in what interests you without going into a prolonged penurious state; in short, a lifestyle where Hype and Reckless Debt is NOT Life … where households are not being debt drowned with 5 or 6 credit cards at banker robber-baron usury rates.

Is ethical, productive, socially conscious  capitalism possible?  Can progress and social justice go hand-in-hand in America as in Europe?  Yes, in theory, but I don’t see it happening until a disciplined “people’s movement” arises that addresses head-on the question: “Can we continue to do things the way we have been doing them?” If not, what fundamental changes are necessary to enjoy life on this planet and in our homeland while keeping both intact for future generations? 

Human beings can be very creative, resourceful but sadly squander these gifts when it comes to admitting to – and coming together to correct – obvious social-economic breakdowns and antiquated ways ultimately carrying everyone down.  The waters get muddled with the same old phoney, narrow, dogmatic cliches, “The business of America is business. Business should be uninhibited  and government regulators off our backs. Profit is the goal. Maximum Profit and Trickle Down economics are the only things that work.”                                                                    
      
Unfortunately, lower-middle-class working Americans are not part of the conversation nor the short-term cultural profit equation applied globally. Following summary data on U.S. structural jobless situation vividly portrays the incredible level of human pain being inflicted by a culture of indifference that sits deep:
      

• Normal unemployment level at 5% rate:         7 million

• Great recesssion caused unemployment:       8 million

• Officially unreported unemployment and  8 - 15 million underemployment:

  GRAND TOTAL UNEMPLOYED TODAY        23 to 30 million!

Minimum monthly net private-sector jobs required just to recover 8 million recession and 8 million unreported unemployed plus cover 1 million labor force growth is … 175,000.  Wasn´t the August report a resounding ±60,000 net new private-sector jobs and a fabulous 85,000 average monthly performance during 2002/07, a  so-called economic expansion period in Bush´s term?

We Americans seem destined to await the next crisis of all crises to have that thoughtful conversation … about how to do the best we can for all Americans. Exerting what´s right comes when the rest of us  acknowledge with respect that `dignity matters´ when people fall through the cracks by forces not entirely of their own doing or control.

       

 

Proposition 23, Anti-Environment 'California Jobs Initiative', Is Funded By Big Polluters In Texas And The Midwest

First Posted: 08-19-10 01:17 PM   |   Updated: 08-19-10 01:18 PM, From Huffington Post

Proposition 23, the so-called "California Jobs Initiative" threatening to suspend some of California's unprecedented clean air and renewable energy legislation, is raking in millions of dollars from Texas oil companies and special interest groups in the Midwest that stand to profit from rolled-back environmental regulation.

The initiative, which is to be voted on in California's upcoming November elections, aims to suspend clean air and energy laws under the "Global Warming Solutions Act of 2006" until California's unemployment rate falls below 5.5 percent for a full year. But this might take a while, considering that the state's recession-induced unemployment rate currently hovers around 12.3 percent.

While the proposition claims to be about creating jobs in California, its biggest financial backers are Texas oil companies, including Valero and Tesoro Corporations, who have donated $4 million and $525,000, respectively, to the initiative.

Valero spokesperson Bill Day told HuffPost that the company supports Prop. 23 because it's a "common-sense" approach to solving California's economic problems.

"As you know, California's economy is in trouble, and this would be the worst time to implement a measure like AB 32 that would cause steep price increases for consumers and threaten jobs," Day said. "We employ 1,600 people in the state with an annual payroll of $122 million, and this year Valero will pay more than $71 million in California property and sales taxes, so Valero has an interest in California's continued economic strength."

Valero's 2009 annual report to investors presents a more straightforward account of its financial interests in halting greenhouse gas laws, concluding that any clean air regulations would have an "adverse effect" on its "financial position."

"Any new federal restrictions on greenhouse gas emissions... could result in material increased compliance costs, additional operating restrictions for our business, and an increase in the cost of the products we produce, which could have a material adverse effect on our financial position, results of operations, and liquidity," the company wrote.

Steve Maviglio, a spokesman for the "No on Prop. 23" campaign, called the proposition "a full-out assault" on California's environmental initiatives.

"Prop 23 is a full-out assault on California's clean air and clean energy laws being financed by two Texas oil companies that would rather spend millions trying to kill our law than clean up their mess," he said. "The low-carbon fuel standard would certainly be shelved indefinitely."

Other controversial supporters of Prop. 23 include the Adam Smith Foundation, a right-wing nonprofit in Missouri that has recently been accused of abusing its tax status to funnel money into the initiative without having to disclose its donors. The foundation donated a conspicuous $498,000 to the initiative, which California's Capitol Weekly pointed out is quite a lot, considering the group raised a total of only $5,000 in 2009.

The group did not respond to calls for comment, but questioned by the Los Angeles Times recently, foundation president John Elliot refused to identify the group's donors by name, citing the anonymity granted to donors of tax-exempt foundations under section 501(c) 4 of federal tax law. He did, however, mention the effect that environmental regulations have on Missouri's lucrative coal industry. "Anything to do with energy affects Missouri, No. 1 because we rely heavily on coal," Elliot said.

The foundation has aroused the suspicion of California State Senate President Darrell Steinberg (D-Sacramento) and Assembly Speaker John Perez (D-Los Angeles), who wrote a letterto U.S. Attorney General Eric Holder on August 3 requesting an investigation into the foundation's nonprofit status. Federal law states that a nonprofit may contribute to political campaigns as long as its main purpose is the "promotion of social welfare" -- but the Adam Smith Foundation's only purpose this year seems to be funneling money into Prop. 23.

"This much is clear: the Foundation went from raising only $5,000 in 2009, ending that year with only $109, to contributing $498,000 to Proposition 23 in the first part of 2010," Perez and Steinberg wrote in the letter. "Serious issues are implicated by the use of an out-of-state organization that may be abusing its tax status to avoid having to disclose the name of its donors to a campaign that will have a profound impact on the future of California."

Anita Mangels, a spokeswoman for the Yes on 23 campaign, responded to Steinberg and Perez's allegations by calling their letter a "political vendetta" and pointing out that other big foundations such as the National Resources Defense Council and the Green Tech Action Fund have donated to the "No on Proposition 23" campaign. But LA Times reporter Michael Hiltzik points out that the foundations opposing Prop. 23 are much more open about their donors and activities than Adam Smith has been:

"Green Tech, which has contributed $500,000 to defeat Proposition 23, is affiliated with the San Francisco-based Energy Foundation, which is backed by foundations established by the late William Hewlett and David Packard of Hewlett-Packard fame, and several other charitable funds identified on its website.

The NRDC may not disclose the names of all its contributors, but it's tolerably open about its activities. Its spending of about $1 million to fight 23 (based on the latest campaign filings) comes from an annual budget of about $80 million. It boasts a 40-year record of legal action on environmental issues and has offices in both San Francisco and Los Angeles. It's not a front for special interests, but an interest group in its own right."

 

Steinberg said he and Perez haven't heard back from Holder yet regarding the investigation, but he hopes at least to arouse the suspicions of California voters.

"We wanted to get this on record and make it clear that while this is first and foremost a California issue, there are a lot of out-of-state interests that are trying to impede our progress," he told HuffPost. "The public ought to be rightly suspicious any time a public foundation hides the name of its donors, a foundation that ends up contributing hundreds of thousands of dollars to help defeat a landmark environmental achievement in California. The very fact that a foundation is fronting for someone should tell the voters in California a lot."

The Republican Threat to Shut Down the Federal Government

by Robert Reich

Tuesday, September 14, 2010

 

Newt Gingrich is saying if Republicans win back control of Congress and reach a budget impasse with the President, they should shut down the government again. GOP pollster Dick Morris is echoing those sentiments, as is Rep. Lynn Westmoreland (R. Ga), and Alaska GOP Senate candidate Joe Miller.

I am continuously amazed at the GOP’s ability to snatch defeat out of the jaws of potential victory. It is the gift that keeps giving.

I was there November 14, 1995 when Newt Gingrich pulled the plug on the federal government the first time. It proved to be the stupidest political move in recent history. Not only did it help Bill Clinton win reelection but it was a boon to almost all other Democrats in 1996 (Gingrich’s photo was widely used in negative ads), and the move damaged Republicans for years.

Gingrich hurt his cause by complaining that Bill Clinton had put him in the back of Air Force One on a trip that occurred about the same time. Republican lore has it that it was this babyish behavior rather than the shutdown itself that caused the public to side with Clinton in the game of chicken Gingrich launched over the budget. Undoubtedly Gingrich’s whining didn’t help, but it was his cavalier attitude toward government itself that was the defining issue. Gingrich was the one who first bragged he’d shut down the government if Clinton didn’t agree to what the Republicans wanted.

Now, remarkably, Gingrich is back at it.

Dick Armey says it’s “premature” to talk about doing any such thing. What Armey means is if the public sees Republicans already plotting a shutdown, they’ll react even more angrily than they did fifteen years ago.

Americans may be cynical about government but we’re proud of our system of governance. And we don’t want it to be used as a political pawn in partisan power games. That’s what Republicans forget time and again. They dislike government so much they don’t see the difference between government as a bureaucracy and democratic governance as a cherished system.

The framers of the Constitution developed checks and balances to assure one branch didn’t accumulate too much power. But they never contemplated that one party could shut down the entire governmental system if it didn’t get what it wanted.

Queue Cutting in China Almost Sparks International Incident With Singapore

by An Nguyen

Below is a recent article, published by a Singaporean tourist to China. His viewpoint about the Chinese is very typical in Singapore. It’s funny to know that Chinese-Singaporeans are originated from different parts of China at one point or another, and yet, they always think that they are the most refined people amongst all the Chinese.

In Singapore, I encounter more ill manners, rude and inconsiderate Singaporeans every day, from all walks of life, than any countries that I’ve travelled to. Despite the fact that their government is spending a million dollars every year to teach them manners, how to be gracious, to respect one another, it’s not really working. Without the cane from the government to whip them in line, the Singaporean’s behavior is no better than any unrefined Chinese that this tourist encountered in the streets of China, or, in any third world countries.

Speaking of loyalty to Singapore, I’m not sure if this guy or most of his fellow countrymen are willing to stay and fight for his country if it’s attacked. Unlike the U.S.A., which embraces anyone who is in despair, hungry, or needs shelter, Singapore only welcomes people with talent and money. Blue collar foreign workers are dispensable, being treated like animals, and rejected by their society. Most foreigners are having problem integrating into Singapore’s society because of discrimination against them. It’s not surprising that a lot of people are also using Singapore for an economic transit point. They will leave if the offers are better elsewhere.

Here is the article (my apologies for the fact that my blogging software could not reproduce the Chinese characters. Fortunately, the writer duplicated everything in English):

My name is Tommy Su Handa and I am a Singaporean teacher working in Shanghai. I have just visited the Expo 2010 earlier today (4 Sept 2010) and it is with a grave heart that I am penning this letter.

I was just an unsuspecting tourist queuing up (I was with a friend, who is a local Shandong Chinese and he is willing to vouch for the authenticity of my report of what has transpired) at the Uzbekistan Pavilion today when a Chinese man about fifty years of age shoved me aside with a rough swing of his hand in the queue and progressed to shove others in front of me and disappeared amidst the crowd – a classic case of queue-cutting.

But the man is too fast for me to intervene. However, his daughter (photo shown below) and wife shortly followed behind and the daughter proceeded to attempt to shove me aside with her hands. I clutched on the railing, blocking her way with my body and said sternly, "Please do not cut queue!", refusing to let her shove me aside like her father.

So the girl (consecutively to be known as ‘G’ in the report below) immediately said, "Why is this fatty [Chinese derogatory term] doing this? i.e. stopping her from cutting queue). Her mother (hereby to be known as ‘M’ in the report as follows) said, "Why is this ‘dead’ [derogatory term of added insult] fatty so serious? Will he die just by letting one person pass?" [hello? This is a family of three, apparently she was unable to count]

Indeed, I will not die letting a few people cut queue and pass by. But growing up in a country that does not have any natural resources has instilled in me an earnest respect for rules and laws and a topic of insult at all so I have no idea why they have started to attack the English standards of my fellow countrymen all of a sudden.

M: Yes! Singaporeans are miserly, stupid and inflexible; can’t even let others cut queue for a bit! You deserve to work hard without earning much. You’re all poor blokes but pretend to be so high and mighty! Singaporean men are not men at all. The whole country is good-for-nothing!

I: How can you insult my country? You started calling me names for no reason other than the fact that I refused to let you cut the queue. I tried to avoid further confrontation by keeping silent but now you insult my country? You were in the wrong first for attempting to cut queue, how can you bring yourself to make such a din now? Are you not embarrassed at the scene you are causing?

How did I refrain from using harsher language than this to protect my country? This is all thanks to my Singaporean upbringing and my personal dedication to my profession as a teacher. I constantly remind myself that I cannot afford to risk compromising my public conduct and decorum.

G: But you scolded China! So why can’t I insult your country?

I: When did I scold China? If I have been unhappy with China, how could I have worked so many years in this country?)

The mother started raising her voice, hoping to get the other Chinese people to support her.

M: Who said you didn’t scold China? We are Chinese, you scold China when you scold us!!! You scolded China!!! WE ARE CHINESE!!!

The girl looked around for support and tried to fuel her mother’s ridiculous accusation and inflame the general public.

G: Yes! What right do Singaporeans have to look down on us? What right do you have to scold us? What right do you have to scold China?

For the life of me, I really did not understand how the matter aggravated to my “looking down” on her and her country! Honestly, I firmly maintain that I have not in any way tried to aggravate the matter with any negative feelings or emotions. I merely wanted them to stop harassing me but they were bent on elevating the quarrel into a public dispute by fabricating lies and inciting anger in the other people in queue. Luckily the general public was very clear-minded and no one helped the unruly women to bully me. If I had said anything inappropriate, I would have been swarmed and probably attacked by the other Chinese – and I would have deserved that. The truth was I didn’t get swarmed nor yelled at by the general public: which was proof that I did not say anything that would undermine Singapore’s friendly ties with the general Chinese populace.

Sensing no support from the others, the mother was getting hysterical for no reason and started physically slapping me at the mid-riff with her fan, saying:

M: Yes! This is China, you are not welcome here! This is our country, roll back to your Singapore!

G: Bye bye, yeah, roll back home!

The mother continued to bodily slap me with her fan, until my local China friend (to be known as ‘F’) spoke up for me,

F: You are not Chinese people anymore! You have rushed at the first opportunity to renounce your Chinese citizenship to become Singaporean ‘flatulence’, what kind of Chinese are you? If you hate Singapore so much, why shamelessly beg for its PR-ship?

My friend really made a good point and a cat immediately caught the unruly woman’s tongue.

M: I, er, we… we’re there only for economic gains! Singaporeans are stupid! It is easy to make money there!

This is where I really feel that I have to speak to the leaders of my country: the women who were scolding me in public have no love for my country but have been approved PR-ship to come in to fleece money from my countrymen. They are here only for economic gains. How did they ever earn PR-ship from such base sentiments?

Sensing the disapproval and despise the other Chinese people were showering on them, the daughter tried to change the topic of attack:

G: (Ya, Singaporeans are so stupid and they still dare to scold China!)

I: When ever did I scold the Chinese people and China? Look at the other Chinese people queuing up now: these are civil people with a sense of decorum. If all the other Chinese people were queue-cutters like you, there would be unimaginable chaos for 13 billion people and the Expo wouldn’t have happened. You have given up your Chinese citizenship and you have no right to bring shame to China from your personal misconduct. China would not want citizens like you, and Singapore would never welcome unruly people like you! You have no proper reason or excuse to continue making this scene, when are you ever going to finish?

And so the mother, knowing that she has neither excuse nor reason, stooped to hurling a series of Chinese obscenities at me. With my last retort questioning her non-existent national alliance and shamelessly untrue pledge of loyalty, I felt I have made my case and I have refused to further respond to her and continued with the queuing despite the continued insults and taunts behind my back. Eventually we reached the entrance of the Uzbekistan Pavilion and I thought I could finally rid myself of this unruly pair behind me.

However, they suddenly proclaimed that they intend to follow us for the whole day in the Expo grounds so that they can continue to scold us! Now this is absolutely unprovoked bullying and an outright case of harassment bordering on felony.

My friend stared at disbelief at the extent of their bullying and said,

F: you can follow us and scold us all you want! We won’t care! If you think your unruly and unreasonable scolding can somehow even restore a tinge of your sense of shame…

I must say that my friend is quite capable of stumping her to silence for a while. But her daughter continued to verbally insult me and my country – and also bodily slap my back with her fan. The pair continued to harass us.

I could take the harassment no more, and so I took out my mobile phone and told them I would take pictures of their bullying and publish it on international social networks. They immediately started slapping my hand and mobile phone to stop me from taking pictures, which was why the photos taken were so grainy. They then retaliated by also taking pictures of us. I started to threaten them that I would call the local police if they do not stop harassing us. That was when they ran away from us.

My friend and I then proceeded to view the exhibits in the Uzbekistan pavilion, but the two women started to follow us, from a distance, with their cameras and persisted with their silent but nonetheless continued harassment from a distance. This went on for the next 30 minutes while we viewed the exhibits until I finally lost my control, walked up to them and yelled at them and their cameras,

I: You cut queues and yet you scold others! Now you continue to bully and harass us! You are ‘dirty’ queue-cutters! You are ‘dirty’ queue-cutters!

I deeply regret the slightly coloured insult I finally flung at them, to which they have no doubt recorded on their camera. But I am no saint, and I dare request to step forward anyone who could have put up with such persistent taunting and bullying, physically and psychologically, of one’s bodily person and country without coming to physical blows and resorting to more colourful vocabulary. The slightly coloured insult was childish, but was the meanest I ever had to be in my entire life in face of such unprovoked unruliness.

It is beyond the shadow of doubt that these two women have lived for some time in Singapore and have unquestionably been reminded and educated that their unruly ways of cutting queues, unprovoked taunting, persistent social bullying and harassment, and last but not least, the daughter’s total inability to communicate in simple English to save her life, are not socially acceptable in the Singapore community. They simply cannot function in Singapore and that has evidently caused them considerable stress.

I know for sure any self respecting Singaporean would openly request anyone who is cutting queue in Singapore to refrain from doing so – and the requests would be made politically correct to address the act of queue-cutting and would in no way be a personal attack. The chidings from my fellow Singaporeans, due to the women’s inability to comprehend simple English, must have definitely been wrongly misconstrued as “looking down on them” and had evoked grudge and malice.

Conveniently but inappropriately, they have chosen to unload all their grudge and malice on unsuspecting and innocent Singaporean tourists at the Expo grounds such as I. Their target was not specifically ME, but just their own twisted perception of Singaporeans! As a highly educated individual, how could I have not understood that? That was probably why I haven't punched the lights out of them for such barbaric bullying.

But I do worry: do the “Foreign Talents” recruited to my beloved Singapore really understand the basic common civility to integrate into the nation’s communities? If they harbour such grudge and malice to Singaporean citizens, why do they lust after our citizenship? What can they contribute positively to our nation if they pose such potentially hazardous social anomaly? I most certainly cannot imagine such unruly people to love and contribute to Singapore productively – and I do not see unruliness as a talent much needed by the nation. Moreover, I was shocked and aghast at the blatant lack of loyalty these new PRs have for my country.

Please understand that my intention for reporting this isolated case is by no means to cause a rift between China and Singapore. I respect China, have married a local Shanghainese woman, and have now a nine-month-old baby boy, testament of my love for this second home of mine. The greater general populace of the China has always warmed me on countless occasions of their willingness to work unconditionally and sacrifice unquestioningly to noble causes.

Here is one response to the above online letter:

Chinese are a whole lot of pragmatic, practical people. They are a hardy lot and can be found all over the world where there's money to be made with some of them even settling down for long term even in Africa and South America and overcome initial difficulties of strange culture and language. These type of people do contribute to the local economy as they add to the local economic statistics.

Today's Chinese are different from the past. They have a choice now, that is to stay or to leave their adopted countries. Spurred on by their booming economic opportunities in their motherland and sense of loyalty and pride, these first generation of emigrants do want to go back and contribute.

Although millions of young Chinese people dream of studying in America, the ones who actually get the opportunity don't necessarily want to stay in America after they graduate. In late 2008, the Chinese government launched an aggressive campaign to lure them back and is spending millions to entice accomplished investors, bankers, researchers and engineers to come home.

In the last two decades, an estimated 50,000 immigrants left the United States and returned to India and China. In the next five years, a projected100,000 more will make the return trip. A trickle is turning into a flood. Most of the present returnees are young, in their early 30s and nearly 90 percent had master’s or doctorate degrees.

Over back in Singapore, our government does not grant PRs or citizenship seemingly anyhow to applicants from China or to many other countries for this matter. Most of the ethnic Chinese PRs in Singapore hail from Malaysia. Many of them progress on to take up citizenship becoming first generation of Singaporeans in their family line.

Over the 10-year period to present, the number of Malaysia-born Chinese in Singapore (permanent residents and first generation Singapore citizens from Malaysia, combined) went up by 81,000, while that of China-born Chinese went up by just 13,000.

Hopefully, the new data may help correct a misperception on the ground.
This whole idea that we are being overwhelmed by mainland Chinese has no basis. The numbers should tell us that many from China are here only as foreign workers and, as the Prime Minister has said, we have to distinguish these workers from new immigrants.

There are good and bad from each country. In my work and travels, most of these foreigners I have to deal with in here or overseas, come across to me as intelligent, well mannered and polite. Of course, there is always the minority. However, I must add that we ourselves are not saints either. C'est la vie!!

China has 117 Billionaires, the Second Highest in the World After the U.S.

by John Lawrence

China has a lot of people living in poverty, but so does the US. In fact the US poverty rate is 15%. 1 in 7 lives in poverty in the US. However, China's poverty rate (surprise, surprise) is lower than that in the US. According to China's official statistics, the poverty rate fell from 53% in 1981 to 2.5% in 2005. Check out this reference to find out more about China's Poverty Alleviation Program. In contrast with the US where poverty is going up, poverty in China is going down as the government there has given a lot of attention to ameliorating the poverty rate over the last 30 years.

In addition to alleviating poverty and having the second largest group of billionaires in the world, China's government is the US' banker. I wrote a blog post 3 years ago, "Uncle Sam, Your Banker Will See You Now." The US goes further into debt to China with each passing month with a combination of trade deficits and money borrowed to finance the US government itself. While the Chinese government had a sovereign wealth fund of $332 billion at the end of 2009, the US has $11 trillion worth of debt. The Chinese government recently launched a $586 billion infrastructure initiative. The US by contrast has less than a tenth of that set aside for infrastructure development. China's plans for high speed rail dwarf America's efforts. While the US is having a Great Recession with abysmal growth rates and lousy job creation, China's economy is surging ahead with a growth rate of 10% per year.

 Clarissa Ward reports from Beijing:

"If charity cost nothing, the world would be full of philanthropists," Jewish proverb.

A brouhaha has been brewing in China amid rampant speculation that Chinese billionaires are dodging invitations to a banquet hosted by Bill Gates and Warren Buffett later this month… because they are nervous about being hit up for donations.

"Rich Chinese reluctant to meet with US barons. Guess suspect dinner invitations come with high price tag attached," one local headline blared.

Gates and Buffett, two of the richest men in the world, are heading to China later this month in an attempt to get the country's mega rich involved with their Giving Pledge. The initiative, which specifies that donors give at least half of their fortunes to charity, has had great success back home, with some 40 billionaires signing off and an estimated $600 billion likely to be raised.

According to this year's Forbes rich list, China has 117 billionaires, the second highest in the world after the U.S. Fifty of the country's super-rich were invited to the banquet.

"After the invitations were sent out, a number of people called to query if they would be asked to donate at the function. So far, a small group has turned down the invitations," said Ye Lei, the head of the foundation in China was quoted as saying.

Philanthropy is a relatively new concept to China, a country whose wealth is newly accumulated and whose social security system is stretched thin.

"Compared to the U.S., some wealthy people in China seem more concerned about their personal and children's well-being, partly because people tend to worry more about their own education, pensions and medical care," Jin Jinping, director of the center for nonprofit organizations law at Peking University, told the China Daily.

Among those who did accept the invitation, Zhang Zin, CEO and co-founder of real estate behemoth SOHO, Wang Chuanfu, the head of car and battery maker BYD and the richest man in China, and Chen Guangbiao, a Chinese entrepreneur well known for his generosity.

On his website, Chen wrote an open letter to Gates and Buffett, saying that he was "greatly moved" by the duo's commitment to charity and that less than 1 percent of China's wealthy elite give part of their fortune away and that. He also pledged to donate his entire wealth, estimated at $735 million, to charity when he dies.

Jesse Jackson Channels Progressive Robert LaFollette; Calls for Economic Justice, More Jobs

Published on Sunday, September 12, 2010 by The Nation

Bring the Troops Home, Bust the Banksters, Democratize the Economy

by John Nichols

 BARABOO, WISCONSIN -- Decrying the excesses of big banks and Wall Street speculators, the Rev. Jesse Jackson told thousands of cheering progressives at a county fairgrounds in rural Wisconsin Saturday that: “There is a contest for the soul of America.

Cheered on by the crowd that had gathered for Fighting Bob Fest, the annual progressive chautauqua on the Sauk County Fairgrounds in this central Wisconsin community, the civil rights leader and two-time presidential candidate declared that America would have to choose between being of a country where a tiny elite controls the vast majority of wealth or one where the great mass of Americans have a chance to survive and thrive.

“We cannot subsidize bankers and leave people homeless on the streets of America,” Jackson said. “It’s time for a change!”

“We will fight back!” chanted the crowd, which packed the grandstand and field for one of the largest Bob Fest gatherings in the nine-year history of the event.

For Democratic strategists who worry about an "enthusiasm gap" in this year's mid-term election season, Jackson offered the antedote. His adamant address had thousands of people -- many of them from rural and smalltown Wisconsin -- on their feet and cheering. And this year's Fighting Bob Fest drew more than twice as many people as a highly publicized and expensively promoted "Tea Party" event -- which featured television personalies, "Joe the Plumber" and Congressman Paul Ryan, R-Janesville -- held the same day in Racine, Wisconsin.

The enthusiastic response for Jackson’s populist speech offered a reminder that there is no enthusiasm gap. There's a message gap.

When the message is muscular, the enthusiasm is there.

Jackson wasn't the only one drawing cheers on a day that heard rousing speeches from  former Texas Secretary of Agriculture Jim Hightower, Congressman David Obey, Congresswomen Tammy Baldwin and Gwen Moore, Democratic gubernatorial candidate Tom Barrett and other prominent speakers from Wisconsin and across the nation.

A Saturday that began with overcast skies and scattered rain showers ended with bright sunshine and a rollicking, old-school rallying of the progressive faithful in the tradition of Robert M. La Follette, the Wisconsin governor, senator and 1924 presidential candidate for whom the festival is named.

Jackson, who was honored with a lifetime achievement award by festival organizers, hailed the progressive movement led by La Follette, which campaigned for economic and social justice at home while opposing empire building abroad.

Sounding anti-war themes that were very much in the La Follette tradition, Jackson called for bringing U.S. troops home and reallocating resources from fighting wars abroad to fighting unemployment at home.

“We want for America what we provide for Iraq and Afghanistan,” said Jackson. “We want jobs for Chicago… jobs for Milwaukee… jobs for Sauk County.”

Sounding economic justice themes that repeatedly brought the crowd to its feet, Jackson warned that: “We’ve globalized capital without globalizing human rights, without globalizing workers’ rights, women’s rights, children’s rights. Let’s democratize our economy!

© 2010 The Nation

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

Corporate Agriculture Produces Food Borne Disease. Buy Locally Produced Food Instead.

Published on Monday, September 13, 2010 by CommonDreams.org

The Good Food Evolution

by Grace Lee Boggs

"Every year 76 million cases of foodborne illnesses occur, leading to about 300,000 hospitalizations and 5000 deaths." (New York Times, Sept. 4, 2010)

That's because most Americans still believe we have no alternative to the food produced by agribusinesses who care as little about our health as they do about the health of the chickens, turkeys, cows and pigs, so tightly packed in pens and cages on factory farms that the floor is scarcely visible, and where visible, is covered with excrement.

Fortunately, another healthier agriculture has been emerging in the last few decades.

This good food evolution has usually been started by grassroots individuals who grew up in rural communities and now live in cities.

In Detroit, for example, African American elders raised in the South saw the vacant lots in our deteriorating neighborhoods not as blight but as opportunities to plant community gardens that would also give city kids a sense of the time and patience that are a normal part of country life and that human beings now need for our continuing evolution. Detroiter Gerald Hairston, who grew up in W.Virginia. brought these elders together, and called them "Gardening Angels."

When we started Detroit Summer in 1992, a program to involve Detroit youth in rebuilding, redefining, and respiiriting Detroit from the ground up, these Gardening Angels provided the agricultural experience and skills needed to reconnect city youth with the Earth. Out of this reconnection of country and city, of oldsters and youngsters, the Detroit urban agricultural movement was born.

Now there are at least 1300 community gardens in Detroit, and almost every week another producer or writer requests our participation in a news feature or documentary highlighting the role of urban gardening in the rebirth of Detroit.

The weekend of September 10-12, people from all over the country and world, including a delegation of Detroit urban gardeners, attended a Good Food revolution conference at the Wisconsin State Fair Park in Milwaukee, convened by Growing Power.

Growing Power was founded by Will Allen, the son of a South Carolina sharecropper and the first African American to play on the University of Miami basketball team, who never forgot that the people in rural Maryland where he grew up always had plenty to eat ,even if they lacked fancy clothes. So when he retired from pro basketball, he bought a few acres in Milwaukee, and founded Growing Power.

Today this farm and community food center provides fresh produce for thousands of Milwaukee residents, attracts visitors from all over the world to its workshops in urban agriculture and aquaculture, and has inspired the many neighborhood gardens and small businesses that are at the heart of Milwaukee's Renaissance.

The May 2010 issue of TIME Magazine included Will among the world's 100 most influential people.

At the September 10-12 Conference, delegates shared information about how to create a new food system that builds better health and more closely-knit communities. Workshops were given in Urban and Small farming, Urban Aquaculture, Brownsfield Development, Renewable Energy and Experiential Education to involve schoolchildren in the movement for more nutritious food.

Among the speakers were Will Allen, Winona LaDuke, an Objibwe activist who is executive director of Honor the Earth, Children's Health specialist Dr. Judith Palfrey, and myself, who spoke via Skype from Detroit.

The Good Food evolution is an inspiring example of the "Next American Revolution." It's been a "Quiet Revolution." People have been simply exercising the power we have within ourselves to live more simply for the sake of our own physical and spiritual health and the health of the Earth and other living things.

But the Milwaukee conference makes clear that this evolution is gathering momentum. It is an idea whose time has come.

Grace Lee Boggs has been an activist for more than 60 years and is the author of the autobiography Living for Change.

US Poverty Rate Expected to Post a Record Increase

Published on Sunday, September 12, 2010 by the Associated Press

Overall number could reach 15%, demographers say

by Hope Yen

WASHINGTON - The number of people in the United States who are in poverty is on track for a record increase on President Obama's watch, with the ranks of working-age poor approaching 1960s levels that led to the national war on poverty.

Census figures for 2009 - the recession-ravaged first year of the Democrat's presidency - are to be released this week, and demographers expect grim findings.

It's unfortunate timing for Obama and his party just seven weeks before midterm elections in which control of Congress is at stake. The anticipated poverty rate increase - from 13.2 percent to about 15 percent - would be another blow to Democrats struggling to persuade voters to keep them in power.

"The most important antipoverty effort is growing the economy and making sure there are enough jobs out there,'' Obama said Friday at a White House news conference. He stressed his commitment to helping the poor achieve middle-class status and said, "If we can grow the economy faster and create more jobs, then everybody is swept up into that virtuous cycle.''

Interviews with six demographers who closely track poverty trends found wide consensus that 2009 figures are likely to show a significant rate increase to the range of 14.7 percent to 15 percent.

Should those estimates hold true, some 45 million people in this country, or more than 1 in 7, were poor last year. It would be the highest single-year increase since the government began calculating poverty figures in 1959. The previous high was in 1980 when the rate jumped 1.3 percentage points to 13 percent during the energy crisis.

Among the 18 to 64 working-age population, the demographers expect a rise beyond 12.4 percent, up from 11.7 percent. That would make it the highest since at least 1965, when another Democratic president, Lyndon B. Johnson, launched the war on poverty that expanded the federal government's role in social welfare programs from education to health care.

Demographers also are confident the report will show:

■ Child poverty increased from 19 percent to more than 20 percent.

■ Blacks and Latinos were disproportionately hit, based on their higher rates of unemployment.

■ Metropolitan areas that posted the largest gains in poverty included Modesto, Calif.; Detroit; Cape Coral-Fort Myers, Fla.; Los Angeles, and Las Vegas.

"My guess is that politically these figures will be greeted with alarm and dismay but they won't constitute a clarion call to action,'' said William Galston, a domestic policy aide for President Bill Clinton. "I hope the parties don't blame each other for the desperate circumstances of desperate people.''

Lawrence M. Mead, a New York University political science professor who is a conservative and wrote "The New Politics of Poverty: The Nonworking Poor in America,'' argued that the figures would have a minimal impact in November. "Poverty is not as big an issue right now as middle-class unemployment. That's a lot more salient politically right now,'' he said.

But if Thursday's report is as troubling as expected, Republicans in the midst of an increasingly strong drive to win control of the House, if not the Senate, would get one more argument to make against Democrats in the campaign homestretch.

The GOP says voters should fire Democrats because Obama's economic fixes are hindering the sluggish economic recovery. Rightly or wrongly, Republicans could cite a higher poverty rate as evidence.

Democrats almost certainly will argue that they shouldn't be blamed. They're likely to counter that the economic woes - and the poverty increase - began under President George W. Bush with the near-collapse of the financial industry in late 2008.

Although that's true, it's far from certain that the Democratic explanation will sway voters who already are trending heavily toward the GOP in polls as worrisome economic news piles up.Hispanics and blacks - traditionally solid Democratic constituencies - could be inclined to stay home in November if, as expected, the Census Bureau reports that many more of them were poor last year.

Beyond this fall, the findings could put pressure on Obama to expand government safety net programs ahead of his likely 2012 re-election bid even as Republicans criticize him about federal spending and annual deficits. Those are areas of concern for independent voters whose support is critical in elections.

Experts say a jump in the poverty rate could mean that the liberal viewpoint - social constraints prevent the poor from working - will gain steam over the conservative position that the poor have opportunities to work but choose not to because they get too much help.

"The Great Recession will surely push the poverty rate for working-age people to a nearly 50-year peak," said Elise Gould, an economist with the Economic Policy Institute. She said that means "it's time for a renewed attack on poverty."

To Douglas Besharov, a University of Maryland public policy professor, the big question is whether there's anything more to do to help these families.

The 2009 forecasts are largely based on historical data and the unemployment rate, which climbed to 10.1 percent last October to post a record one-year gain.

The projections partly rely on a methodology by Rebecca Blank, a former poverty expert who now oversees the census. She estimated last year that poverty would hit about 14.8 percent if unemployment reached 10 percent. "As long as unemployment is higher, poverty will be higher," she said in an interview then.

A formula by Richard Bavier, a former analyst with the White House Office of Management and Budget who has had high rates of accuracy over the last decade, predicts poverty will reach 15 percent.

That would put the rate at the highest level since 1993. The all-time high was 22.4 percent in 1959, the first year the government began tracking poverty. It dropped to a low of 11.1 percent in 1973 after Johnson's war on poverty but has since fluctuated in the 12-14 percent range.

In 2008, the poverty level stood at $22,025 for a family of four, based on an official government calculation that includes only cash income before tax deductions. It excludes capital gains or accumulated wealth. It does not factor in noncash government aid such as tax credits or food stamps, which have surged to record levels in recent years under the federal stimulus program.

Beginning next year, the government plans to publish new, supplemental poverty figures that are expected to show even higher numbers of people in poverty than previously known. The figures will take into account rising costs of medical care, transportation and child care, a change analysts believe will add to the ranks of both seniors and working-age people in poverty.

© 2010 Associated Press

Obama Must Draw the Line: Tax Breaks for the Middle Class; Raise Taxes on the Wealthy

by John Lawrence

President Obama wants to keep the Bush tax cuts for the middle class (anyone making less than $250,000) while letting the Bush tax cuts expire for the wealthy. He should stick to his guns on this if for nothing more than to establish the principle that not all tax cuts or increases are created equal which is what the Republicans would have you believe. The wealthy have gotten the largest share of the benefits from the Bush tax cuts. It's time to redress the situation giving the middle class a break, while not giving one to the upper class who made out like bandits during the Bush years. While middle class wages stagnated and the middle class lost ground, the rich surged ahead adding millions to their portfolios. The Bush tax cuts, which were unpaid for, have done significant damage to the government's deficit/debt situation, and letting them all expire would be the best thing as far as the soundness of the government's fiscal situation is concerned. However, keeping the tax cuts for the middle class will have a stimulative effect on the economy; keeping them for the upper class wouldn't.

Keeping the Bush tax cuts for millionaires and billionaires would effectively hand over to them an average of $100,000. each which they don't need, and it wouldn't create more jobs nor would it add significantly to GDP in terms of generating more consumption. In fact the proposed $300 billion tax incentives for business would not create many jobs either. Yesterday on Fareed Zakaria GPS former Obama budget director Peter Orszag said that business would use it to invest in more equipment like computers and software. Hmmm. I wonder why? Could it be that they want to automate and computerize in order to get rid of even more employees? The Obama administration should wise up and realize that the tax incentives that they're proposing will only result in more lost jobs rather than creating new ones. The only way any incentives will create jobs is to target those incentives specifically towards businesses that actually create jobs. In order not to be scammed those jobs should not disappear the minute the business has realized their tax cut. In other words it's not enough to create a job and then get rid of it the day after the business has gotten its tax cut. They need to be long term jobs.

Bush screwed the US government budget by (1) not paying for two wars, (2) not paying for the prescription drug benefit for seniors (which was a giveaway to the pharmaceutical companies) and (3) cutting taxes which resulted in an underfunding of the government and huge deficits with no concomitant job creation. Conservatives are supposedly worried about the deficit only not so when it comes to tax cuts for the wealthy. Then they're not worried at all. If the US government goes under at some time in the future, it will be largely attributable to the three unpaid for Bush budget busters listed above.  Why are all the Tea Partiers complaining about the national debt now instead of at the time of the Bush tax cuts which created most of it? Bush doubled the national debt from $5 trillion to $10 trillion. And they want to have their cake and eat it too. They don't want to pay taxes, but they want to decrease the debt? Can't do it except by cutting government programs like social security and Medicare or else cutting the Defense budget which is out of control. The added intelligence bureaucracy since 9/11 takes up 17 million square feet, three times the square footage of the Pentagon itself! The US has approximately 1000 military bases in practically every country of the world. Can you say overextended? Let's try cutting there first. But conservatives don't want to cut the military-industrial complex budget which after all is the biggest jobs program in the US. And they don't want to raise revenues. All they talk about is getting rid of social security, Medicare, unemployment, welfare, public schools and public services like firemen and policemen. Not to worry they say. Just hire a private security guard and send your kids to private schools.

The US is losing out on $100 billion in revenue every year because of all the money parked offshore by the wealthy and corporations. How about recouping that money? A financial transactions tax would bring in even more money while not causing loss of jobs or affecting any kind of stimulative effect to the economy. The financial casino, which is what Wall Street is, gets away with paying less in taxes than middle class wage earners. Just ask them about "carried interest." Obama has to at least draw a line in the sand regarding these issues instead of caving to Republicans who want to create the impression that it's all or nothing when it comes to tax cuts or tax increases. You can cut taxes for the middle class and raise them on the wealthy. You can cut taxes on wage earners while raising them on hedge fund managers and Wall St executives. You can stimulate the economy and raise taxes on the wealthy. You can create demand and raise taxes on those who have so much money that giving them a tax break would not cause them to go out and spend it thereby creating any demand. In other words giving tax breaks to the wealthy will not create any more demand; giving tax breaks to the middle class and the poor will.

Obama needs at least to educate the American people with regard to these principles instead of letting right wing talk radio and Fox news miseducate and mislead them. He needs to draw a line in the sand. Tax cuts for the middle class does not mean that you also have to give a tax cut to the wealthy. Raising taxes on the wealthy does not mean that you also have to raise them on the middle class. One of Obama's mistakes was the first stimulus package which was short on direct investment in the economy and long on tax cuts. It should have been the other way around. And the most stimulative thing he could do would be to create a Works Projects Administration (WPA) style program similar to what FDR did in the 1930s.  Between 1935 and 1943, the WPA provided almost eight million jobs. Within ten days after being introduced to Congress the Act authorizing the Civilian Conservation Corps (CCC) was signed on 31 March 1933. By April 5 FDR had signed an executive order establishing the organization, and by April 7 they had their first enrollee. By April 17 they had established their first camp. They need to have this sense of emergency now and create a direct jobs program as expeditiously as FDR did. The problem is there's no political consensus about doing so. But FDR had his enemies too, the "economic royalists" which he railed against. Bring 'em on, FDR said. Obama should explore establishing a WPA and CCC by executive order bypassing Congress and Republican filibusters which have brought democracy to its knees.

Now we hear that there are two months till elections and Obama can't possibly hope to have any effect on the economy despite his proposal for $50 billion in infrastructure spending and $300 billion in targeted tax cuts for business. Nonsense! FDR got the CCC up and running and people employed in less than a month! Obama's big mistake with regard to the economy was to think that in this day and age even in a Great Recesssion, programs like the CCC and WPA, in other words direct government intervention in the economy in order to create jobs, weren't necessary. He has let Republicans convince him that most of what was necessary was tax cuts and giving hundreds of billions of dollars to Wall St banks. This has turned out to be a big mistake. In Obama's defense we don't have a 25% unemployment rate, but that's only because unemployment has been redefined so as not to reflect the true unemployment rate. Each month millions are arbitrarily eliminated from the labor force despite their not having jobs in order to make the unemployment rate lower and the government look better. This has been sold as the fact that these people were no longer looking for work according to the government's definition of "looking for work." Would they take a job if one were offered to them? You bet they would.

What is this nonsense that people shouldn't be counted as unemployed unless they are "looking for work" according to the government's narrow definition? If they are not working, how can they pay their mortgage or pay rent? How can they pay for food or utilities? They can't. So the only people who are truly not looking for work are the homeless, and even most of them would take a job if it were offered to them. The permanently unemployed are bound to be eventually living on the streets or on the charity of family members. So when you hear some government functionary say that there are those who are not counted in the labor force because they are not looking for work, think 'the homeless' because that's the state anyone without a job will eventually find themselves in unless they are lucky enough to be receiving unemployment, welfare or charity from their family. And if the Republicans take over, they will redefine 'unemployment' so that the unemployment rate as defined by them will go back to normal while tens of millions remain unemployed. In absolute numbers there are more unemployed now than during the Great Depression.

The fact of the matter is that inequality in the US has never been greater than it is today except during the Great Depression. The fact is that US businesses are sitting on $2 trillion in cash. They don't need more tax breaks. The fact is that corporations and the wealthy are parking their money offshore thereby avoiding taxes. The fact is that there is a lack of demand because American consumers are tapped out and are trying to pay down their debts instead of buying more trinkets made in China. Others have lost jobs and houses to foreclosure and have no money to spend. What Obama needs to do is to recreate FDR style direct spending programs, and in the interests of fiscal responsibility, he needs to pay for them not by borrowing more money and creating more government debt but by initiating new taxation programs on the rich and on rich Wall St banks which represent 20% of the economy. He also needs to eliminate government subsidies to large and immensely profitable corporations like Exxon Mobil which make tens of billions in profits and still receive government handouts because they can pay lobbyists to make sure that they go on receiving them. If Obama does nothing else in his last two years as President, he can at least use the bully pulpit to make it abundantly clear how Republicans, Tea Partiers, right wing billionaires like the Koch brothers, talk show hosts like Beck and Limbaugh and demagogues like Palin are trying to pull the wool over the eyes of the American people. His job should be to shed light and pull the scales back from American eyes and use executive orders to directly create jobs repairing infrastructure and ameliorating the environment as FDR did with the WPA and CCC.

 

 

The Two Categories of American Corporations — And Their Politics

by Robert Reich

Sunday, September 12, 2010

Some giant American corporations depend on a buoyant American economy and a world-class industrial base in the United States. Others are far less dependent. What comes out of Washington in the next few years will reflect which group has most political clout — especially if Republicans take over the House and capture more of the Senate this November.

The first group includes national telecoms like Verizon and AT&T that need a prosperous America because most of their sales are here. Same with finance companies like Bank of America and Travelers Insurance whose business strategy has been built around U.S. consumers. Ditto certain giant chains like Home Depot. Naturally, all these companies were especially hard hit by the Great Depression and its devastating impact on American consumers.

The second group includes companies like Coca Cola, Exxon-Mobil, Hewlett-Packard, Intel, and McDonalds, that get substantial revenues from their overseas operations. Increasingly this means China, India, and Brazil. Ford and GM are still largely dependent on US sales but becoming less so. GM sold more cars in China last year than in the US. Not surprisingly, American companies that are less dependent on American consumers have been showing the biggest profits. 

Wall Street gets this. Viewing the 30 giants that make up the Dow Jones Industrial Average, analysts are predicting that the 10 with the largest portion of sales inside the U.S. will show average revenue gains of just 1.6 percent over the next year, while the 10 with the largest portion of their sales abroad will grow by an average of 8.3 percent. 

So what does this mean for politics? Big companies hedge their bets and support both Republicans and Democrats. But in my experience, companies in the first group are more responsive to tax, spending, and monetary policies that cause unemployment to drop and wages to grow, and less obsessed by inflation and deficits, than are companies in the second group. The former are also more supportive of new investments in infrastructure and education, which improve U.S. productivity over the longer term. 

The problem is, more and more big companies are moving into the second category because that’s where the markets and the money are. Years ago groups like the Business Roundtable consisted mostly of large American corporations that were indubitably American, and took largely progressive positions on U.S. jobs and wages. I remember working with the National Association of Manufacturers on measures to improve U.S. education and job training. The American Electronics Association pushed the Reagan Administration for an industrial policy to preserve the nascent industrial base of U.S. computing. 

No longer. Large American corporations are going global as fast as they can. That’s good for their shareholders. But in a Washington ever more susceptible to their money and influence, it’s not necessarily good for American workers.

Europe Is More Entrepreneurial Than US Despite Having Much Better Safety Nets

by John Lawrence

Due primarily to the work of David Birch  Job Creation in America: How Our Smallest Companies Put the Most People to Work [1987], government has been convinced that most jobs are generated by small business. That's why government policies have favored giving tax breaks and other subsidies to small business. But wait; does small business really create more jobs than other sectors? Recent work suggests otherwise. Birch provided the first evidence in support of the argument that small businesses are the primary engines of job growth, claiming that 66% of all net new jobs in the United States during 1969-1976 were created by firms with 20 or fewer employees and 81.5% were created by firms with 100 or fewer employees.

This is from the report, "Do Small Businesses Create More Jobs?" by Neumark, Wall and Zhang:

Birch’s argument about the important role of small business in job creation fit perfectly with the U.S. government’s long tradition of supporting small businesses. As early as 1953, the U.S. Congress passed the Small Business Act with the intention to aid, counsel, assist, and protect the interests of small businesses. Under this act, the federal government established the Small Business Administration to ensure that a fair proportion of government contracts went to small businesses. The Small Business Administration also makes direct loans and guarantees bank loans to small businesses, based on the perspective that assisting small businesses is important to preserve free competitive enterprise and to maintain and strengthen the U.S. economy. Birch’s findings fed into this thinking and quickly became conventional wisdom. Since then, his findings have often been cited as justification for favorable government regulations, tax incentives, and support programs for small businesses.

One important thing to consider (which is entirely glossed over by the main stream media) is the concept of net job creation. In the paper referenced above they make the distinction between gross job creation, gross job destruction and net job creation which is the difference between the two. So when we hear it reported that there were 67,000 private sector jobs created last month, is that gross or net? They never say. When the government says that they "saved" 3 million jobs, is that gross or net? They never say so I assume that they want to put the rosiest face on the statistics and, therefore, it's probably gross. The net job savings could be anything. Each month jobs are both created and destroyed. Therefore, it's important to know the difference between the two or net job creation. Any other figure is BS. If they tell you how many jobs were created without also telling you how many jobs were destroyed, you essentially know absolutely nothing about jobs and the economy.

The Neumark paper took a critical look at Birch's contention that most new jobs are created by small business. What they found is that, although small firms are responsible for a disproportionate share of job creation, they are also responsible for a disproportionate share of job destruction. This makes sense since a lot of start-ups go out of business which results in gross job destruction. So net job creation by small business is a lot smaller than previously thought. Also large businesses, while responsible for creating proportionately fewer jobs are also responsible for destroying proportionately fewer jobs so that their net job creation data looks more favorable than previously reported.

Nevertheless, Neumark et al did find that in general small businesses create more net jobs than large businesses although not to the extent that Birch originally indicated. They also verified that the manufacturing sector is losing jobs while the service sector is gaining them. 

Another report, European SMEs Under Pressure, Annual Report on Small and Medium-Sized Enterprises 2009, asks the same questions about job creation in Europe.

Between 2002 and 2008, SMEs [Small and Medium Enterprises] in the EU-27 grew strongly and turned out to be the job engine for much of the European Economy. The number of SMEs increased by 2.4 million (or 13 %), whereas the number of large enterprises increased by only 2000 (or 5 %). This growth was also reflected in employment figures. On average, between 2002 and 2008, the number of jobs in SMEs increased by 1.9 % annually, while the number of jobs in large enterprises increased by only 0.8 % annually. In absolute numbers, 9.4 million jobs were created in the SME-sector between 2002 and 2008.

Interestingly, while Europe was creating 9.4 million jobs, the US, during the Bush administration in roughly the same period, created only 3 million. So Europe created 3 times the number of jobs as the US in the period immediately preceding the Great Recession. Similar to the US, Europe's small and medium enterprises create more jobs than do large scale enterprises. Entrepreneurialism is just as important in Europe as it is in the US contrary to popular myth about Europe's "welfare" societies. SMEs are defined as businesses which employ less than 250 persons.

In 2008, there were over 20 million enterprises in the European Union. Only about 43,000 were large scale enterprises (LSEs). Hence, the vast majority (99.8 %) of enterprises in the EU are SMEs. The vast number of employed people in Europe are employed in micro enterprises (less than 10 people) which comprise 92% of total enterprises and 30% of employees.  

Contrary to popular belief, more people in Europe are employed in small scale enterprises than in the US. In the US 22% are employed in micro enterprise; 30% in Europe. In the US 14% are employed in small business vs 21% in Europe. For SMEs (comprising micro and small business enterprises) the figures are 53% in the US, 67% in Europe. As a contrast 47% are employed in large scale enterprises in the US vs 33% in Europe. A case could be made that Europe is a more entrepreneurial society than the US based on these figures.

In the US from 2002 to 2006, firms with 100-499 employees contributed the most to employment growth whereas in Europe SMEs have been the job generators. Thus in the US, contrary to popular belief, it is the medium and large scale enterprises that have added the most to employment growth in recent years. Remember that enterprises with more than 250 employees are LSEs.

Because a lack of market demand is now the major problem for SMEs, the need for stimulating demand should be a prime concern for European policy makers. Given the large government budget deficits, increasing government expenditures or lowering taxes are not very realistic options for most countries. However, measures to facilitate and promote exports would directly support SMEs that export their products or are subcontractors to exporting businesses. In addition, as exports now are a major engine of the economic recovery, many more SMEs will indirectly benefit from
such policies. In the US due to free trade policies, exports are lagging badly behind imports with the result that the US is running staggering trade deficits.

Over 2009 and 2010, the EU-27 SMEs are estimated to have shed a total of 3.25 million jobs. This is far less than the number of jobs shed in the US during that period which amounted to around 8 million.

Access to finance is not the main problem for SMEs in the EU. Since demand for products and services of firms have decreased sharply during the crisis, many firms do not feel the need to invest, and hence do not apply for bank loans.  About half of euro area SMEs
reported no major change in financing needs in both the first and the second half of 2009. The most pressing problem facing euro area SMEs in the first half of 2009 is ‘finding customers’ or in other words, demand. This is true also in the US. Access to finance is the second most important problem. Indeed, a UK survey among 800 SMEs interviewed between November-December 2008 finds that in 2008, market demand constraints are regarded 94% higher than finance constraints. Also in the US poor sales are currently a more important problem than access to credit especially since US corporations are sitting on $2 trillion in cash.

These two reports suggest that not only is Europe in general more entrepreneurial than the US due to its small and micro enterprises employing relatively more people, but also it didn't lose as many jobs during the recession and created many more jobs than the US in the years just preceding the recession. One of the ways jobs were saved during the recession was to cut back on work hours with the government subsidizing the paychecks of workers to make up the difference. This was considered to be more desirable than paying unemployment compensation to laid off workers.

 

Slaan Twee Vliegen in Een Klop

John,

Robert Reich often repeats the obvious to some of us who've been saying the same for a long time now ... like, for example, that the economic problems in America are structural not cyclical.  Still, I can appreciate the value of Reich's repetitive style to open minds to how things are much worse than people admit. The general public's perceptions and misperceptions, beliefs and expectations might become wiser by listening to some contrary insights and observations. In his weekly writings lately, Robert Reich, in plain everyman's English, has been making some sound points while also modestly promoting his forthcoming book. There's a Dutch expression for this communication or behavioral style, "Slaan twee vliegen in een klop," i.e., "Hit two flies with one blow."
                                                                                                                                                                I do find this material money accent a little irritating. It tests the impression that Reich is as much interested in bringing attention to his book sales as to his weekly writings. But economists can be assertive, self-interested  capitalists too. As a self-employed, independent businessman most of my life, benefiting from the liberty of entrepreneurial capitalism, I certainly wish Dr. Reich all success with his new book. Contrary, sensible voices like his with clear-cut opinions and nuanced versions of the complex realities relating to our nation's flagrant, systemic, macro-microeconomic dysfunctions are a breath of fresh air.

Concerning Reich's thoughts about income taxes, common sense says that lowering taxes for the middle class, eliminating payroll taxes on those earning less than $20,000, and raising taxes on the upper class -- while critically necessary for reasons economists like Reich note and the informed are well aware of --  will NOT be sufficient to regenerate our economy to a reasonably healthy state of 5-6% unemployment over the next 5 years. These tax cuts are needed just to offset the 30-year stagnant growth or better said -- non-growth -- in middle class wages. Also, consumers are beginning to recognize the game of being puppet-played as the consumption and debt-building suckers who can't refuse buying all those over-advertised gimmicky, trivial, kitsch products offered them at bargain basement prices for volume purchases. The growing Have Nots are learning that Consumption at 70% of GDP with six credit cards and no Savings is the road to penury that finances bigger castles and bonuses for the Haves!
                                                                                                                             In this connection, Obama's job creation initiative also fits the Dutch expression of "hit two flies with one blow." The $50 billion job stimulus program not only puts people back to work but also pute them back to work on basic, sustainable infrastructure projects -- as opposed to reliance on "make-work" projects. This will concurrently increase tax revenues, reduce unemployment compensation costs and, equally important, improve the nation's productivity. Of course, far right and centrist conservatives, under the duplicitous guise of being Deficit responsible, will defeat Obama's job development efforts in just another "shoot-yourself-in-the-foot" step in order to turn the tide against Obama's Administration in the November elections. Then, they will take an about face and proceed to initiate the job growth spending actions Obama's team wants to put in motion now. And in this process, the newly elected and new-born conservatives will proudly crown themselves as the common man's capitalist saviors ... while lowering taxes for the rich.
                                                                                                                                It comes down to being a fool for allowing oneself to be fooled. If this happens, one can always take comfort in the thought that it's 'the fools who often form the overwhelming majority.'  As Huckleberry Finn said in Mark Twain's novel : " Hain't we got all the fools in town on our side? And ain't that a big enough majority in any town?"
                                                                             
How hypocritical, ineffective, and corrupt can our political system get? The answer is, you don't have to wait and see.  "It's structural not cyclical."

Best,
Frank Thomas

Is a College Education Really Worth It?

Some say bypassing a higher education is smarter than paying for a degree

By Sarah Kaufman

Friday, September 10, 2010 in the Washington Post

Across the region and around the country, parents are kissing their college-bound kids -- and potentially up to $200,000 in tuition, room and board -- goodbye.

Especially in the supremely well-educated Washington area, this is expected. It's a rite of passage, part of an orderly progression toward success.

Or is it . . . herd mentality?

Hear this, high achievers: If you crunch the numbers, some experts say, college is a bad investment.

"You've been fooled into thinking there's no other way for my kid to get a job . . . or learn critical thinking or make social connections," hedge fund manager James Altucher says.

Altucher, president of Formula Capital, says he sees people making bad investment decisions all the time -- and one of them is paying for college.

College is overrated, he says: In most cases, what you get out of it is not worth the money, and there are cheaper and better ways to get an education. Altucher says he's not planning to send his two daughters to college.

"My plan is to encourage them to pursue a dream, at least initially," Altucher, 42, says. "Travel or do something creative or start a business. . . . Whether they succeed or fail, it'll be an interesting life experience. They'll meet people, they'll learn the value of money."

Certainly, you'd be forgiven for thinking this argument reeks of elitism. After all, Altucher is an Ivy Leaguer. He's rolling in dough. Easy for him to pooh-pooh the status quo.

But, it turns out, his anti-college ideas stem from personal experience. After his first year at Cornell University, Altucher says his parents lost money and couldn't afford tuition. So he paid his own way, working 60 hours a week delivering pizza and tutoring, on top of his course load.

He left Cornell thousands of dollars in debt. He also left with a degree in computer science. But it took failing at several investment schemes, losing large sums of money and then studying the stock market on his own -- analyzing Warren Buffett's decisions so closely he ended up writing a book about him -- for Altucher to learn enough about the financial world to survive in it. He thinks he would have been better off getting the real-world lessons earlier, rather than thrashing himself to pay for school and shouldering so much debt.

It's cold comfort, but the loans put him in good company: Hundreds of billions of dollars of national student-loan debt has now overtaken American credit-card debt, the Wall Street Journal recently reported, using numbers compiled by FinAid.org, a Web site for college financial aid information.

"There's a billion other things you could do with your money," Altucher says. One option: Invest the money you'd spend on tuition in Treasury bills for your child's retirement. According to Altucher, $200,000 earning 5 percent a year over 50 years would amount to $2.8 million.

Few families have that kind of money lying around. But if you can give your child $10,000 or so to start his own business, Altucher says, your child will reap practical lessons never taught in a classroom. Later, when he's more mature and focused, college might be more meaningful.

* * *

The hefty price tag of a college degree has some experts worried that its benefits are fading.

"I think it makes less sense for more families than it did five years ago," says Richard Vedder, an economics professor at Ohio University who has been studying education issues. "It's become more and more problematic about whether people should be going to college."

That applies not just to astronomically priced private schools but to state schools as well, where tuitions have spiked. Student loans can postpone the pain of paying, but they come due when many young adults are at their most financially vulnerable, and default rates are high. Even community colleges, while helping some to keep costs down, prompt many to take out loans -- which can land them in severe credit trouble.

According to a report in the Chronicle of Higher Education, 31 percent of loans made to community college students are in default. (The same report found that 25 percent of all government student loans default.) Default on a student loan and face dire consequences, beyond a bad credit record -- which can tarnish hopes of getting a car, an apartment or even a job: Uncle Sam can claim your tax refunds and wages.

Now, take a key argument in favor of getting a four-year degree, the one that says on average, those with one earn more than those without it. Education Department numbers support this: In 2008, the median annual earnings of young adults with bachelor's degrees was $46,000; it was $30,000 for those with high school diplomas or equivalencies. This means that, for those with a bachelor's degree, the middle range of earnings was about 53 percent more than for those holding only a high school diploma.

But a lot of college graduates fall outside the middle range -- and many stand to make considerably less.

"If you major in accounting or engineering, you're pretty likely to get a return on your investment," Vedder says. "If you're majoring in anthropology or social work or education, the rate on return is going to be a good deal lower, on average.

"I've talked to some of my own students who've graduated and who are working in grocery stores or Wal-Mart," he says. "The fellow who cut my tree down had a master's degree and was an honors grad."

The unemployment rate among those with bachelor's degrees is at an all-time high. In 1970, when the overall unemployment rate was 4.9 percent, unemployment among college graduates was negligible, at 1.2 percent, Vedder says, citing figures from the Bureau of Labor Statistics. But this year, with the national rate of unemployment at 9.6 percent, unemployment for college graduates has risen to 4.9 percent -- more than half the rate of the general population. The bonus for those with degrees is "less pronounced than it used to be," Vedder says.

"The return on investment is clearly lower today than it was five years ago," he says. "The gains for going to college have leveled off."

Before hackles are raised about boiling the salutary effects of higher education down to its cost, there are obvious disclaimers: Education is a priceless thing. Many high-school graduates are not ready for independence and adult responsibilities, and college provides a safe place for them to grow up -- for a fee.

But what about the lessons offered by the success stories that have unspooled along a different path? Dropouts are the toast of the dot-com world. To the non-degreed billionaires' club headed by Microsoft's Bill Gates (Harvard's most famous quitter) and Apple's Steve Jobs (left Oregon's Reed College after a single semester), add: Michael Dell (founder of Dell Computers, University of Texas dropout), Microsoft co-founder and Seattle Seahawks owner Paul Allen (quit Washington State University) and Larry Ellison (founder of Oracle Systems, gave up on the University of Illinois).

Success sans sheepskin isn't only for the technology set.

David Geffen, co-founder of DreamWorks, bowed out of several schools, including the University of Texas.

Redskins owner Daniel Snyder dropped out of the University of Maryland.

Barry Gossett, chief executive of Baltimore's Acton Mobile Industries, builders of temporary trailers, also left Maryland without a degree. (No hard feelings, apparently: In 2007, he donated $10 million to the school.)

Perhaps these are unique individuals in whom a driving entrepreneurial spirit outstripped the plodding pace of book learning.

Or perhaps they point to a new model.

"There's nothing you can't do on your own," Altucher says. A provocative idea -- and a liberating one. Even if it's not entirely true.

But you don't have to agree with Altucher to concede that the debt-stress many graduates or their parents -- or both -- are left with after tossing off the cap and gown works against the merits of the degree.

Even if a kid doesn't party his way through college, chances are he or his family has plowed a boatload of money into a few memorable classes and a lot of boredom.

On top of that, you don't know how big a boatload it'll be. For many college students, four years of anticipated tuition payments grows to five years or six -- or more. Government statistics show just 57 percent of full-time college students get their bachelor's degrees in six or fewer years.

And the rest . . . don't.

* * *

In her youth, Toni Reinhart, 55, owner of Comfort Keepers Reston, a licensed home-care agency in Northern Virginia, abandoned hopes of completing a business degree at George Mason University. There was that C in accounting, and then trigonometry. . . .

"My problem was not being able to put the time in to learn things I wasn't interested in," she says.

Has dropping out held her back?

"Oh sure," says Reinhart, a self-described late-bloomer. "But maybe that's good. Maybe it held me back from things I shouldn't have been doing anyway."

Now she manages 56 employees and in recent years hit the million-dollar mark in gross revenue.

"I understand the case for finishing, because you've proven you can stick with something," she says. "But wouldn't it be nice if we did have another path that didn't put people in debt for . . . $100,000? Isn't there another way to instill those kinds of lessons in people that would be cheaper?"

Nelson Cortez, 20, wishes there were. The Napa resident starts his third year this month at the University of California at Santa Cruz. He's received state grants and works 15 hours a week while school is in session, but with the loans he's taken out, he estimates he's already about $25,000 in debt. This is why, when the California Board of Regents last year announced a 32 percent increase in fees, he joined protests that galvanized students around the state -- and set off similar protests around the country.

Cortez helped shut down the Santa Cruz campus and traveled to the District to rally outside the U.S. Capitol. (On Oct. 2, students will demonstrate on the Mall for affordable education as part of the One Nation march, organized by civil rights and youth groups and unions.)

"Rent was due yesterday, and I was $20 short, and I'm running around the house looking for $20," Cortez says. His money problems have caused him to question whether he's made the right decision: "Am I going to be able to afford it, should I take a semester off? . . . I do have in the back of my mind, would it be better not to have those loans and just work?"

According to the Education Department, between 1997-98 and 2007-08, prices for undergraduate tuition, room and board at public institutions of higher education rose by 30 percent, and prices at private institutions rose by 23 percent -- after adjustments for inflation. "The reason colleges have been getting away with raising their fees so much is that loans allow parents to tough it out," Vedder says.

Federal government moves, such as tuition tax credits, allow those paying college costs to subtract a certain amount from their tax bills. But it does little to alleviate the financial burden, Vedder says, adding that it gives colleges an excuse to raise costs further.

* * *

The cost of college is putting the financial screws to an entire generation, say student activists.

"I think it's absolutely despicable that students are asked to pay that much," says Lindsay McCluskey, president of the United States Student Association. "In terms of public education, you can't even call that public when students are taking out an average of $25,000 to complete college and then are paying off student loan debt until they're 50 or 60 years old."

A recent graduate of the University of Massachusetts Amherst, where she majored in anthropology, McCluskey is paying down a $20,000 student loan. She thinks it will probably take her a decade to dig out of that hole -- while the balance is accumulating interest -- because she can't afford to make more than the minimum monthly payments.

"For my generation," McCluskey, 23, says, "that loan debt is taking the place of the house we could be buying or a number of other investments we could be making in our lives. The loan debt just sucks a lot of that out."

Now consider Jeremiah Stone, 25. The graduate of Rockville's Thomas S. Wootton High School is living in Paris, pursuing a drool-worthy international career as a chef. After high school, he took a job as a barback in a Houston's Restaurant, worked up to kitchen assistant, took a nine-month cooking course at the French Culinary Institute in New York and finally landed in France, where he has freelanced as a chef throughout the country. Eventually he hopes to open his own restaurant in New York.

"People I meet for the first time, they're always saying, 'Oh, if I had another career, I'd be a pastry chef instead of becoming a lawyer,' " Stone says. In the eyes of some of his friends, he says, he's become emblematic of simply doing what you love. In his case, it turns out that not following the herd was the best investment of all.

Staff researcher Meg Smith contributed to this report.

Pakistan Disaster One Too Many for US Television

Published on Thursday, September 9, 2010 by TomDispatch.com

The Media as a Security Threat to America

The Great Pakistani Deluge Never Happened; Don’t Tune In, It’s Not Important

by Juan Cole

The Great Deluge in Pakistan passed almost unnoticed in the United States despite President Obama’s repeated assertions that the country is central to American security.  Now, with new evacuations and flooding afflicting Sindh Province and the long-term crisis only beginning in Pakistan, it has washed almost completely off American television and out of popular consciousness.

Don’t think we haven’t been here before.  In the late 1990s, the American mass media could seldom be bothered to report on the growing threat of al-Qaeda.  In 2002, it slavishly parroted White House propaganda about Iraq, helping prepare the way for a senseless war.  No one yet knows just what kind of long-term instability the Pakistani floods are likely to create, but count on one thing: the implications for the United States are likely to be significant and by the time anyone here pays much attention, it will already be too late.

Few Americans were shown -- by the media conglomerates of their choice -- the heartbreaking scenes of eight million Pakistanis displaced into tent cities, of the submerging of a string of mid-sized cities (each nearly the size of New Orleans), of vast areas of crops ruined, of infrastructure swept away, damaged, or devastated at an almost unimaginable level, of futures destroyed, and opportunistic Taliban bombings continuing.  The boiling disgust of the Pakistani public with the incompetence, insouciance, and cupidity of their corrupt ruling class is little appreciated.  

The likely tie-in of these floods (of a sort no one in Pakistan had ever experienced) with global warming was seldom mentioned.  Unlike, say, BBC Radio, corporate television did not tell the small stories -- of, for instance, the female sharecropper who typically has no rights to the now-flooded land on which she grew now-ruined crops thanks to a loan from an estate-owner, and who is now penniless, deeply in debt, and perhaps permanently excluded from the land.  That one of the biggest stories of the past decade could have been mostly blown off by television news and studiously ignored by the American public is a further demonstration that there is something profoundly wrong with corporate news-for-profit.  (The print press was better at covering with the crisis, as was publically-supported radio, including the BBC and National Public Radio.)

In his speech on the withdrawal of designated combat units from Iraq last week, Barack Obama put Pakistan front and center in American security doctrine, “But we must never lose sight of what’s at stake. As we speak, al-Qaeda continues to plot against us, and its leadership remains anchored in the border regions of Afghanistan and Pakistan.”  Even if Pakistan were not a major non-NATO ally of the United States, it is the world’s sixth most populous country and the 44th largest economy, according to the World Bank.  The flooding witnessed in the Indus Valley is unprecedented in the country’s modern history and was caused by a combination of increasingly warm ocean water and a mysterious blockage of the jet stream, which drew warm, water-laden air north to Pakistan, over which it burst in sheets of raging liquid.  If the floods that followed prove a harbinger of things to come, then they are a milestone in our experience of global warming, a big story in its own right.

News junkies who watch a lot of television broadcasts could not help but notice with puzzlement that as the cosmic catastrophe unfolded in Pakistan, it was nearly invisible on American networks.  I did a LexisNexis search for the terms “Pakistan” and “flood” in broadcast transcripts (covering mostly American networks) from July 31st to September 4th, and it returned only about 1,100 hits.  A search for the name of troubled actress Lindsay Lohan returned 653 search results in the same period and one for “Iraq,” more than 3,000 hits (the most the search engine will count).  A search for “mosque" and "New York” yielded 1,300 hits.  Put another way, the American media, whipped into an artificial frenzy by anti-Muslim bigots like New York gubernatorial candidate Rick Lazio and GOP hatemonger Newt Gingrich, were far more interested in the possible construction of a Muslim-owned interfaith community center two long blocks from the old World Trade Center site than in the sight of millions of hapless Pakistani flood victims.  

Of course, some television correspondents did good work trying to cover the calamity, including CNN’s Reza Sayah and Sanjay Gupta, but they generally got limited air time and poor time slots. (Gupta’s special report on the Pakistan floods aired the evening of September 5th, the Sunday before Labor Day, not exactly a time when most viewers might be expected to watch hard news.)  As for the global warming angle, it was not completely ignored.  On August 13th, reporter Dan Harris interviewed NASA scientist Gavin Schmidt on ABC’s “Good Morning America” show at 7:45 am.  The subject was whether global warming could be the likely cause for the Pakistan floods and other extreme weather events of the summer, with Schmidt pointing out that such weather-driven cataclysms are going to become more common later in the twenty-first century.   Becky Anderson at CNN did a similar segment at 4 pm on August 16th.  My own search of news transcripts suggests that that was about it for commercial television.

The “Worst Disaster” TV Didn’t Cover

It’s worth reviewing the events that most Americans hardly know happened:

The deluge began on July 31st, when heavier than usual monsoon rains caused mudslides in the northwest of Pakistan.  Within two days, the rapidly rising waters had already killed 800 people.  On August 2nd, the United Nations announced that about a million people had been driven from their homes. Among the affected areas was the Swat Valley, already suffering from large numbers of refugees and significant damage from an army offensive against the Pakistani Taliban in the spring-summer of 2009. In the district of Dera Ismail Khan alone, hundreds of villages were destroyed by the floods, forcing shelterless villagers to sleep on nearby raised highways.

The suddenly homeless waited in vain for the government to begin to deliver aid, as public criticism of President Asaf Ali Zardari and Prime Minister Yousuf Raza Gilani surged.  President Zardari’s opulent trip to France and Britain (during which he visited his chateau in Normandy) at this moment of national crisis was pilloried.  On August 8th in Birmingham, England, a furious Pakistani-British man threw both his shoes at him, repeating a famously humiliating incident in which an Iraqi journalist threw a shoe at President George W. Bush.  Fearing the response in Pakistan, the president’s Pakistan People’s Party attempted to censor the video of the incident, and media offices in that country were closed down or sometimes violently attacked if they insisted on covering it.  Few or no American broadcast outlets appear to have so much as mentioned the incident, though it pointed to the increasing dissatisfaction of Pakistanis with their elected government.  (The army has gotten better marks for its efficient aid work, raising fears that some ambitious officers could try to parlay a newfound popularity into yet another in the country’s history of military coups.) 

By August 5th, the floods had taken an estimated 1,600 lives, though some aid officials complained (and would continue to do so) that the death toll was far larger than reported.  Unlike the Haitian earthquake or the BP oil spill in the Gulf of Mexico, this still building and far more expansive disaster was initially greeted by the world community with a yawn.   The following day, the government evacuated another half-million people as the waters headed toward southern Punjab.  At that point, some 12 million Pakistanis had been adversely affected in some way.  On August 7th, as the waters advanced on the southernmost province, Sindh, through some of the country’s richest farmlands just before harvest time, another million people were evacuated.  Prime Minister Gilani finally paid his first visit to some of the flood-stricken regions.

By August 9th, nearly 14 million people had been affected by the deluge, the likes of which had never been experienced in the region in modern history, and at least 20% of the country was under water.  At that point, in terms of its human impact, the catastrophe had already outstripped both the 2004 tsunami and the 2010 Haiti earthquake.  On August 10th, the United Nations announced that six million Pakistanis needed immediate humanitarian aid just to stay alive. 

On August 14th, another half-million people were evacuated from the Sindhi city of Jacobabad.  By now, conspiracy theories were swirling inside Pakistan about landlords who had deliberately cut levees to force the waters away from their estates and into peasant villages, or about the possibility that the U.S. military had diverted the waters from its base at Jacobabad.  It was announced that 18 million Pakistanis had now been adversely affected by the floods, having been displaced, cut off from help by the waters, or having lost crops, farms, and other property.  The next day, U.N. Secretary-General Ban Ki-Moon, surveying the damage, pronounced it was “the worst disaster” he had ever seen. 

The following week a second crest of river water hit Sindh Province.  On August 30th, it submerged the city of Sujawal (population 250,000).  The next day, however, there were a mere 16 mentions of Pakistan on all American television news broadcasts, mostly on CNN.  On Labor Day weekend, another major dam began to fail in Sindh and, by September 6th, several hundred thousand more people had to flee from Dadu district, with all but four districts in that rich agricultural province having seen at least some flooding. 

Today, almost six million Pakistanis are still homeless, and many have not so much as received tents for shelter.  In large swaths of the country, roads, bridges, crops, power plants -- everything that matters to the economy -- were inundated and damaged or simply swept away.  Even if the money proves to be available for repairs (and that remains an open question), it will take years to rebuild what was lost and, for many among those millions, the future will mean nothing but immiseration, illness, and death.

Why the Floods Weren’t News    

In the United States, the contrast with the wall-to-wall cable news coverage of the Haitian earthquake in January and the consequent outpouring of public donations was palpable.  Not only has the United Nations’ plea for $460 million in aid to cover the first three months of flood response still not been met, but in the past week donations seem to have dried up.  The U.S. government pledged $200 million (some diverted from an already planned aid program for Pakistan) and provided helicopter gunships to rescue cut-off refugees or ferry aid to them.

What of American civil society?  No rock concerts were organized to help Pakistani children sleeping on highways or in open fields infested with vermin.  No sports events offered receipts to aid victims at risk from cholera and other diseases.  It was as if the great Pakistani deluge were happening in another dimension, beyond the ken of Americans. 

A number of explanations have been offered for the lack of empathy, or even interest, not to speak of a visible American unwillingness to help millions of Pakistanis.  As a start, there were perfectly reasonable fears, even among Pakistani-Americans, that such aid money might simply be pocketed by corrupt government officials.  But was the Haitian government really so much more transparent and less corrupt than the Pakistani one? 

It has also been suggested that Americans suffer from donor fatigue, given the string of world disasters in recent years and the bad domestic economy.  On August 16th, for instance, Glenn Beck fulminated: “We can't keep spending. We are broke! Game over… no one is going to ride in to save you… You see the scene in Pakistan? People were waiting in line for aids [sic] from floods. And they were complaining, how come the aid is not here?  Look, when America is gone, who's going to save the people in Pakistan? See, we got to change this one, because we're the ones that always ride in to save people.” 

Still, the submerging of a fifth of a country the size of Pakistan is -- or at least should be -- a dramatic global event and even small sums, if aggregated, would matter.  (A dollar and a half from each American would have met the U.N. appeal.)  Some have suggested that the Islamophobia visible in the debate about the Park 51 Muslim-owned community center in lower Manhattan left Americans far less willing to donate to Muslim disaster victims.

And what of those national security arguments that nuclear-armed Pakistan is crucial not just to the American war in Afghanistan, but to the American way of life?  Ironically, the collapse of the neoconservative narrative about what it takes to make the planet’s “sole superpower” secure appears to have fallen on President Obama’s head.  One of the few themes he adopted wholeheartedly from the Bush administration has been the idea that a poor Asian country of 170 million halfway around the world, facing a challenge from a few thousand rural fundamentalists, is the key to the security of the United States. 

If the Pakistani floods reveal one thing, it’s that Americans now look on such explanations through increasingly jaundiced eyes.  At the moment, no matter whether it’s the Afghan War or those millions of desperate peasants and city dwellers in Pakistan, the public has largely decided to ignore the AfPak theater of operations.  It’s not so surprising.  Having seen the collapse of our financial system at the hands of corrupt financiers produce mass unemployment and mass mortgage foreclosures, they have evidently decided, as even Glenn Beck admits, it’s “game over” for imperial adventures abroad. 

Another explanation may also bear some weight here, though you won’t normally hear much about it.  Was the decision of the corporate media not to cover the Pakistan disaster intensively a major factor in the public apathy that followed, especially since so many Americans get their news from television? 

The lack of coverage needs to be explained, since corporate media usually love apolitical, weather-induced disasters.  But covering a flood in a distant Asian country is, for television, expensive and logistically challenging, which in these tough economic times may have influenced programming decisions.  Obviously, there is as well a tendency in capitalist news to cover what will attract advertising dollars.  Add to this the fact that, unlike the Iraq “withdrawal” story or the “mosque at Ground Zero” controversy, the disaster in Pakistan was not a political football between the GOP and the Democratic Party.  What if, in fact, Americans missed this calamity mostly because a bad news story set in a little-known South Asian country filled with Muslim peasants is not exactly “Desperate Housewives” and couldn’t hope to sell tampons, deodorant, or Cialis, or because it did not play into domestic partisan politics?   

The great Pakistani deluge did not exist, it seems, because it was not on television, would not have delivered audiences to products, and was not all about us.  As we saw on September 11, 2001, and again in March 2003, however, the failure of our electronic media to inform the public about centrally important global developments is itself a security threat to the republic.

© 2010 Juan Cole

Juan Cole teaches Middle Eastern and South Asian history at the University of Michigan. His most recent book Napoleon's Egypt: Invading the Middle East (New York: Palgrave Macmillan, 2007) has just been published. He has appeared widely on television, radio and on op-ed pages as a commentator on Middle East affairs, and has a regular column at Salon.com. He has written, edited, or translated 14 books and has authored 60 journal articles. His weblog on the contemporary Middle East is Informed Comment.

Why Did We Celebrate Labor Day When the Role of Labor Has Been Negated?

Freethought San Marcos: Finding something worthwhile to celebrate on Labor Day

Submitted by Lamar Hankins on Sunday, 5 September 2010

 

Freethought San Marcos: A column

by LAMAR W. HANKINS

There is no more fitting Labor Day message to read and think about than the one given by Franklin Roosevelt in 1936. In the last part of his speech focusing on working people, he had this to say:

“Tomorrow is Labor Day. Labor Day in this country has never been a class holiday. It has always been a national holiday. It has never had more significance as a national holiday than it has now. In other countries the relationship of employer and employee has more or less been accepted as a class relationship not readily to be broken through. In this country we insist, as an essential of the American way of life, that the employer-employee relationship should be one between free men and equals. We refuse to regard those who work with hand or brain as different from or inferior to those who live from their property. We insist that labor is entitled to as much respect as property. But our workers with hand and brain deserve more than respect for their labor. They deserve practical protection in the opportunity to use their labor at a return adequate to support them at a decent and constantly rising standard of living, and to accumulate a margin of security against the inevitable vicissitudes of life.

“The average man must have that twofold opportunity if we are to avoid the growth of a class conscious society in this country.

“There are those who fail to read both the signs of the times and American history. They would try to refuse the worker any effective power to bargain collectively, to earn a decent livelihood and to acquire security. It is those short-sighted ones, not labor, who threaten this country with that class dissension which in other countries has led to dictatorship and the establishment of fear and hatred as the dominant emotions in human life.

“All American workers, brain workers and manual workers alike, and all the rest of us whose well-being depends on theirs, know that our needs are one in building an orderly economic democracy in which all can profit and in which all can be secure from the kind of faulty economic direction which brought us to the brink of common ruin seven years ago.

“There is no cleavage between white collar workers and manual workers, between artists and artisans, musicians and mechanics, lawyers and accountants, and architects and miners.

“Tomorrow, Labor Day, belongs to all of us. Tomorrow, Labor Day, symbolizes the hope of all Americans. Anyone who calls it a class holiday challenges the whole concept of American democracy.

“The Fourth of July commemorates our political freedom—a freedom which without economic freedom is meaningless indeed. Labor Day symbolizes our determination to achieve an economic freedom for the average man which will give his political freedom reality.”

No President today could give that speech honestly, and the evidence suggests that it was more wishfulness than reality when Roosevelt delivered it.  Still, American political attitudes are very different 74 years later while Americans suffer through the Great Recession, worried that it may become a double-dip recession or worse.  Our politicians (for the most part) are more concerned with helping the wealthy, those who make their money off of property (both real property and financial property), than with those who labor with their hands, bodies, and minds–those I refer to as “working people” or the “working class.”  At least, during the 1930s, in response to the Great Depression, there were jobs programs that employed Americans to build the nation’s infrastructure and parks for the public to enjoy, to create art for our edification, and to document our history for posterity.

Our government “of the people, by the people, and for the people” has done nothing to stem the stream of jobs being sent off-shore by the wealthy capitalists and corporatists.  The wealthy have been allowed by the government they control to prevent working families from getting adequate health care through their insistence that health care be treated as a commodity just like television sets or corn, rather than as a service vital to life.  For most people, health insurance is essential for access to the health care system in this country.  It is as essential to their economic well-being as are roads to allow them to get to jobs, yet the wealthy and their politicians prevent access unless they can get wealthier off of it.

How many city council members or county commissioners ask questions about worker health benefits of those seeking government handouts to create some new economic development opportunity with taxpayer subsidies?  If any do ask such questions, they must ask behind closed doors because I don’t hear or read about them in the news media.  If local politicians aren’t looking out for the workers, they must be focused on the wealthy, who get wealthier from the government handouts supported aggressively by chambers of commerce and economic development groups.

Over the past fifty years, the wealthy have succeeded in having their taxes reduced dramatically.  When I was a child during the “I like Ike” 1950s, the wealthiest among us paid taxes in the 92% tax bracket.  Now, the highest tax bracket is 35%, and no one pay social security taxes on anything earned above $106,400 a year.  But most working people pay social security taxes on all of their income.

The wealthy applauded when Ronald Reagan fired 11,000 air traffic controllers for going on strike in 1981.  Labor unions have been on a downhill slide ever since as the wealthy got control of the government’s labor union rule-making process to make it more and more difficult for working people to join together in the voluntary associations called unions to improve their economic lives and, thus, the lives of their families.  Union-busting practices of major corporations like Walmart have kept their workforce underpaid, adding to the financial pressures on the workers’ families.  No family-value conservative, wealthy or poor, seems willing to acknowledge that union-busting is an anti-family position that weakens the working class.

The wealthy have succeeded–with the help of Democrat and Republican administrations– in limiting the ability of the government to fairly regulate their most greedy, destructive behaviors, allowing the money managers, financiers, and global corporatists to run the American economy into a ditch for the average American.  No one with a private retirement account invested in the stock or bond markets this past ten years has escaped unscathed as the corporatists manipulated the economy for their own ends.  Every such person I talk to laments the loss of 25% to 50% of their retirement accounts over the last two major stock market crashes/recessions.  And these include working people, whether they are in the trades, sales, or professions.  Unfortunately, most who work for less than a living wage don’t have retirement accounts to worry about.

Roosevelt’s focus on free citizens, equal in status, is an important value for a democratic country, but not one that we have achieved.  Far from it.  Today, America is as divided by class as it was divided by slavery 155 years ago.  Vast economic differences would make little difference if all working people had decent incomes, affordable health care, adequate time off for their families, assured retirement benefits, and job security.

The economic democracy that Roosevelt hoped for has not been realized as the greed of the financial classes has increased.  Elements of the Tea Party recognize the disruptive effects of that greed, but their solutions solve nothing for the working class.  Financial policies, tax policies, war policies, and social policies undermine economic democracy and make it impossible to achieve.  The anger of the Tea Partiers can be a force for good, but it can interfere with clear thinking as well.  And as long as the Tea Party is financed by such wealthy billionaires as the Koch brothers, it will not be a populist force in American politics.  The government is not the Goliath wreaking havoc with the wealthy.  It is the wealthy who wreak havoc on the rest of us, the government included.

Robert Reich recently summed up what this nation needs now to help working-class families:  “We need massive public spending on jobs (infrastructure, schools, parks, a new WPA) along with measures to widen the circle of prosperity so more Americans can share in the gains of growth (exempting the first $20K of income from payroll taxes and applying the payroll tax to incomes over $250K, for example).”  If the Tea Party were serious about getting America out of the economic ditch and supporting the working class, these are the sorts of ideas it would support.

Roosevelt may have hoped for a classless society, but that has not happened in the United States.  So long as the institutions of government and finance are controlled by the wealthy class, the working class will not prosper.  What is good for the working class is good for the country, but the same cannot be said for what is good for the wealthy class.  We need to elect leaders who understand this and who will implement public policies that create a strong working class.   When that happens, we will have achieved Roosevelt’s “economic freedom” and have something to celebrate on Labor Day.

© San Marcos Freethought–Lamar W. Hankins

Billionaires Balk at Buffett and Gates initiative?

From ABC News, September 7, 2010

Clarissa Ward reports from Beijing:

"If charity cost nothing, the world would be full of philanthropists," Jewish proverb.

A brouhaha has been brewing in China amid rampant speculation that Chinese billionaires are dodging invitations to a banquet hosted by Bill Gates and Warren Buffett later this month… because they are nervous about being hit up for donations.

"Rich Chinese reluctant to meet with US barons. Guess suspect dinner invitations come with high price tag attached," one local headline blared.

Gates and Buffett, two of the richest men in the world, are heading to China later this month in an attempt to get the country's mega rich involved with their Giving Pledge. The initiative, which specifies that donors give at least half of their fortunes to charity, has had great success back home, with some 40 billionaires signing off and an estimated $600 billion likely to be raised.

According to this year's Forbes rich list, China has 117 billionaires, the second highest in the world after the U.S. Fifty of the country's super-rich were invited to the banquet.

"After the invitations were sent out, a number of people called to query if they would be asked to donate at the function. So far, a small group has turned down the invitations," said Ye Lei, the head of the foundation in China was quoted as saying.

Philanthropy is a relatively new concept to China, a country whose wealth is newly accumulated and whose social security system is stretched thin.

"Compared to the U.S., some wealthy people in China seem more concerned about their personal and children's well-being, partly because people tend to worry more about their own education, pensions and medical care," Jin Jinping, director of the center for nonprofit organizations law at Peking University, told the China Daily.

Among those who did accept the invitation, Zhang Zin, CEO and co-founder of real estate behemoth SOHO, Wang Chuanfu, the head of car and battery maker BYD and the richest man in China, and Chen Guangbiao, a Chinese entrepreneur well known for his generosity.

On his website, Chen wrote an open letter to Gates and Buffett, saying that he was "greatly moved" by the duo's commitment to charity and that less than 1 percent of China's wealthy elite give part of their fortune away and that. He also pledged to donate his entire wealth, estimated at $735 million, to charity when he dies.

Obama's Ten Mistakes

by John Lawrence

1. Phasing in his Health Care Plan. By letting Republicans convice him to phase it in over a period of years, Obama has given Republicans the chance to discredit it because the American people have not experienced any of the benefits yet. Instead, they have to wait by the year to realize any benefits and Americans are notorious for "instantaneous gratification." So it's not hard to see why they have turned against it. While the likes of Rush Limbaugh and Glenn Beck pound away and discredit it, American citizens have so far seen few if any of its benefits.

2. Job Creation. Obama and his economic team have totally misdiagnosed the job situation. They thought that tepid remedies would magically produce a turnaround without realizing that the job situation had been abysmal for years even before the Great Recession. Instead of creating immediate jobs via direct government funding to rebuild and further develop infrastructure, they've fiddled around with Republican lite proposals like tax breaks.

3. Failure to see that the biggest threat to national security was the drug war on our border. Instead of screwing around with the corrupt administration in Afghanistan, we should be concentrating on helping Mexico win the drug war and also securing our border against the illegal encroachment by people, drugs, weapons and money. Really! This is the biggest threat to national security - not less than 100 Al Quaeda in Afghanistan. We should be improving our security largely by defensive measures like insuring that people coming here on visas actually go home when they're supposed to and not just stay on illegally. There's so much to do here at home in terms of national security like securing and hardening our electrical grid and chemical plants and other vital national systems.

4. Giving away taxpayer money to bail out the banks without requiring anything in return. Obama thought he could come in later and regulate the banking system. Instead, bank lobbyists pretty much watered down his efforts to regulate them. Obama should have imposed restrictions on them when he had them over the barrel.

5. Failure to bail out Main Street. Obama did bail out the banks. Bankers are making more money than ever. But his proposals to mitigate foreclosures and keep people in their homes have largely come to nought and amounted to nothing. People are still losing homes to foreclosure at record rates. The banks are back in business making tons of money while the average person is hurting because they are losing their homes and jobs.

6. Failure to tax the $100 billion that is parked offshore by the rich and the corporations. Want to improve the deficit? Tax this money.

7. Pandering to Republicans. Even though the Democrats hold the Presidency and the majority in both Houses, they couldn't seem to get much done. Instead, they let the Republicans filibuster them to death.

8. Failing to end the filibuster rule. They should have gotten rid of it long ago. Democracy can't really work as long as it is in effect.

9. Failing to inititate a Financial Transactions Tax. This could bring in tons of money to government coffers and bring down the deficit and the national debt without affecting middle class Americans.

10. Failing to counter right wing radio talk show hosts like Limbaugh and Beck, Fox television and the Tea Party Movement. Where are the Democrats with their message? In many media markets the only thing on radio or TV is right wing propaganda.

Why Obama's Plan to Give Business a $250 Billion Tax Break is Counterproductive for Job Creation

by John Lawrence

Obama has some new proposals for the economy. One is a $50 billion plan to build infrastructure. This is good so far as it goes but $50 billion is not nearly enough. Recently, the Chinese spent $586 billion to build infrastructure. This would be more like it. But the absolutely loony part of Obama's plan is to give business $250 billion in tax writeoffs for plants and equipment. Why five times as much for what is basically a Republican plan? And it won't create new jobs. Here's why. Business will invest in new equipment like computers and automation that will allow them to lay off workers because the machines will do the work that they used to do. So it will actually diminish the number of jobs.

Why can't Obama wise up and give tax breaks to businesses that actually create jobs rather than to businesses in the hopes that they will create jobs? Is that so hard to do? You create a job, you get a tax break. It's that simple. You create two jobs, you get a bigger tax break. And so on. What's the big deal? Under Obama's plan businesses will just take the money, buy new equipment that replaces workers and then lay off workers. The net effect will be just the opposite of what Obama intends to achieve. Again the road to Hell will have been paved with good intentions. It's a fool's errand just to give tax breaks to businesses in general.

Why does Obama keep proposing what are essentially Republican plans? The original stimulus plan was heavily weighted with tax breaks and more lightly weighted with infrastructure building. And where did that get us? We're still in the ditch. Obama's administration is trying to pull the car out of the ditch, but despite their efforts, the car has slipped back in. Businesses are sitting on $2 trillion in cash. Do they really need another tax break or lower interest rates so they can borrow money? No, what they need is more people buying their products, in other words, DEMAND. And there's little demand in the economy because people don't have jobs. Here's the corroboration:

The US economy is experiencing anemic growth, yet businesses are sitting on a mountain of cash worth nearly $2 trillion, according to Federal Reserve estimates. But this trend is nothing new for firms, who have been steadily increasing their cash holdings over the past three decades, a University of Illinois business professor says. University of Illinois finance professor Heitor Almeida says the fact that businesses are stuffing corporate piggy banks with spare cash for the proverbial "rainy day" is unrelated to the belt-tightening brought about by the continuing financial crisis. "There's not really a consensus on what accounts for businesses holding so much cash, but they've been doing it way before the downturn, at least since the early 1980s," he said. "Cash hoarding is definitely not related to the financial crisis. It's a pattern that's been going on for at least three decades." Although there was a time shortly after the crisis when firms had difficulty raising capital, Almeida says most businesses entered it in a "very liquid position." "When the crisis hit, firms had a lot of cash on hand, and they used it to avoid decreasing investment and firing employees," he said. "If businesses hadn't had all that cash on hand, things could have been much, much worse." Almeida says companies that survived the financial shocks of the past few years are still jittery about weak consumer demand in the U.S. and an increasingly dismal forecast for the global recovery, so they'll likely continue to sit on their piles of cash. "You would think if they had better uses for that cash they would have spent it, but for some reason corporations have decided that the best thing they can do is keep the cash on the balance sheet," he said. Part of this is due to most big firms being multinational, allowing them to park the bulk of their cash outside of the U.S. in tax havens. "If you keep profits outside of the U.S., obviously, they won't get taxed," he said. "The way U.S. tax laws are written is that firms pay taxes the moment they repatriate the cash, which would be quite costly to shareholders." Almeida says there were proposals to give firms a tax break if they brought their money back to the U.S., but reviving such a proposal now "wouldn't be a politically viable option, especially not after all the bank bailouts." If repatriating the cash is off the table, shouldn't shareholders demand some of that cash be re-paid as dividends? "Firms are not obligated to pay dividends, and it's pretty much the case that the most successful firms are going to be the ones that hoard the most cash," Almeida said. "A really successful company like Google or Apple, for example, isn't going to go to the market and issue $30 billion in equity only to turn around and sit on the cash. With extremely successful companies, cash just accumulates. Shareholders may get mad, but cash-holding is positively correlated with shareholder returns, so it's no surprise." Almeida said even if companies did open up the coffers and flood the economy with cash, what might be good for job creation in the short-term might not necessarily be consonant with what shareholders want. "If you invest money to create jobs but generate negative profits, that's not good for shareholders," he said. "So that's probably not what firms should be doing, as much as we want to grow jobs." Stimulating lending by further lowering interest rates is not likely to have much of an effect on job creation, either. "The fact that firms have cash suggests that getting banks to lend more isn't the way to go," Almeida said. "Firms already have cash but they're not spending it. So what's the point of having banks make more loans, if firms don't need the cash?"

So in addition to having large amounts of cash parked offshore where it is adding to the deficit because it can't be taxed, businesses have tons of cash which negates Bernanke's policy of cheap money. The Fed lowering interest rates has no effect on stimulating the economy because businesses don't need to borrow money. Lowering their taxes will have no stimulative effect for the same reason nor will it create jobs.

Infrastructure rebuilding and building puts people back to work and improves the US in general. This creates demand and further stimulates the economy because it opens up opportunities for private sector investment that can actually make money. It has been estimated that we need a $2 trillion investment in infrastructure just to bring it up to par. Why won't Obama propose a massive investment in infrastructure? I'll tell you why. Because they would label him as a socialist. So what? According to him, they call him a dog already. Why should he be afraid of more labels when they have already called him every name in the book? Obama, like Clinton, has a penchant for pandering to Republicans. I guess he thinks it's cool. He needs to channel his inner FDR. FDR called out the corporations and the big wigs that ran them. He called them "economic royalists." Obama needs to do the same.

Obama seems to think that small business is the engine for job creation. Mr. President, think again. In 2005 small businesses lost about a million jobs, even as the overall economy expanded by about 2.5 million. The problem is small businesses lose more jobs than they create.

President Obama recently scarfed a “super sub” to show his support for mom-and-pop businesses, crediting the little guy with the majority of U.S. job growth. Every modern president has done the same. There’s just one problem: it isn’t true, according to a new study published by the National Bureau of Economic Research. The work—the first to track employment by age and size of the hiring company—found that small, mature firms (those with fewer than 500 employees and at least 10 years in operation) are actually net drags on job growth. On average, between 1992 and 2005, they destroyed more salaries than they created. In 2005, for example, small businesses lost about a million jobs, even as the overall economy expanded by about 2.5 million. Startups accounted for nearly all the growth.

Next idea? At least Obama and his team might consider getting their facts straight!

Neither Obama nor his economic team have really gotten to the bottom of our current malaise. They have not understood the roots of the problem. Since they have no theory or analysis of root causes, they just recycle warmed over Republican lite and Democrat lite proposals and wait for the economy to magically improve. But it's not happening. I agree with Boehner on one thing. He should get rid of his whole economic team and bring in new people. After all they have failed him miserably. Their advice is not worth anything. Why does he keep them around? I think Boehner actually wants Obama to keep his current team and, by calling for their dismissal, Boehner is actually setting Obama up to keep them in place because Obama doesn't want to cave in to the likes of Boehner.

The only thing that will work at this point is for the government to create jobs directly and not pander to the private sector in the hopes that they will create jobs instead of continuing their outsourcing, computerization and automating. There is a huge deficit in infrastructure and only the government can fix that. Obama should launch a massive infrastructure building plan, and I promise you that that will accomplish two things: 1) It will put people back to work immediately and 2) It will put the US in better shape with respect to badly needed infrastructure repair and help us catch up with the rest of the world which has already passed us by in transportation and green energy development.

Obama keeps recycling Republican lite proposals ala Bill Clinton. If he can't manage to come up with plans ala FDR, it's not going to help the economy which was in bad shape jobwise even before the Great Recession. Bush in his eight years in office managed to add only 3 million jobs to the economy. Compare that with Clinton who added 23 million jobs during his eight years in office. Bush's record represents the worst track record for job creation since the government began to keep records. The job situation has been a disaster for years. But Obama's tepid response has only landed him and his party up in deep trouble precisely because the analysis by his economic team and consequently their new proposals have been horrible failures. Now at the last minute before the November elections, Obama is trying to pull the cat out of the bag with more tepid proposals, more Republican lite proposals. It's not working and it won't work. Obama's only hope is that the American public will wake up and see that what the Republicans have in store for them, should they take power in November, is something so much worse that they will pray for the day when the Democrats still held power and at least there was some hope for job creation. If Obama gets another chance, let's hope he does something more radical than warmed over, tepid Republican lite proposals. Let's hope he channels the spirit of FDR.

The Tortoise Economy

by Robert Reich

Wednesday, September 8, 2010

Word from the twelve Federal Reserve Banks, summarized in the Fed’s so-called ”Beige Book,” shows the economy slowing in July and August.

Duh.

But the Fed is quick to point out the economy overall is still growing — even though it’s growing more slowly than in the spring.

Can we have a moment of realism here, please?

In 2008 and 2009 the economy fell into the deepest hole it’s been in since the Great Depression. Since then we’ve been struggling to get out. We’re failing big time. 

After a typical recession, growth surges until the economy reemerges from whatever hole it fell into and returns to its normal growth path. Usually that surge isn’t difficult to accomplish once the upswing begins because all the assets the economy needs to get back to its old path are readily available — lots of people who have been laid off or have come into the job market and been unable to find work, unused office and retail space, factories and equipment that had been idled. After the economy returns to normal and almost all these people and physical assets are back to work, growth slows to its normal pace.  

But this time it’s not happening that way. More than two and a half years after the Great Recession began, many months after we hit bottom and when in a normal “recovery” we’d expect growth to surge, the opposite is happening. Growth is slowing. 

We may or may not fall into another hole, but a so-called “double dip” isn’t really the worry. The worry is we’re not getting out of the giant hole we fell into. Growth is slowing when it should be surging. Think of a tortoise trying to get out of a deep ravine, who’s just begun to scale the wall when he gets tired and goes to sleep.

As I keep saying, this isn’t your ordinary business cycle. But we’re debating fiscal policy as if it were. 

Democrats and Republicans are battling over whether the Bush tax cuts should be extended to the richest 2.7 percent of Americans next year. They shouldn’t be, of course. The rich don’t spend nearly as much of their incomes as everyone else, and the $36 billion windfall they’d otherwise get could be better spent saving the jobs of teachers, fire fighters, and police officers who do spend almost all their incomes. 

Yet even if Democrats win this one, the tortoise might wake up and move several inches up the wall before falling asleep again. Even if Congress were to go further and enact Obama’s $50 billion infrastructure bank — another proposal in the right direction — the tortoise might move another few inches. 

The underlying problem is structural, not cyclical. There will be no return to normal because normal got us into the hole in the first place. And the normal kind of prescriptions can’t possibly get us out. Until the economy is restructured so more Americans share in its gains, the economy won’t make many gains. We’ll be forever trying to scale a wall that can’t be, because the vast majority of Americans lack the purchasing power to move upward. 

If you’ll permit me a commercial, I explain all this in detail — as well as what must be done — in AFTERSHOCK: The Next Economy and America’s Future, which will be out in two weeks from Knopf.

A Symbolic Solar Road Trip To Reignite a Climate Movement

Published on Tuesday, September 7, 2010 by Yale Environment 360

An activist caravan to bring one of Jimmy Carter’s solar panels back to the White House symbolizes not only the time the U.S. has lost in developing new energy technologies – but also the urgent need for taking action on climate.

by Bill McKibben

As I write this piece, we're in the midst of a (biodiesel) road trip to Washington, D.C., towing behind us an unwieldy piece of history: a solar panel off the roof of the Carter White House. It's decades old, though it still makes hot water just fine. In a sense, we're traveling backward-which in another sense is what I think we're going to have to do for a while in the U.S. climate movement.

The bad news everyone knows. The strongest attempt ever to pass climate legislation through the U.S. Congress came up short earlier this summer. The inside-the-Beltway green groups took what seemed to be the route of least resistance: a very tame piece of climate legislation larded with special prizes for special interests. They worked it as hard as it could have been worked-and in the end it didn't even come close. The fossil fuel industry and their allies in D.C. barely had to break a sweat shooting it down.

So-barring some unforeseen development-we're not going to see significant action on the federal level about climate for at least the next two years.

And that means we're far less likely to see significant international action on climate, since it's hard for other governments to muster the political will to make tough choices when the U.S. is punting.

So what do we do with those two years? I think we use them to build a movement, which explains the solar panel we're hauling south from Maine.

The story is painful even to consider. This panel went up on the White House roof in 1979, with then-president Jimmy Carter (in a wide tie, and with a bushy haircut) promising that it would still be there in the year 2000, producing hot water from the sun for whoever was then president. In fact, it didn't make it through the next decade-it came down in the Reagan years, a symbol of our decision to turn away from the idea of limits and veer sharply down the path we've trod ever since.

But not everyone went along. Frugal folks at Unity College in Maine salvaged the panels, and put them up on the cafeteria, where they continued to produce hot water for the next three decades. Meanwhile, around the world other nations took the technology and went to work. Germany and Japan took over the lead in photovoltaic panels, but solar thermal technology like this became the special province of the Chinese.

I sat not long ago with Huang Ming, China's leading solar entrepreneur, in his space-age Sun Moon Mansion in Shandong Province looking over the stats: his HiMin Solar Energy Group has put up 60 million such systems across China-he estimated that when 250 million Chinese take a shower, the hot water is coming off their roofs. In a biting symbol of that passed torch, he keeps one of the Carter panels in his private museum.

There's no question what we should have spent the last few decades doing. But there's no point now in crying about why we didn't: the only job is to try to get back in the game, to start catching up.

Some of that means spending the money so that we can make the next technological discoveries. Many, including the Breakthrough Institute and Bill Gates, are calling for big increases in R and D funding, which might help us somehow claw our way back toward the front of the parade.

But catching up also means making use of the technology we already have, in ways both practical and symbolic.

We're headed for the White House with this old panel, and with a promise from the U.S. company Sungevity that it will supply all the brand-new panels the president could ever want-as long as he puts them up on his roof where everyone can see them. George W. Bush, amazingly enough, actually put some solar back in the White House grounds-on the roof of a maintenance shed, and on, who knew, the Presidental Spa and Cabana. But since he didn't tell anyone, they didn't do much good. We want them up there on the roof, as visible as the White House garden, which helped boost seed sales 30 percent across the nation the year Michelle planted it.

So far, we haven't heard a word from the White House about whether they'll accept the gift and make the promise or not-which, frankly, surprises me. I can't think of a clearer win for the president, a better reminder to the legions of young people who worked on his campaign that he is still focused on the future. He owes environmentalists more than he's given them-by all accounts he decided not to push for the Senate legislation. He's up against tough odds in Congress, of course, given the obstructionist GOP. But they can't filibuster his roof.

What's especially poignant is that we have gotten promises from other, much less likely, world leaders-Mohammed Nasheed, for instance, president of the entirely Muslim and quite poor Maldive Islands, the low-lying Indian Ocean nation that faces inundation from rising seas.

He took the Sungevity offer, and he'll be putting solar panels on his roof on October 10 (10-10-10), the same day that thousands of groups around the world will be participating in a massive Global Work Party, putting up wind turbines and laying out bike paths. The same day we want Barack Obama, sleeves rolled up, out on his roof with a wrench.

The point of all these panels, of course, is not that we're going to solve climate change one roof at a time. (Obama is doing lots of good practical things already-his "greening the government" effort is retrofitting federal buildings across the country with insulation, for instance). The point is that they help build the movement that we allowed to wither away.

Environmentalists lost sight of just how big a movement that would need to be. Too many groups convinced themselves that they could slide some legislation through Congress, make deals with industry, get things going without a fight. It was worth a try, but it didn't work-the fossil fuel industry, the most profitable enterprise known to man, beat us. And they will beat us again and again until there's a real, broad-based, popular, noisy movement underway in this country, a movement that can provide a currency (bodies, passion) equal to the currency the billionaire Koch Brothers can pony up to defeat climate legislation.

Some of that movement will go on at the local level, as we transform cities and towns and show what can be done. Some will be done on college campuses like Unity College, or Middlebury where I teach, which are showing the way forward. Some of it will be done in jails-I'd be very surprised if civil disobedience doesn't become a bigger part of this battle in the years ahead, if only because it's the tool we use to show our society how urgent, morally and practically, this crisis really is.

But some of it must be done symbolically. And there's no more symbolic piece of real estate on this continent than the White House. Let's hope that on the 10th of October it, at least, is transformed. It's been a long, hot summer, in the capitol as in much of the northern hemisphere. Let's make sure that next year that heat is put to some purpose-heating the Obamas' bathtub, and helping power up a movement.

© 2010 Yale Environment 360

Bill McKibben is the author of many books, including his latest: Eaarth: Making a Life on a Tough New Planet. His other books include, Deep Economy: The Wealth of Communities and the Durable Future and The End of Nature.  McKibben is a scholar in residence at Middlebury College, and cofounder of 350.org.

Time Running Out Faster Than Water, Experts Warn

Published on Tuesday, September 7, 2010 by Inter Press Service

by Thalif Deen

STOCKHOLM  - A major week-long international water conference opened in the Swedish capital Monday with an ominous warning: time is running out faster than fresh water.

 

A man fills water containers in a slum area in Manila, Philippines. Increasing water pollution and dwindling water quality around the globe will be the main focus as around 2,500 experts begin gathering in Stockholm for the 20th edition of the World Water Week.(AFP/Noel Celis)

If the "massive and complex challenges" facing one of the world's most finite natural resources are not resolved soon, the future looks grimly devastating: scarcities, pollution, droughts, floods, desertification and diseases.

 

Gunilla Carlsson, the Swedish minister for international development cooperation, described the recent floods in Pakistan as one of the major natural disasters facing that country.

"We are deeply concerned about the situation in Pakistan," she said, of a country where over 60 years of infrastructure development has been literally washed away in a water- related calamity in the flood-affected regions.

She said the Swedish government has so far responded with 20 million dollars in assistance to Pakistan.

Carlsson said the most affected - as in most natural disasters - were the poor and the most vulnerable in society. At last count, over 1,700 have died while more than 1.2 million homes and schools have been destroyed by the floods, according to reports from Pakistan.

Carlsson said there could be more deaths from water-borne diseases, even as Pakistan struggles to cope with the disaster.

Speaking at the opening ceremony in a city surrounded by water, Anders Berntell, executive director of the Stockholm International Water Institute (SIWI), warned: "Bad water kills more people than HIV, malaria and wars together, affecting the lives of families and the economic development of many countries around the world."

"We are also increasingly seeing that ecosystems and their services are being degraded by pollution, which will affect all functions of society," he added.

The conference, attended by more than 2,500 key water experts, will focus on the theme: "Responding to Global Changes: The Water Quality Challenge."

This is the 20th consecutive year that SIWI is hosting its 'World Water Week' in a city described as Europe's "first green capital".

This year, Berntell said, weather patterns have been increasingly erratic. "We cannot say that any of these individual events are effects of climate change, but the patterns coincide with the scenarios that scientists have predicted: snowfall, floods and severe droughts," he noted. He regretted that many representatives from Pakistan couldn't attend the conference.

"We share the frustration and despair of all those affected, and we share the concern with many over the fact that our leaders did not resume their responsibilities (at the last failed Climate Change conference) in Copenhagen."

In international discussions on water, there is a tendency to focus on the availability of water, but not quality.

"Poor water quality affects human lives and livelihoods and the function of ecosystems in the same way as lack of water," Berntell said.

According to the Millennium Ecosystem Assessment, he said, freshwater ecosystems have degraded more than any other ecosystem, including tropical rainforests.

Several studies indicate that more than 40 percent of fish species and amphibians are threatened with extinction.

Polluted freshwater ends up in the oceans, causing serious damage to many coastal areas and fisheries, thereby constituting a major challenge to ocean and coastal resource management.

Addressing the gathering, Dr Rita Colwell, the 2010 Stockholm Water Prize Laureate, said that shortcomings in addressing the water quality issue, coupled with climate changes, could lead to disastrous outbreaks of water-borne diseases such as cholera.

This, in turn, is bound to affect economic and national security.

But Carlsson, the Swedish minister, also touted some of the success stories. She said a great deal has happened since World Water Week was launched 20 years ago.

For example, almost two billion more people have access to safe drinking water compared with 20 years ago, and around 1.5 billion more people have access to sanitation.

The provision of safe water has actually outperformed global population growth and given more than eight million people, roughly the population of Sweden, access to safe water every month for 20 years, said Carlsson.

Meanwhile, the Sri Lanka-based International Water Management Institute (IWMI) pointedly says that "running out of water is running out of time".

"We are headed for a water crisis," it warns in a new publication authored by Colin Chartres and Samyuktha Varma, and titled 'Out of Water' released here.

As the global population is forecast to reach nine billion by 2050, water is becoming scarcer around the world as expanding cities, developing countries and new biofuel crops suck water in ever-greater amounts from the world's rivers and lakes, say the authors.

© 2010 Inter Press Service

What a Second Stimulus Should - and Shouldn't - Look Like

Published on Tuesday, September 7, 2010 by Open Left

by David Sirota

Recounting the findings of  a new study by the Keystone Research Center, the Denver Business Journal reports that "the unemployment rate would approach 16 percent nationally -- more than 6 percentage points higher than the current jobless rate -- if not for the federal stimulus program." This comports with data released earlier by the Congressional Budget Office and with the opinions of both liberal and ultra-conservative economists.

Such consensus should end the debate about whether or not Congress should pass another stimulus bill. It should - the only debate should be over the shape of that stimulus bill, and even that shouldn't be up for debate, though, unfortunately, it most certainly is.

From both liberal and conservative economists - as well as from history - we know that direct government spending on things like infrastructure and education investment is a good way to prime the economy in the short term and the long term. So is spending on stuff like unemployment benefits and food stamps, which puts money into the hands of those who will spend it immediately on necessities. And, of course, we know from polls that spending on such priorities is far more politically/electorally popular than devoting more money to corporate tax cuts or to deficit reduction.

We also know from the Bush era - and from 20th century history in general - that tax cuts are far less effective at spurring economic development than direct spending. That's why this Washington Post story is so troubling:

Under mounting pressure to intensify his focus on the economy ahead of the midterm elections, President Obama will call for a $100 billion business tax credit this week...The business proposal - what one aide called a key part of a limited economic package - would increase and permanently extend research and development tax credits for businesses...

Sure, it's great that the president today is talking about spending $50 billion on infrastructure. As evidenced by this very diary, I obviously support such new spending. But when the paltry sum of $50 billion is put up against double that amount in corporate tax cuts, it seems like the administration's priorities are all screwed up. If the job-creating weakness of the first stimulus bill was it's willingness to devote roughly 40 percent of its funds to less-effective tax cuts and just 60 percent to employment-boosting spending, then a similar weakness will be even more amplified in new stimulus proposals that, by the administration's initial figures, may end up devoting double to tax cuts what it devotes to infrastructure spending.

After all, there are two fundamental problems with the tax cuts being proposed: 1) In general, tax cuts have not proven to be a very good short- or long-term job creator or economic engine and 2) In specific, as Citizens for Tax Justice has long reported, the R&D tax credit has become something of a corporate boondoggle, especially in light of the far more effective direct government spending on R&D. Even the conservative Wall Street Journal has lambasted this particular tax credit as blatant corporate welfare, noting that, according to the Government Accountability Office, 70 percent of it goes not to small businesses in need, but to already-wealthy multinational firms with receipts of $1 billion or more. Think big drug companies, as just one example.

But maybe that's the unfortunate point. Maybe this is yet another example of the administration looking first at how a policy can satisfy Big Money, and then at the (alleged) residual benefits to average American workers - rather than looking at it in the opposite way. If that's the case, it's tragic - because the success of the first stimulus's spending gives the administration strong ammunition to put forward a far more progressive proposal, one that would be far more politically popular for Democrats in advance of the 2010 election.

© 2010 Open Left

David Sirota is a bestselling author whose newest book is "The Uprising." He is a fellow at the Campaign for America's Future and a board member of the Progressive States Network-both nonpartisan organizations. Sirota was once US Senator Bernie Sanders' spokesperson. His blog is at www.credoaction.com/sirota.

Why Obama Is Proposing Whopping Corporate Tax Cuts, and Why He’s Wrong

by Robert Reich

Tuesday, September 7, 2010

President Obama reportedly will propose two big corporate tax cuts this week.

One would expand and make permanent the research and experimentation tax credit, at a cost of about $100 billion over the next ten years. The other would allow companies to write off 100 percent of their new investments in plant and equipment between now and the end of 2011 at a cost next year of substantially more than $100 billion (but a ten-year cost of about $30 billion since those write-offs wouldn’t be taken over the longer-term).

The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox. 

The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay.

In any event, small businesses don’t have enough profits against which to use these tax credits and deductions, and large corporations are sitting on over a trillion dollars of profits and don’t need them.

Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for one reason: Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.

In sum, Obama’s proposed corporate tax cuts (1) won’t generate more jobs because they don’t put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000); (2) will subsidize companies to cut even more jobs; and (3) will cost $130 billion — money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.

So why is Obama proposing them? To put Republicans in a bind. If they refuse to go along he can justifiably say they have no agenda other than obstruction. After all, the only thing they’ve been arguing for is lower taxes. On the other hand, if Republicans agree to support these corporate tax cuts, Obama can claim a legislative victory that will help Democrats neutralize their opponents in the upcoming elections.

The proposals also make it harder for Republicans to argue the Bush income tax cuts should be extended for the richest 3 percent of taxpayers because small businesses need it. Obama’s corporate tax cuts would appear to do the trick.

The White House probably figures even if Republicans agree to the proposed tax cuts, nothing will come of it. Congress will be in session for only about two weeks between now and the midterm elections so it’s doubtful these proposals would be enacted in any event.

But this cynical exercise could backfire if Republicans call Obama’s bluff and demand the corporate tax cuts be put on a fast track and get signed into legislation before the midterms.

More troubling, Obama’s whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy’s biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.

FDA Considers Approving Genetically Modified Salmon for Human Consumption

By Lyndsey Layton, Washington Post Staff Writer

 Monday, September 6, 2010; 5:16 PM

The Food and Drug Administration is poised to approve the first genetically modified animal for human consumption, a highly anticipated decision that is stirring controversy and could mark a turning point in the way American food is produced.

FDA scientists gave a boost last week to the Massachusetts company that wants federal approval to market a genetically engineered salmon, declaring that the altered salmon is safe to eat and does not pose a threat to the environment.

"Food from AquAdvantage Salmon . . . is as safe to eat as food from other Atlantic salmon," the FDA staff wrote in a briefing document.

Those findings will be presented Sept. 19 to a panel of scientific experts which will advise top officials at the FDA whether to approve the altered salmon. The panel is holding two days of meetings to hear from FDA staff, the company behind AquAdvantage and the public.

AquAdvantage is an Atlantic salmon that has been given a gene from the ocean pout, an eel-like fish, which allows the salmon to grow twice as fast as a traditional Atlantic salmon. It also contains a growth hormone from a Chinook salmon.

AquaBounty, the Massachusetts company that first applied to the FDA for permission to sell its fish in 1995, said the modified fish is identical to the Atlantic salmon, except for the speed of its growth.

"We've been studying this fish for more than 10 years," said Ronald L. Stotish, the company's president and chief executive. "In characteristics, physiology, behavior, this is an Atlantic salmon. It looks like an Atlantic salmon. It tastes like an Atlantic salmon."

The team of scientists at the FDA that reviewed AquaBounty's application seems to agree. "We have found no biologically relevant difference between food from [AquaBounty salmon] and conventional Atlantic salmon," the briefing documents said.

But independent scientists, consumer groups and environmental organizations are concerned about both the pending decision and the process that the FDA uses to determine whether the genetically modified fish is safe for human health and the environment.

The agency is evaluating the fish as if it were a new veterinary drug, which means the FDA's deliberations are behind closed doors and that AquaBounty can claim much of the research and other supporting data it supplies to the FDA is confidential.

"Critical information about the whole process has been kept from the public and organizations that focus on these issues," said Wenonah Hauter, executive director of Food and Water Watch, part of a coalition of 31 organizations and restaurant chefs that is demanding that the FDA deny approval of the altered fish. "There's a transparency problem."

Siobhan DeLancey, an FDA spokeswoman, said the agency is following rules. "We do have obligations under the regulations to protect company confidential information," she said.

Hauter and other critics said the information shield makes it difficult for independent scientists to thoroughly analyze claims by AquaBounty or the FDA staff that the altered fish poses no long-term risk to human health or the environment.

Consumer groups and environmental organizations are particularly concerned that AquAdvantage Salmon could escape their fish farms to threaten the wild salmon population, which is severely endangered, Hauter said.

Anne Kapuscinski, a professor at Dartmouth College and an international expert on the safety of genetically modified organisms, said she is uncertain how well the FDA is able to fully assess the risks to the natural world that may be posed by an organism created in a laboratory.

"If you put the top scientific researchers in this area into a room, they would have to work very hard together to figure out the conclusion for ecological risk," Kapuscinski said. "This is very, very complex."

The pending decision is being tracked by biotechnology companies that have invested millions of dollars in developing genetically modified animals for food and are waiting for the FDA to act on their approval requests.

Scientists at the University of Guelph in Ontario, Canada, have asked the FDA to approve their "Enviropig," a hog genetically altered to produce environmentally friendly manure. Hematech of Sioux Falls, S.D., is developing genetically modified cows that are resistant to mad cow disease.

The United States has approved genetically modified plants such as corn and soybean.

The fish decision is expected to reverberate beyond the United States. "If these genetically engineered salmon are approved, it will be setting worldwide precedent because salmon is a global commodity," Kapuscinski said. "It will be the first genetically engineered animal approved for human consumption and for wide-scale farming."

In developing its fish, AquaBounty took an Atlantic salmon and inserted a growth hormone gene from a Chinook salmon as well as an "antifreeze" gene from the ocean pout.

Conventional salmon stop growing in cold weather and grow very slowly in the first year of life. But the pout's antifreeze gene allows the salmon to produce growth hormones all year, and the genetically modified fish can grow to market size in 18 months instead of three years, AquaBounty said. That means farmers can speed production and increase yields, the company said.

Stotish said the genetically modified fish can become a sustainable source of food for an exploding global population.

Mozambique's Food Riots – the True Face of Global Warming

Published on Sunday, September 5, 2010 by The Guardian/UK

The violence in Maputo is just the latest manifestation of the crippling shortcomings of the global economy

by Raj Patel

It has been a summer of record temperatures – Japan had its hottest summer on record, as did South Florida and New York. Meanwhile, Pakistan and Niger are flooded and the eastern US is mopping up after hurricane Earl. None of these individual events can definitively be attributed to global warming. But to see how climate change will play out in the 21st century, you needn't look to the Met Office. Look, instead, to the deaths and burning tyres in Mozambique's "food riots" to see what happens when extreme natural phenomena interact with our unjust economic systems.

 

A boy carries home loaves of bread in Bulawayo, about 400 km (249 miles) outside Harare, April 11,2007. Global commodity speculators continue to treat food as if it were the same as television sets, with little end in sight to what the World Development Movement has called "gambling on hunger in financial markets". (File: REUTERS/Emmanuel Chitate)

The immediate causes of the protests in Mozambique's capital, Maputo, and Chimoio about 500 miles north, are a 30% price increase for bread, compounding a recent double-digit increase for water and energy. When nearly three-quarters of the household budget is spent on food, that's a hike few Mozambicans can afford.

 

Deeper reasons for Mozambique's price hike can be found a continent away. Wheat prices have soared on global markets over the summer in large part because Russia, the world's third largest exporter, has suffered catastrophic fires in its main production areas. These blazes, in turn, find their origin both in poor firefighting infrastructure and Russia's worst heatwave in over a century. On Thursday, Vladimir Putin extended an export ban in response to a new wave of wildfires in its grain belt, sending further signals to the markets that Russian wheat wouldn't be available outside the country. With Mozambique importing over 60% of the wheat its people needs, the country has been held hostage by international markets.

This may sound familiar. In 2008, the prices of oil, wheat, corn and rice peaked on international markets – corn prices almost tripled between 2005-2008. In the process, dozens of food-importing countries experienced food riots.

Behind the 2008 protests were, first, natural events that looked like an excerpt from the meteorological section of the Book of Revelation – drought in Australia, crop disease in central Asia, floods in south-east Asia. These were compounded by the social systems through which their effects were felt. Oil prices were sky-high, which meant higher transport costs and fossil fuel-based fertiliser prices. Biofuel policy, particularly in the US, shifted land and crops from food into ethanol production, diverting food from stomachs to fuel tanks. Longer term trends in population growth and meat consumption in developing countries also added to the stress. Financial speculators piled into food commodities, driving prices yet further beyond the reach of the poor. Finally, some retailers used the opportunity to raise prices still further, and while commodity prices have fallen back to pre-crisis levels, most of us have yet to see the savings.

Is this 2008 all over again? The weather has gone wild, meat prices have hit a 20-year high, groceries are being looted and heads of state are urging calm. The view from commodities desks, however, is that we're not in quite as dire straits as two years ago. Fuel is relatively cheap and grain stores well stocked. We're on track for the third-highest wheat crop ever, according to the Food and Agriculture Organisation of the United Nations (FAO). While all this is true, it misses the point: for most hungry people, 2008 isn't over. The events of 2007-2008 tipped more than 100 million into hunger and the global recession has meant that they have stayed there. In 2006, the number of  undernourished people was 854 million. In 2009, it was 1.02 billion – the highest level since records began. The hardest hit by these price rises, in the US and around the world, were female-headed households.

Not only are the hungry still around, but food riots have continued. In India, double-digit food price inflation was met by violent street protests at the end of 2009. The price rises were, again, the result of both extreme and unpredictable monsoons in 2009 and an increasingly faulty social safety net to prevent hunger. There have been frequent public protests about the price of wheat in Egypt this year, and Serbia and Pakistan have seen protests too.

Although commodity prices fell after 2008, the food system's architecture has remained largely the same over the past two decades. Bill Clinton has offered several mea culpas for the international trade and development policies that spawned the food crisis. Earlier this year, he blamed himself for Haiti's vulnerability to price fluctuations. "I did that," he said in testimony to the US Senate. "I have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people, because of what I did. Nobody else." More generally, Clinton suggested in 2008 that "food is not a commodity like others… it is crazy for us to think we can develop a lot of these countries [by] treating food like it was a colour television set."

Yet global commodity speculators continue to treat food as if it were the same as television sets, with little end in sight to what the World Development Movement has called "gambling on hunger in financial markets". The recent US Wall Street Reform Act contained some measures that might curb these speculative activities, but their full scope has yet to be clarified. Europe doesn't have a mechanism to regulate these kinds of speculative trades at all. Agriculture in the global south is still subject to the "Washington consensus" model, driven by markets and with governments taking a back seat to the private sector. And the only reason biofuels aren't more prominent is that the oil they're designed to replace is currently cheap.

Clearly, neither grain speculation, nor forcing countries to rely on international markets for food, nor encouraging the use of agricultural resources for fuel instead of nourishment are natural phenomena. These are political decisions, taken and enforced not only by Bill Clinton, but legions of largely unaccountable international development professionals. The consequences of these decisions are ones with which people in the global south live everyday. Which brings us back to Mozambique.

Recall that Mozambique's street protests coincided not only with a rise in the price of bread, but with electricity and water price hikes too. In an interview with Portugal's Lusa news agency, Alice Mabota of the Mozambican League of Human Rights didn't use the term "food riots". In her words: "The government… can't understand or doesn't want to understand that this is a protest against the higher cost of living." The action on the streets isn't simply a protest about food, but a wider act of rebellion. Half of Mozambique's poor already suffer from acute malnutrition, according to the FAO. The extreme weather behind the grain fires in Russia transformed a political context in which citizens were increasingly angry and frustrated with their own governments.

Yesterday, I reached Diamantino Nhampossa, the co-ordinator of Mozambique's União Nacional de Camponeses (National Peasants Union of Mozambique). "These protests are going to end," he told me. "But they will always come back. This is the gift that the development model we are following has to offer." Like many Mozambicans, he knows full well which way the wind blows.

© 2010 Guardian News and Media Limited

Having Everyone Get a College Education Will Not Result in More Job Creation

by John Lawrence

 
To hear President Obama and a lot of other liberal intellectuals talk, the solution to the jobs crisis is for everyone to get a college education as if this in and of itself will create more jobs. It won't. It's not as if jobs are going begging for those with college degrees. On the contrary college graduates are not able to find work in their fields and are instead working at Starbucks or driving taxi cabs. It's utter nonense that the collegification of the US will produce full employment.

What's happening instead, as more and more young people get college degrees, is that employers are upgrading their demands and requirements for those that they do hire. A job that didn't used to require a college degree, that could be performed perfectly well by someone without a college degree, now requires a college degree. And a job that used to require someone with a BS or BA degree now requires someone with an MA or a MS degree and on up the food chain. Employers are eager, since there is an oversupply of labor at all degree levels, to extract the most qualified out of the masses applying for jobs these days. They can cherry pick. They literally have their pick from tons of applicants. Right now there are five applicants for every job in the US. And that's an average. In some fields there are many more than that.

And the currently unemployed are having an even more difficuilt time finding a job because of discrimination against the unemployed. In an article Disturbing Job Ads: 'The Unemployed Will Not Be Considered' we find the following:

Still waiting for a response to the 300 resumés you sent out last month? Bad news: Some companies are ignoring all unemployed applicants. In a current job posting on The People Place, a job recruiting website for the telecommunications, aerospace/defense and engineering industries, an anonymous electronics company in Angleton, Texas, advertises for a "Quality Engineer." Qualifications for the job are the usual: computer skills, oral and written communication skills, light to moderate lifting. But red print at the bottom of the ad says, "Client will not consider/review anyone NOT currently employed regardless of the reason." In a nearly identical job posting for the same position on the Benchmark Electronics website, the red print is missing. But a human resources representative for the company confirmed to HuffPost that the The People Place ad accurately reflects the company's recruitment policies. "It's our preference that they currently be employed," he said. "We typically go after people that are happy where they are and then tell them about the opportunities here. We do get a lot of applications blindly from people who are currently unemployed -- with the economy being what it is, we've had a lot of people contact us that don't have the skill sets we want, so we try to minimize the amount of time we spend on that and try to rifle-shoot the folks we're interested in." There are about 5.5 people looking for work for every job available, according to the latest data from the Labor Department. Sony Ericsson, a global phone manufacturer that recently announced that it would be bringing 180 new jobs to the Buckhead, Ga. area, also recently posted an ad for a marketing position on The People Place. The add specified: "NO UNEMPLOYED CANDIDATES WILL BE CONSIDERED AT ALL." When asked about the ad, a spokeswoman said, "This was a mistake, and once it was noticed it was removed." Ads asking the unemployed not to apply are easy to find. A Craigslist ad for assistant restaurant managers in Edgewater, N.J. specifies, "Must be currently employed." Another job posting for a tax manager at an unnamed "top 25 CPA firm" in New York City contains the same line in all caps.

There has been a structural change in the job market which a lot of people don't want to acknowledge or consider. Jobs that could be done by those with little or no education have been off-shored. Those jobs that couldn't be offshored are being done by illegal immigrants. These are the jobs that "Americans don't want to do" supposedly. But an American without a job might want to reconsider one of those jobs that Americans don't want to do. From the Wall Street Journal:

Students are borrowing dramatically more to pay for college, accelerating a trend that has wide-ranging implications for a generation of young people. New numbers from the U.S. Education Department show that federal student-loan disbursements—the total amount borrowed by students and received by schools—in the 2008-09 academic year grew about 25% over the previous year, to $75.1 billion. The amount of money students borrow has long been on the rise. But last year far surpassed past increases, which ranged from as low as 1.7% in the 1998-99 school year to almost 17% in 1994-95, according to figures used in President Barack Obama's proposed 2010 budget. The sharp growth is "definitely above expectations," says Robert Shireman, deputy undersecretary of the Education Department. "But we're also in an economic situation that nobody predicted." The eye-opening increase in borrowing is largely due to the dire economic environment, which is causing more people to seek federal loans, he says. The new numbers highlight how debt has become commonplace in paying for higher education. Today, two-thirds of college students borrow to pay for college, and their average debt load is $23,186 by the time they graduate, according to an analysis of the government's National Postsecondary Student Aid Study, conducted by financial-aid expert Mark Kantrowitz. Only a dozen years earlier, according to the study, 58% of students borrowed to pay for college, and the average amount borrowed was $13,172.

So what do all the savants recommend? Why going back to school, of course. In a mistaken notion that they can claw their way to the top of the heap by getting more education, by acquiring even more degrees, people are taking on even more student loan debt in a futile effort to gain entry into the job market for even fewer jobs. The smart thing to do would be to find out where, if anywhere, the jobs actually are and then prepare yourself for those jobs. But that's not too hard to figure out actually. The jobs are in the military-industrial complex, banking and health care, three sectors that really need to be reined in or cut back, and, if that happens, jobs in those sectors will diminish. Until then, one can hold their nose and jump in.

According to CNN, 70% of the new jobs being created are in retail, cashiering or food preparation and pay less than $10. per hour. So if you want a job saying "want fries with that" or helping someone find just the right blouse, you might be in luck. And a college degree is no guarantee that you'll not end up making grande mochas at Starbucks.

Alternatively, one can prepare themselves for a job in the new green economy if such an economy ever develops. Oil interests are using their money to see to it that it doesn't so this too looks dicey. But the general point I'm trying to make is that a college degree is no panacea when it comes to employment, and for some people to be making the case that you deserve to be a failure because you can't find a job and don't have a college degree is deplorable. It's as if they're saying, "Of course, you're a failure. You don't have a college degree. What do you expect?"

The private and online colleges and universities are using this line to shore up their profits. They recruit their students with promises of glorious salaries once they get their degrees. In the meantime, they will be taking on massive amounts of student loan debt. Then when they graduate, many are finding that either they can't find a job or, if they can, the pay is not sufficient to make their monthly payments on their student loan debt.

Albert Einstein's critique of the Great Depression was prescient in the sense that one could say it today about the Great Recession:

This is from page 403 of Einstein, His Life and Universe by Walter Isaacson:

"Nor was his critique of the current world crisis one that would appeal to ardent capitalists. The economic depression, especially in America, seemed to be caused, he said, mainly by technological advances that 'decreased the need for human labor' and thereby caused a decline in consumer purchasing power."

The same could be said today. Automation, robotization and computerization have stripped many jobs out of the economic system and this has resulted in the centralization and concentration of assets and economic power in the hands of a few large corporations. Deunionization has also caused the weakening of the forces of labor with respect to the forces of capital. The plain truth is that the capitalist system has a declining need for human labor except of the most menial type with a few positions at the top for the super well educated. What they really need are human consumers. The problem is that a consumer without a job is a non-consumer.

So if there is no demand because consumers lack jobs, there will be a limited amount of products manufactured. Even if demand is ramped up by the government just handing out money as has been done recently, companies won't necessarily hire new workers. They will just run the machines longer. And start-ups don't offer any salvation either because they are able to automate and computerize even as they start up. It doesn't take years for them to shed labor in favor of automation; they are able to take advantage of labor saving technology from the start. Therefore, I don't think the traditional roll of start-ups in creating jobs necessarily holds true any more.

Billionaire Koch Brothers Attempt to Use System to Rewrite California Environmental Laws

California's Prop. 23, backed by oil giants with a lot to lose, needs to go down in flames

It's up to voters to save the state from big oil interests.

By Steve Lopez

September 5, 2010, from the LA Times

I don't mean to disturb your holiday weekend just when you're trying to scrub that grease off the barbecue grill. But I thought now was a good time to remind you that in two months, you'll have an important choice to make about the air you breathe.

In November, you'll be asked whether California should continue on the path to becoming one of the world's environmental leaders. Or give up the good fight and pray that the global warming deniers are right.

I'm talking about Proposition 23, which comes to us courtesy of some of the finest corporate citizens America has to offer. We begin with Texas oil giants Valero and Tesoro, which both have refineries in California and are together sinking millions into the campaign to rewrite environmental standards here.

Then there's a company owned by oil billionaires Charles and David Koch, which has kicked $1 million into the Prop. 23 kitty. Those two cowboys have earned themselves a reputation for sponsoring campaigns that deny the need for renewable energy and also for backing groups that have trained "tea party" activists.

Still enjoying your holiday?

The goal of Prop. 23 is to derail the environmental plan we already have in place, one that was written without the help of Texans or tea party crackpots. It's called the Global Warming Solutions Act, drafted by state legislators and signed in 2006 by Gov. Arnold Schwarzenegger. Scheduled to begin rolling out next year, it would require a reduction of carbon dioxide emissions to 1990 levels by 2020.

But compliance would cost energy companies a few bucks. And so they came up with Prop. 23, which would delay implementation of California's landmark legislation until unemployment drops to 5.5%. I'm not a betting man, but I'm not sure that will happen before the polar ice caps melt and Seal Beach and Oxnard, among other coastal locales, are under water.

Now here's a shocker for you — Valero and Tesoro are among the state's top polluters. And cleaning up their act will cut into profits. So over the next eight weeks, they'll try to frighten you into believing that if California doesn't get off this tree-hugging kick, we'll all be out of work and out of gas.

In truth, yes, in the short term fuel costs may rise a bit, and vehicle costs as well, along with some energy bills. And Prop. 23 proponents say we're dreaming if we think one state can have an impact on global warming and pollution.

But foes of Prop. 23 argue that in doing the right thing for the environment, California can lead the way for the nation, as it has in the past with things like automobile fuel efficiency. And in this case, the state would also reap the benefits of a new economy built around green technology.

So yes, a lot is at stake, and those stakes were raised last week in Sacramento. On the last hoary night of a disastrous legislative session, a pair of bills that would have required California to continue weaning itself from highly polluting energy sources went down in flames, thanks in part to the muscle of Pacific Gas & Electric.

State Sen. Joe Simitian (D-Palo Alto), the author of that losing proposition, told me the loss "makes it all the more pressing that Proposition 23 is defeated." Simitian also happened to be a co-author of the 2006 warming solutions act that is now threatened by Prop. 23, and he said California has to step up, now, and reaffirm its image as the potential home of a new economy.

"When you send that signal to the market, the market responds by sending talent and dollars to California," said Simitian, who thinks there's a chance of a Silicon Valley-type explosion of jobs. "If we don't send that signal … then those dollars are going to go to some other state or some other country."

There is nothing evil or nefarious in what Valero and Tesoro are doing, said Fadel Gheit, a former oil industry executive who's now an energy analyst for Oppenheimer & Co. in New York.

"It's not personal and it's not emotional. It's business, and they're in the business of creating value for their shareholders," said Gheit. But, he added, "we are in bed with the worst people in the world because of our dependence on oil," and, as in the past, California can be the place where radical change begins.

We're already on the way, said V. John White of the Center for Energy Efficiency and Renewable Technologies. He said roughly 20 wind, solar and geothermal energy projects are under way in places where natural resources are great and unemployment is high.

"That's happening in Riverside County, San Bernardino, Kern and Imperial counties," White said.

Those are places with red-state politics, which sets up an interesting political conversation. What happens when tea party kooks try to beat back job prospects out there?

As my colleague George Skelton pointed out, the certifiably conservative George Shultz — a Reagan and Nixon official — is campaigning against Prop. 23, because he thinks that reducing our dependence on fossil fuels is crucial for national security.

And Schwarzenegger, fishing a shallow stream for a legacy, is flexing what little muscle he has left to fight the "greedy" Texans, as he calls them.

"We will continue moving this state forward," he said in June, "with our comprehensive energy policy that creates jobs, reduces our reliance on foreign oil and ensures the California we love will be the California we hand over to the next generation."

What Now: In Addition to Spending Billions on War in Afghanistan, We Have to Bail Out Their Friggin Banks, Too!

Afghan Bank Bailout: U.S. Works To Prop Up Kabul Bank To Prevent Crisis

AP/Huffington Post First Posted: 09- 4-10 02:25 PM   |   Updated: 09- 4-10 04:53 PM

***UPDATE*** The Times has updated their story with comments from U.S. Treasury officials insisting that no American money will be used to recapitalize the Kabul Bank: "'No American taxpayer funds will be used to support Kabul Bank,' said Jenni LeCompte, a Treasury Department spokeswoman."

---

The New York Times reports that the U.S. has agreed to assist the Afghan government in bailing out that nation's largest bank in order to prevent a nationwide financial crisis:

Details of the deal, including how much each government would contribute, were still being worked out on Saturday between the Central Bank of Afghanistan and the United States Treasury Department, officials said...

Top officials at Kabul Bank and a senior leader at the Central Bank declined to comment publicly on the proposed bailout, which was still being negotiated. However a manager at the Central Bank and a senior American official confirmed what the American official called an "intervention."

 

Crowds gathered at Kabul Bank branches around the capital to withdraw dollar and Afghan currency savings, with customers saying they had lost faith in the bank's solvency following a change in leadership and reports that tens of millions of dollars had been lent to political elites for risky real estate investments.

"Kabul Bank has lost the trust of the people. Even the chairman resigned so all the people are concerned," said Mohammad Nawaz, head of an Afghan aid group who had tried for three hours to withdraw the $15,000 in his account.

The bank run that began earlier in the week undermines efforts by the central government to build an efficient political and financial system to drag Afghanistan out of its dire poverty.

Problems at the bank could also have wide-ranging political repercussions since it handles the pay for Afghan public servants, soldiers and police in the unstable nation beset by a Taliban insurgency, widespread drug trafficking and the plundering of aid money.

While there was little apparent sign of panic, the deputy commander of the international coalition in Afghanistan said contingency plans were being drawn up to respond in the event of unrest.

"We're prepared to deal with the unexpected," Lt. Gen. Sir Nick Parker said.

Kabul Bank's woes further underscore entrenched problems with cronyism and corruption, with millions of dollars in deposits allegedly loaned to relatives and friends of the ruling elite to buy property in financially troubled Dubai.

The New York Times and The Wall Street Journal reported Wednesday that Kabul Bank's losses could exceed $300 million -- more than the bank's assets. In addition, The Washington Post said Afghanistan's central bank had ordered Kabul Bank's newly resigned chairman to hand over $160 million in Dubai real estate holdings.

On Thursday, President Hamid Karzai reassured anxious bank customers, saying every penny of their deposits would be guaranteed by the government.

"The Kabul Bank is safe," Karzai said in comments echoed by the country's central bank governor and independent banking association.

Calls to bank executives rang unanswered Saturday and it wasn't clear how much had been withdrawn. People hoping to take money out were given numbers but many had yet to be served when branches closed at noon as is customary.

University student Ahmad Fahim held number 1,724, but tellers had made it only to number 200 late in the morning. He planned to return Sunday to try again to withdraw his family business' funds and close the account.

"We've never had any problems with Kabul Bank, but after the news broke, we decided to take our money out," the 23-year-old said.

Fahim said his father had no plans to open a new account and would distribute the cash among the homes of relatives for safekeeping. State-owned banks imposed burdensome limits on the amount of money that could be transferred, while other private banks were even less trustworthy than Kabul Bank, he said.

Given such limited options, Kabul Bank could still be the best bet for Afghans with cash holdings, with its nationwide network of branches and automated teller machines and ability to provide financial services such as loans, bill paying and money transfers.

Mohammad Habib Angar, a calligrapher, said he was taking out most of his Afghan and dollar savings, but wasn't ready to close his account.

"I will wait to see what will happen next. If the bank is able to create confidence, for sure I will put my money back in Kabul Bank because I do not want to close my account," Angar said.

The Real Lesson of Labor Day

by Robert Reich

Friday, September 3, 2010

Welcome to the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor — most of the rest of us — are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, which, when added to the loss of public-sector (mostly temporary Census worker jobs) resulted in a net loss of over 50,000 jobs for the month. But at least 125,000 net new jobs are needed to keep up with the growth of the potential work force.

Face it: The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working. Near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package, along with tax credits for small businesses that hire the long-term unemployed have all failed to do enough.

That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them.

1. The Origin of the Crisis

This crisis began decades ago when a new wave of technology — things like satellite communications, container ships, computers and eventually the Internet — made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago.

But for years American families kept spending as if their incomes were keeping pace with overall economic growth. And their spending fueled continued growth. How did families manage this trick? First, women streamed into the paid work force. By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did).

Second, everyone put in more hours. What families didn’t receive in wage increases they made up for in work increases. By the mid-2000s, the typical male worker was putting in roughly 100 hours more each year than two decades before, and the typical female worker about 200 hours more.

When American families couldn’t squeeze any more income out of these two coping mechanisms, they embarked on a third: going ever deeper into debt. This seemed painless — as long as home prices were soaring. From 2002 to 2007, American households extracted $2.3 trillion from their homes.

Eventually, of course, the debt bubble burst — and with it, the last coping mechanism. Now we’re left to deal with the underlying problem that we’ve avoided for decades. Even if nearly everyone was employed, the vast middle class still wouldn’t have enough money to buy what the economy is capable of producing.

Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income.

It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.

The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.

What’s more, the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns — sometimes that’s here, but often it’s the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result.

Meanwhile, as the economy grows, the vast majority in the middle naturally want to live better. Their consequent spending fuels continued growth and creates enough jobs for almost everyone, at least for a time. But because this situation can’t be sustained, at some point — 1929 and 2008 offer ready examples — the bill comes due.

2. What We Learned and Didn’t Learn From the Great Depression of the 1930s

This time around, policymakers had knowledge their counterparts didn’t have in 1929; they knew they could avoid immediate financial calamity by flooding the economy with money. But, paradoxically, averting another Great Depression-like calamity removed political pressure for more fundamental reform. We’re left instead with a long and seemingly endless Great Jobs Recession.

THE Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures — Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage — leveled the playing field.

In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America’s middle class shared more of the economy’s gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs.

By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but it’s not nearly enough.

3. What Else Should Be Done

What else could be done to raise wages and thereby spur the economy? I don’t pretend to have all the answers but some initiatives seem worthwhile.

[Pause for a commercial announcement. These points, and others, are developed at length in my upcoming book, “AFTERSHOCK: The Next Economy and America’s Future,” out in two weeks from Alfred Knopf.]

We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. The carbon tax would raise the prices of goods and services especially dependent on carbon-based fuels, which is appropriate given that the social costs of carbon-based fuels should be included in their prices. Consider how much our society now spends on such things as foreign wars designed to secure our sources of oil, as well as oil cleanups. But the wage subsidies would more than make up for these price rises, at least for most Americans in the middle and below.

Another step would be to exempt the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000. This, too, seems reasonable, given that under current law only the first $106,000 of income is subject to the Social Security portion of the payroll tax – a particularly regressive system. Most higher-income people, who get good medical care, live longer and collect far more in Social Security benefits, than do lower-income people.

In the longer term, Americans must be better prepared to succeed in the global, high-tech economy. Early childhood education should be more widely available, paid for by a small 0.5 percent fee on all financial transactions. Public universities should be free; in return, graduates would then be required to pay back 10 percent of their first 10 years of full-time income.

Another step: workers who lose their jobs and have to settle for positions that pay less could qualify for “earnings insurance” that would pay half the salary difference for two years; such a program would probably prove less expensive than extended unemployment benefits.

These measures would not enlarge the budget deficit because they would be paid for. In fact, such moves would help reduce the long-term deficits by getting more Americans back to work and the economy growing again.

Here’s the point. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth — and that’s good for everyone.

The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession.

The Great Jobs Depression Worsens, and the Choice Ahead Grows Starker

by Robert Reich

Friday, September 3, 2010

The Great Jobs Depression continues to worsen.

The Labor Department reports this morning that companies created ony 67,000 new jobs in August. That’s down from the 107,000 they created in July. And because the government laid off temporary Census workers, the economy as a whole lost 54,000 jobs.

To put this into perspective, we need 125,000 net new jobs a month just to keep up with the growth of the population and the potential workforce.

Think of it this way. The number of Americans willing and able to work but who cannot find a job hasn’t stopped growing since the start of 2008. All told, about 22 million Americans are now jobless. Add in those who are working part-time who’d rather be working full time, and we’re up to 25 million.

And because most families depend on two paychecks, the practical impact is almost double.

All this has a negative multiplier on the economy. If families can’t pay their bills, their mortgages become delinquent (that’s why mortgage delinquencies keep rising), their credit card bills go unpaid (we’re seeing a notable rise in credit card defaults), and they can’t afford to buy anything other than necessities (hence auto sales have plummeted, new homes sales are down, and retail sales are in the pits).

As a result, more and more businesses decide to lay off workers (or refrain from adding them) because they can’t sell the goods and services they produce.

The last time we saw anything on this scale was in the 1930s. The last time we did anything about this on the scale necessary to reverse the trend was in the 1930s and 1940s.

It is not that America is out of ideas. We know what to do. We need massive public spending on jobs (infrastructure, schools, parks, a new WPA) along with measures to widen the circle of prosperity so more Americans can share in the gains of growth (exempting the first $20K of income from payroll taxes and applying the payroll tax to incomes over $250K, for example).

The problem is lack of political will to do it. The naysayers, deficit hawks, government-haters and Social Darwinists who don’t have a clue what to do would rather do nothing. We are paralyzed.

If there was ever a time for bold government action it is precisely now. Obama should be storming the country, demanding the largest responses to the jobs emergency in history. He and the Dems should be giving Republicans hell for their indifference to all this.

Instead, Obama is all over the map — a mosque controversy, an Israeli-Palestinian peace talk (that may take years to complete if ever), a symbolic withdrawal from Iraq, and lots of little tax-cutting ideas.

Senate and House Democrats, meanwhile, are on the defensive. Polls even suggest Dems may lose the House and possibly even the Senate in November.

Business leaders have either gone silent or gone reactionary, as they did in the 1930s.

But the pain and suffering of tens of millions continue. Government revenues continue to drop, and the safety nets and public services they rely on are subject to even more cuts. 

Ever wonder why the nation is turning isolationist and xenophobic? Why we’re lashing out at undocumented immigrants, even though fewer are here now than a few years ago; why the rise of anti-Islam feeling now, although 9/11 was nine years ago? Why the virulence and hate-mongering on right-wing radio, and the surliness in the blogosphere?

The practical choice we face is this: Either major action to reverse the jobs emergency or years of intolerably high unemployment coupled with demagoguery and scapegoating.

What Good Are Large Corporations? They Neither Provide Jobs Nor Pay Taxes.

by John Lawrence

Large corporations only exist to sell us stuff. They offshore most of their jobs, and they don't pay taxes. Through various accounting tricks they realize their profits in countries where there are no taxes like the Cayman Islands. They only maintain a post office box there, but that's good enough for tax purposes to maintain that they are based there. So what is their involvement then in American lives? Why, they are here just to sell us stuff, pure and simple. End of story. And they are in every nook and cranny of American life. They are in every mall. They also destroy jobs and businesses by pushing out Mom and Pop stores all over America.

In addition to that, they are feeding at the government trough. Their extensive lobbying network ensures that they will not only pay no taxes, but they will also get taxpayer supported government subsidies. For example, last year Exxon Mobil, one of the most profitable US corporations, paid no taxes, but got a $156 million tax refund! How sweet! While many were losing their houses to foreclosure, Exxon Mobil posted $19 billion in profits in 2009.

This is just another example of how major US corporations offshore jobs, pay little or no taxes and extract subsidies from government:

But what’s more interesting about this story is Exxon’s effective income tax rate. Exxon has over the past couple years paid a U.S. federal income tax that is about 10 percent lower than its non-U.S. effective tax rate. Other oil companies also pay less, and in some years this difference has approached 50 percentage points. Oil companies pay less in U.S. taxes in part because they receive generous tax subsidies. These subsidies will cost the U.S. government about $3 billion next year in lost revenue and nearly $20 billion over the next five years. Tax expenditures are government spending through the tax code. They are distributed through deductions, exclusions, credits, exemptions, preferential tax rates, and deferrals. What makes them look different from grants or checks is that they are delivered through the tax code as part of tax expenditure spending programs. These tax expenditures can amount to a significant portion of federal subsidies for oil and gas. The cost of tax expenditure programs for oil and gas companies made up about 88 percent of total federal subsidies in 2006. As Jeffers stated, “I’m not in a position to make a judgment on the tax policy, but what it is we adhere to.” Tax expenditures are simply a function of our country’s tax policy. Exxon will continue to adhere to current tax policy, enjoying the tax subsidies it receives from it…unless Congress cuts these subsidies. And there’s good reason to believe that Congress should cut them. The billions in tax subsidies we spend each year should support government priorities that generate results and value for the American people. And it’s not clear that a few billion in subsidies for oil companies does much to impact their business decisions. According to estimates from the Office of Economic Policy at the Department of Treasury, removing subsidies for the oil industry would at most affect domestic production by less than one-half of 1 percent. Billions of dollars in tax subsidies can make or break some industries, but they may not be as important to oil companies. Even Exxon recognizes that other types of government action may affect its bottom line more than tax subsidies. Jeffers noted, “We are advocating for opening up public resources. [Support for oil companies] is fundamentally about what you want your public policy to do.” So billions in tax subsidies may not be doing much of anything. But who would look a gift horse in the mouth? Eliminating these billions could make a real difference to American taxpayers. Cutting this spending could help reduce our fiscal deficit. President Obama is creating a bipartisan commission to examine spending cuts that will reduce the deficit. The $20 billion saved over the next five years from eliminating these programs would be enough to cover this year’s Federal Drug Administration’s budget and the operations of the Smithsonian Institution, with a little left over. Or the federal government could use the savings to fund America’s transition to a clean energy economy by financing a Green Bank, making thousands of homes energy efficient, building new transmission lines, or extending financial supports for renewable energies. Real money is at stake. Tax expenditure spending programs should support public policies. Our country has made clear its commitment to clean energy. President Obama, along with 19 other world leaders at the G-20 conference in Pittsburg, signed a pledge to phase out subsidies for fossil fuels. If the government’s energy policy supports clean energy initiatives, it doesn’t make sense to put billions in tax subsidies for oil companies.

Many corporations like Halliburton have moved their headquarters out of the country. In Halliburton's case they moved to Dubai, yet they continue to suck at the government trough.

I think we as a democratic government should refuse to offer any government contracts or subsidies to non-US based corporations and should tax the hell out of them if they want to do business here. This would serve the purpose of creating companies in the US that are here not only to make profits for their CEOs and shareholders, but to provide jobs and to support the commons by paying their fair share of taxes. Corporations that employ Americans and provide jobs should get tax breaks. All others should pay through the nose for the privilege of selling into the American consumer market.

Also, US companies that locate plants abroad and then import into the American market should pay tariffs. This would not actually violate any free trade agreements because we wouldn't be charging tariffs on other countries' products entering the American market. We would only be charging tariffs on American companies reimporting products into the US which couild be manufactured here, providing jobs here. This seems almost like a no brainer, but then our political system is controlled by large corporations through their lobbyists and not in the interests of the American people. It can  hardly be called a democracy any more. It's an oligopoly with wealthy corporations plying Washington with their amply funded lobbyists.

It has been estimated that rich people and corporations are avoiding paying $100 billion per year in taxes by offshoring profits. This is ridiculous. The government is going broke, and we're allowing the offshoring of profits?! American citizens are going without jobs, and we're allowing the offshoring of jobs?! The Obama administration is not doing enough to correct these problems. Sure they're doing a little bit which is more than the Republicans would have done, but it's not enough. But where is the movement on the left which would address this. Answer: there is none. The only movement is the Tea Party movement funded by the billionaire Koch brothers whose main goal is to make the situation even worse for themselves and the rest of the American middle class by giving even more tax breaks to the wealthy, giving even more to the military-industrial complex (actually this might be feathering their own nests because many of them might be employed there), and giving even more government subsidies to large profitable corporations like Exxon Mobil while eliminating or vitiating government social safety net programs like social security and medicare.

US government policy has been responsible for creating the situation which allows the offshoring of jobs and profits, which allows rich people and corporations to pay little or no taxes and which allows large corporations like Wal-Mart to push out locally owned Mom and Pop stores making every American mall a homogeneous zone populated by the same store chains and franchises nation wide. This situation can be changed by revising those policies and enacting policies which would encourage the onshoring of jobs, the encouragement of locally owned Mom and Pop stores, the encouragement of family owned, as opposed to corporate owned, farms and the requirement that the rich and wealthy corporations pay their fair share of taxes instead of receiving government subsidies. But none of this will happen until there is a grass roots movement on the left equivalent to the Tea Party.

 

 

Top 10 Reasons for Higher Taxes on the Top 1%

Published on Thursday, September 2, 2010 by CommonDreams.org

by Paul Buchheit

Funding for our country's children is being cut, but we allow a hedge fund manager to make enough money to pay the salaries of every public school teacher in New York City. Most of his earnings are taxed at a rate less than that of his secretary.

We haven't been able to do anything about it because the cry of 'socialism' from the top generates fear in the minds of average Americans. It's a meaningless cry. Here are ten reasons why the wealthiest 10% of us, and especially the richest 1%, should be paying higher taxes.

1. Benefits to the rich (and everyone else)

Americans with land and expensive houses have the most to lose by failing to support national security and a clean environment and infrastructure repair. And they have a lot to lose from the growing levels of crime and violence. Researchers Richard Wilkinson and Kate Pickett have documented numerous studies that correlate economic inequality with shorter life expectancies, increased disease and health problems, and higher rates of murder and other forms of violence.

About their book "The Spirit Level: Why Equality is Better for Everyone," Wilkinson says: "We quote a prison psychiatrist who spent 25 years talking to really violent men, and he says he has yet to see an act of violence which was not caused by people feeling disrespected, humiliated, or like they've lost face. Those are the triggers to violence, and they're more intense in more unequal societies, where status competition is intensified and we're more sensitive about social judgments."

2. Correcting the redistribution of income to the rich

The richest 1% took $7 of every $100 of America's income in 1980. They have increased that to $20 of every $100 today. In just one generation they've TRIPLED their cut of the pie. Most of the gains by the rich were not 'earned' in the sense of production, innovation, inventiveness. They didn't work 3 times harder than everyone else as they tripled their share. They benefited from tax cuts and deregulation.

3. Correcting the redistribution of income from the poor

Since 1980 our country's productivity has steadily risen, with total income doubling approximately every 10 years. If the bottom 90% of America, most of whom have not been lazy, had shared in this prosperity at a level consistent with 1980 incomes, they would be making $45,000 a year instead of $35,000.

Change to Win, a coalition of union organizations, notes that the high point for wages was in 1972 when union membership reached 28%. Workers are now "earning only 83 cents of every dollar they earned more than 35 years ago, while their productivity has increased a dramatic 80%."

4. Outmoded tax brackets

Our tax system is stuck at 1980s levels. As noted by The New Yorker economist James Surowiecki, "Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent...This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James's dentist: same difference."

5. Inequality to instability

As explained by Time's economics writer Stephen Gandel, "Consider what [money held by the very rich] is doing now. It is adding to our economic problems not helping. For the most part it is not money being spent and trickling down. Instead it just adds to that global pool of money that sloshes around our financial markets and creates all types of bubbles...it actually makes our economy prone to booms and busts, and less stable."

6. Instability to catastrophe

The current level of inequality is equivalent to that of the years just before the Great Depression. There is reason to suspect that this level of income inequality is dangerous to our economy. The only other year since 1913 that the wealthy claimed such a large share of national income was 1928, when the top 1% share was 23.9%. The following year, the stock market crashed, which led to the Great Depression. After peaking again in 2007, the U.S. stock market crashed in 2008, leading to what some are now calling the "Great Recession."

7. The Tax Myth

The belief that the "rich pay most of the taxes" is incorrect. The truth comes from the U.S. Congressional Budget Office and the Internal Revenue Service. It's true that the top-earning 1% of Americans pay 23% of their incomes in federal income taxes, while the lowest-earning half of Americans pay only 3%. But top earners pay 5% of their incomes in state and local taxes (sales, property, and income taxes), while low earners pay 10%. Top earners pay 2% of their incomes toward social security, compared to 9% for low earners. Top earners pay 0% (i.e., a negligible portion) of their incomes in federal excise taxes (e.g., tobacco, alcohol and gasoline), while low earners pay 2%. Top earners save another 1% through the Bush tax cuts, while low earners see little benefit. So total taxes for top earners are 29% of their incomes. Total taxes for low earners are 24% of their incomes.

Beyond this, the US Department of Housing and Urban Development and the American Gas Association concur that low-income households pay over 20% of their incomes for utilities, while high-income households pay less than 4%. As a result, total taxes and utilities for top earners consume 33% of their incomes. Total taxes and utilities for low earners consume 44% of their incomes.

8. The Consumption Myth

The belief that rich stimulate the economy is another myth. If anything, the poor stimulate the economy. Low-income earners have a higher "Marginal Propensity to Consume," which means that they spend a greater percentage of their overall income on consumption. High-income earners, on the other hand, will hold more in investments. A University of California study showed that from 1980 to 2003 the share of capital income (stocks, interest, dividends) owned by the richest 1% grew from 37% to 57%.

It's not just rich individuals holding the money. The 500 largest non-financial corporations are currently sitting on $1.8 trillion in cash.

9. Wealth with Honor

Although our country is built on capitalism, wise American business leaders have recognized the danger of the "free hand" of unregulated open markets. Adam Smith, the father of capitalism believed that unrestricted businesses tend to engage in "conspiracy against the public." John Kenneth Galbraith said "Capitalism left to its own devices, doesn't work properly; it excludes the poor, ruins the environment, and fails to deliver enough collectively produced goods, such as roads, reservoirs, schools and hospitals."

Teddy Roosevelt (in 1910, exactly 100 years ago) criticized the "small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power...We grudge no man a fortune in civil life if it is honorably obtained and well used...We should permit it to be gained only so long as the gaining represents benefit to the community...I think we have got to face the fact that an increase in governmental control is now necessary."

Taxes were raised on the rich shortly after Roosevelt's speech, and the United States gradually became a middle class nation.

More recently, Warren Buffett and Bill Gates have been trying to convince the rich of their responsibility to society. "Responsible Wealth," a project of United for a Fair Economy, is a network of over 700 business leaders and wealthy individuals in the top 5% of income and/or wealth in the US who advocate for fair taxes and corporate accountability.

(10) As the Tea Party argues, there should be no new taxes. On 90% of us.

Paul Buchheit is a faculty member in the School for New Learning at DePaul University.

10 Ways to Solve the Jobs Problem

Published on Friday, September 3, 2010 by YES! Magazine

Imagine a no-holds-barred "summit" that comes up with ideas to solve both our job and environmental problems. What might it come up with?

by Fran Korten

As the midterm political season heats up, one word on every politician's lips is "jobs." And for good reason. People are hurting-they can't pay their mortgages, send their kids to college, pay their dental bills. Young people are wondering if they have a place in the work world.

So the economic pundits cheer when car sales go up, housing starts rise, consumer confidence strengthens. But as the oily ooze in the Gulf tars yet another beach, we all sense something is terribly wrong. We can't keep tearing up the planet to keep ourselves employed. There must be another way. 

So-imagine a no-holds-barred "summit" that comes up with ideas to solve both our job and environmental problems. What might it come up with? Here is my starter list. You can add your own ideas in the comments to this article on the YES! website.

 1. More farms, less agribusiness. Agribusiness substitutes chemicals and machinery for labor and employs remarkably few people. Small organic farms are far more productive per acre and bring the people back.

 2. More repair, fewer products. Instead of tossing those shoes, that toaster, that computer, let's fix them-and employ repair people in the process.

 3. More recycling, less mining. Ray Anderson of the Interface flooring company says we already have enough nylon to meet the world's carpet needs forever. The same may be true for aluminum, steel, copper, and other easily recyclable materials. We just need good systems for recovering them.

 4. More renovations, less construction. Our nation has 129 million housing units. We build new ones and let old ones deteriorate. How about renovating what we have and in-filling our cities to use existing sidewalks, gas pipes, water mains, and roads?

What if we stopped subsidizing advertising with tax breaks and focused on educating people to lead satisfying lives?

 5. More restoration, less destruction. Whether it's forests, Superfund sites, or oil-laced wetlands, it's time to restore. Some restoration can even pay for itself, as in restoration forestry where folks make products from the fire-prone, small-diameter trees normally considered too small to market.

 6. More bike paths, fewer highways. They both cost money, but one is good for our health and good for the planet. What's not to like?

 7. More local businesses, fewer megastores. Locally owned stores employ more people per goods sold and you can often talk to a decision-maker about your purchase.

 8. More dishwashing, fewer throw-aways. What if we got rid of all the disposable containers in fast food restaurants? At my friend Ron Sher's Crossroads Shopping Center near Seattle, the food court vendors share a common crockery supply. No trees needed. It works.

 9. More education, less advertising. Let's face it. Advertising is about making us feel inadequate for something we don't yet have. What if we stopped subsidizing advertising with tax breaks and focused on educating people to lead satisfying lives?

10. More clean energy, less fossil fuel. Here we do need new stuff-wind turbines, solar panels, insulation, passenger trains. Politicians are providing some-though not enough-funding for these sources of "green jobs." It's the other items on this list they're not even talking about-but need to.

You may be thinking that my list isn't realistic because these options cost more or depend on government funding. But that's partly because governments subsidize oil, agribusiness, nuclear plants, ports, highways, advertising, and other unhealthy choices.

So the next time you hear a politician talk about jobs, try comparing the solutions offered to this list. By breaking out of the narrow range of options that keeps policy discussions stuck, we can create jobs that not only sustain families, but also build community and restore the living systems of our planet.

This column was written for A Resilient Community, the Fall 2010 issue of YES! Magazine.

This work is licensed under a Creative Commons License

Fran Korten is publisher of YES! Magazine.

White House Considers Pre-midterm Package of Business Tax Breaks to Spur Hiring

By Anne E. Kornblut and Lori Montgomery

Washington Post Staff Writers
Thursday, September 2, 2010; 11:06 PM

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks - potentially worth hundreds of billions of dollars - to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Administration officials have struggled to develop new economic policies and an effective message to blunt expected Republican gains in Congress and defuse complaints from Democrats that President Obama is fumbling the issue most important to voters. Following Obama's vacation and focus on foreign policy in recent weeks, White House advisers have arranged a series of economic events for the president next week, including two trips to swing states and a news conference.

"We'll continue to do everything we can, understanding that recovery will require persistent effort. There are no silver bullets," senior Obama adviser David Axelrod said in an interview Thursday. "At the same time, we have to make clear our ideas and theirs, and the fact that the Washington Republicans, having helped create this recession, have attempted to block our every effort to deal with it."

But with the unemployment rate expected to rise again in jobs numbers due out Friday, panic is setting in among many Democratic candidates who fear it is too late for Obama to convince voters that he understands the depth of the nation's economic woes and can fix them.

White House officials cautioned that no tax cuts have been settled on and that a more limited measure could emerge. Policy staffers are debating a range of options. For example, a payroll-tax holiday - a top priority of many business groups - could be applied only to new hires or extended to current employees. It could be limited to small businesses or extended to larger firms.

Timing problems

If administration officials can agree on a policy path, it is not clear that it would be approved in the current environment on Capitol Hill. And even if Congress did approve new measures to bolster the economy, they would probably come too late to make a difference in the lives of recession-weary voters before the midterms.

"Substantively, there is nothing they could do between now and Election Day that would have any measurable effect on the economy. Nothing," said the Brookings Institution's William Galston, who was a domestic-policy adviser to President Bill Clinton.

Over the past year, with the jobless rate hovering near 10 percent, Obama has repeatedly promised to shift from other matters to the economy. He did so again this week, saying during his Oval Office address on Iraq that he would turn to the economy "in the days to come."

But some Democratic candidates and political operatives feel the president is not doing enough to help them keep control of Congress, privately expressing frustration that Obama has recently emphasized issues other than the economy.

"We did the mosque, Katrina, Iraq, and now Middle East peace?" said a Democratic strategist who works closely with multiple candidates and spoke on the condition of anonymity. "And in between you redo the Oval Office? It has become a joke."

Many economists say Obama's policies have been reasonably effective at pulling the nation back from recession. Last year's stimulus package - now estimated to cost $814 billion - protected as many as 3.3 million jobs, according the independent Congressional Budget Office.

Nonetheless, Obama's efforts to give the economy another boost have been stymied since the spring, when members of both parties became keenly aware of rising public concern about the national debt.

Election Day looms

Last November, Obama announced that he would turn his attention to unemployment, calling it "one of the great challenges that remains in our economy." He declared the same intent two months later, telling House Democrats he would focus relentlessly on job creation "over the next several months." Senior aides went on television pledging that the mantra would become "jobs, jobs, jobs."

But other matters - health care, the BP oil spill - continually stole the limelight, creating the impression, some Democrats complain, that the president was barely focused on the economy at all.

His advisers described his attentiveness - noting, for example, that he discussed the economy with New York Mayor Michael R. Bloomberg (I) for 15 minutes before golfing - but got little traction.

"Obviously it's going to be hard to get anything done before the election, but it's really important for him to try, and to make the case to the American people that he's trying to do something and the Republicans aren't letting him," said Steve Elmendorf, a Democratic strategist. "We are at the final moments here."

Obama has another incentive to act: Tax cuts enacted during the George W. Bush administration are scheduled to expire in January, and Democrats - accused by Republicans of plotting to let them vanish - feel compelled to do something before the midterms.

Obama campaigned on a pledge to let cuts expire for the richest 2 percent of households, but some Democrats say the economy is too weak to raise anyone's taxes right now. And they fear a backlash from small-business owners who could be hit with higher taxes.

Pairing targeted business tax breaks with an extension of middle-class tax cuts could help alleviate those problems.

Permanently extending the research credit would cost roughly $100 billion over the next decade, tax analysts said. And depending on its form and duration, a payroll-tax holiday could cost more than $300 billion. While costing significantly less than last year's stimulus package, both ideas would be far more dramatic than anything the White House has so far acknowledged considering.

More spending on infrastructure, particularly transportation projects, is also under discussion. But it would be easier for a package composed purely of tax cuts to "avoid the stain of a 'bailout' or 'stimulus' label," said one official familiar with the talks, speaking on the condition of anonymity because the deliberations were private.

The president could roll out additional measures as soon as next week. Senate leaders hope to begin debating the tax issue in late September.

Obama will speak in the Rose Garden at 10 a.m. Friday after the release of the new jobs numbers.

[email protected] [email protected]

 

Unemployment Increases Because More People Are Looking For Jobs

Unemployment 9.6 Percent; Private Jobs Up 67,000

by The Associated Press

 Graph: Tracking U.S. Monthly Unemployment

September 3, 2010

Private employers hired more workers over the past three month than first thought, lifting hopes for the weak economy. But the unemployment rate rose in August for the first time in four months as more people entered the market looking for work.

Companies added a net total of 67,000 new jobs last month and both July and June's private-sector job figures were upwardly revised, the Labor Department said Friday.

Stock futures surged after the report was released. Wall Street analysts expected a smaller gain, according to Thomson Reuters.

Overall, the economy lost 54,000 jobs as 114,000 temporary census positions came to an end. For the first time this year, the manufacturing sector lost jobs — down a net total of 27,000 for the month. State and local governments shed 10,000 positions.

Temporary employment rose by nearly 17,000, after ticking down in July.

The jobless rate rose to 9.6 percent from 9.5 percent in July. More than a half-million Americans resumed their job searches in August, which drove up the jobless rate. When the unemployed stop looking for work, they are no longer counted in the jobless rate. It's the first time the labor force has grown since April.

Both June and July's figures were revised to show the private sector created more jobs in both months. The July figures were revised upward to 107,000 from 71,000. June was revised upward to 61,000 from 31,000. The revisions reflected smaller losses in construction, temporary help services and non-census government jobs.

Still, hiring has now been weak for four straight months. That deprives consumers of cash and reduces their ability to spend. That is one of the main reasons economic growth is likely to be so weak for the rest of this year that the jobless rate could keep rising and hit 10 percent in the coming months.

Hidden Corporate Scandal: CEOs Who Laid Off the Most Workers Rake in the Most Treasure

AlterNet / By Sarah Anderson

CEOs are throwing workers onto the unemployment rolls and dodging taxes to boost short-term profits and fatten their own paychecks.

September 1, 2010 

And indeed, the business press has had a field day with the saga of Mark Hurd, the Hewlett-Packard chief who was recently fired for falsifying expense reports to conceal a relationship with a woman from a truly bizarre TV dating show.

After starring in a few soft porn movies, Jodie Fisher, a 50-year-old with Lady Godiva tresses, got a gig in 2007 on NBC’s "Age of Love," in which a male tennis pro was to choose a mate from groups of over-40 “cougars” or under-30 “kittens.”

Fisher didn’t get the red rose, but she did get a contract job with HP. Her task: introduce Hurd to clients at parties. Seriously -- you can get paid for that. But then Fisher claimed she lost the job because she wouldn't sleep with Hurd. He said she was merely on the wrong end of conscientious cost-cutting, but he paid her off anyway. The board got wind of the sexual harassment settlement, discovered the phony expense reports and gave Hurd the ax.

Titillating? Mildly. The biggest scandal at HP? Hardly. The biggest scandals at HP haven't made the headlines because they are so commonplace in Great Recession Corporate America. CEOs in one company after another are throwing workers onto the unemployment rolls and dodging taxes to boost short-term profits and fatten their own paychecks. They are shifting the burden of a poor economy onto the public purse -- while continuing to line their own pockets.

According to a new report by the Institute for Policy Studies, CEOs from the 50 firms that have laid off 3,000 or more workers since the onset of the crisis took home nearly $12 million on average in 2009. That’s 42 percent more than the average for CEOs of S&P 500 firms as a whole. 

At HP, Hurd made $24.2 million in 2009, while cutting 6,400 jobs. That was on top of 24,600 layoffs he announced in September 2008 after a merger with EDS. His slash and burn, merge and purge approach was a stark departure from the “no-layoff” policy of HP cofounders William Hewlett and David Packard, who built the company from a garage operation into a global giant. 

Messrs. Hewlett and Packard seemed to understand what more and more research is showing: Mass layoffs are often bad for business. Employers have to deal with morale problems among remaining staff and then all the costs related to hiring and training new workers when conditions improve. A University of Colorado survey of S&P 500 companies from 1982 to 2000 found no evidence that downsizing leads to increased returns on assets. In fact, stable employers — companies that have less than 5 percent annual staff turnover — outperformed companies that had major layoffs. 

Today’s Hewlett-Packard illustrates still another troubling trend that has largely escaped the headlines: massive corporate tax avoidance. 

Under current law, U.S. corporations face a 35 percent tax rate on corporate profits. Hewlett-Packard, under Hurd, sent $47 million to Uncle Sam in 2009 federal corporate income taxes, a mere 2 percent of the company’s reported $2.6 billion in pretax domestic net income. 

As a result of various tax avoidance schemes, U.S. corporate income taxes overall have plummeted from almost a third of all non-Social Security federal tax revenues in the 1960s to only a sixth of total taxes today, according to Citizens for Tax Justice. 

Since paying taxes apparently gives rich execs the hives, it’s routine for big companies to shield their CEOs from taxes on perks. In 2009, HP gave Hurd $29,028 in such “tax gross-ups” to offset taxes related to his use of the company’s private jet and other perks. Over the past three years, Hurd’s gross-ups have totaled $137,924.

After the board gave Hurd the blade, he walked away with a severance payout of cash and stock estimated at more than $28 million. That should tide him over until his next executive post, which may not be long. According to the Wall Street Journal, Hurd claims he received a recruiter call the day after he left HP.

Meanwhile, who knows how many of the tens of thousands of HP employees who have lost their jobs are stuck collecting unemployment checks. That’s the real scandal at HP. 

Sarah Anderson is a co-author of the new Institute for Policy Studies report, Executive Excess 2010: CEO Pay and the Great Recession.

Corporations Sitting on Mountains of Cash Use It To Buy Other Companies Not To Hire Workers

Published on Wednesday, September 1, 2010 by CommonDreams.org

Billions for Acquisitions, Nothing for US Workers

Trickle-Down Mythology: Corporations Sitting on Mountains of Cash and Workers be Damned

by Sandy LeonVest

When PBS’ corporate-friendly Nightly Business Report (NBR) airs a story at the top of its newscast about a major blockage in the corporate ‘trickle-down’ pipe, you know the jig is up.

On August 30th, NBR did just that.

In her setup to this fascinating little segment, NBR host Susie Gharib opened with the words: “Well, American companies are sitting on a pile of cash. But they're not using it for hiring. They are using the money for deal-making.”

The story that followed pretty much confirmed what most Americans have suspected all along: So-called ‘trickle-down’ economics never did work as advertised. And when it comes to spreading the wealth, corporate trickle down is turning out to be a very bad joke -- one that American workers don’t find very funny.

Introducing her story, NBR correspondent Erika Miller announced: “Consumers are not the only ones holding on tightly to their cash these days. Corporations are too … Non-financial companies in the Standard & Poor's 500 have a record $837 billion in cash in their coffers.”

“That’s enough to pay 2.8 million workers -- basically, the entire population of Chicago -- $100,000 a year for three years.”

“But,” added Miller, “one of the few places companies are spending money is on is on mergers and acquisitions. With one day left, August already has the highest value of global M&A deals this year.”

Notably, only days before the NBR story was aired, Thomson Reuters had released a study revealing that a whopping $200 billion worth of corporate deal-making took place in the month of August alone – that’s $200 billion in mergers and acquisitions (known as M&A’s in corporate circles). The study was followed by an August 27th Reuters report sporting the following headline: “August's $200-billion in takeover announcements is unlikely to provide enough of a spark to energize equity markets fretting about another dip in global growth.”

Yet, while Reuters waxed anxious about “energizing equity markets,” their concern with record US unemployment seemed oddly limited -- to the problems those unemployment numbers posed for investors.

“The steady flow of bleak data on the US jobs market and consumer spending on both sides of the Atlantic over the past few weeks has been at the heart of investors' worries, and the prospect of an M&A tide is adding to fears over jobs,” wrote Reuters.

What the news agency didn’t mention was anything about how far the billions spent on M&As might have gone toward “putting America back to work.”

So much for corporate America’s professed commitment to that worthy goal.

Damn the workers, full speed ahead
 
By now, anyone familiar with 21st century ‘corporatese,’ understands that when corporate news agencies refer to “the economy,” they are actually talking about corporate profits – jobs or no jobs.

So, when NBR’s Erika Miller observes that corporate mergers often lead to layoffs, and hastens to add that Americans “may take some comfort in knowing that a flurry of deal-making is often a positive sign about the outlook for the economy,” we know what she means.

These corporate elites don’t give a damn about unemployment numbers. Well, they care, but only insofar as those numbers impact their bottom line. Which explains why, on August 20th, despite an anticipated loss of another 100,000 jobs in August, Public Radio’s Alisa Roth glibly observed on MarketPlace: “A lot of companies have saved so much money, they can pay cash [for their acquisitions]. And it's cash they don't necessarily know what else to do with.”

“When the stock market's valuation is low,” added MarketPlace guest and equity analyst Brad Hintz, “it's actually cheaper to go out and buy whole companies … than it is to go out and hire workers and invest in new plants and equipment.”

Trickle down was (and still is) DOA – can we please admit it now?

Back in 2001, economist Thomas Sowell wrote in Capitalism Magazine: “There has never been any school of economists who believed in a trickle down theory. No such theory can be found in even the most voluminous and learned books on the history of economics. It is a straw man.”

Sowell’s words were never more true than they are today.

Oh, and by the way, NBR wrapped up its ‘corporate hoarding’ segment with this intriguingly ‘corporatesque’ outro:

Scott Wren (Wells Fargo Equity Strategist): “Right now people are hesitant to hire because they're able to pick up companies, do it quicker, build their business quicker, at least in a strategic sense, without having to hire new people in, without having to train those people, without having all of the up-front costs that it takes to really organically grow the business you're in.”

Erika Miller: “So what will it take to get firms to abandon their cash-hoarding mentality and start hiring again? Experts say businesses need to see a strong recovery in consumer demand.

“And that's not expected as long as the job market remains weak.”

Sandy LeonVest is the editor and publisher of SolarTimes, an independent quarterly energy newspaper with a progressive slant. SolarTimes is available online at www.solartimes.org, and distributed in hardcopy throughout the Bay Area and beyond. Sandy LeonVest's work has been published locally, as well as internationally, and includes 15 years in the news department at KPFA Radio in Berkeley, CA.

Obama Wants Us To Forget the Lessons of Iraq

Published on Wednesday, September 1, 2010 by The New Republic

by Andrew Bacevich

The Iraq war? Fuggedaboudit. "Now, it is time to turn the page." So advises the commander-in-chief at least. "[T]he bottom line is this," President Obama remarked last Saturday, "the war is ending." Alas, it's not. Instead, the conflict is simply entering a new phase. And before we hasten to turn the page-something that the great majority of Americans are keen to do-common decency demands that we reflect on all that has occurred in bringing us to this moment. Absent reflection, learning becomes an impossibility.

For those Americans still persuaded that everything changed the moment Obama entered the Oval Office, let's provide a little context. The event that historians will enshrine as the Iraq war actually began back in 1990 when Saddam Hussein invaded Kuwait, Iraq's unloved and unlovable neighbor. Through much of the previous decade, the United States had viewed Saddam as an ally of sorts, a secular bulwark against the looming threat of Islamic radicalism then seemingly centered in Tehran. Saddam's war of aggression against Iran, launched in 1980, did not much discomfit Washington, which offered the Iraqi dictator a helping hand when his legions faced apparent defeat. 

Yet when Saddam subsequently turned on Kuwait, he overstepped. President George H.W. Bush drew a line in the sand, likened the Iraqi dictator to Hitler, and dispatched 500,000 American troops to the Persian Gulf. The plan was to give Saddam a good spanking, make sure all concerned knew who was boss, and go home. 

Operation Desert Storm didn't turn out that way. An ostensibly great victory gave way to even greater complications. Although, in evicting the Iraqi army from Kuwait, U.S. and coalition forces did what they had been sent to do, Washington became seized with the notion merely turning back aggression wasn't enough: In Baghdad, Bush's nemesis survived and remained defiant. So what began as a war to liberate Kuwait morphed into an obsession with deposing Saddam himself. In the form of air strikes and missile attacks, feints and demonstrations, CIA plots and crushing sanctions, America's war against Iraq persisted throughout the 1990s, finally reaching a climax with George W. Bush's decision after September 11, 2001, to put Saddam ahead of Osama bin Laden in the line of evildoers requiring elimination. 

The U.S.-led assault on Baghdad in 2003 finally finished the work left undone in 1991-so it appeared at least. Here was decisive victory, sealed by the capture of Saddam Hussein himself in December 2003. "Ladies and gentlemen," announced L. Paul Bremer, the beaming American viceroy to Baghdad, "we got him." 

Yet by the time Bremer spoke, it-Iraq-had gotten us. Saddam's capture (and subsequent execution) signaled next to nothing. Round two of the Iraq war had commenced, the war against Saddam (1990-2003) giving way to the American Occupation (2003-2010). Round two began the War to Reinvent Iraq in America's Image. 

With officials such as Bremer in the vanguard, the United States set out to transform Iraq into a Persian Gulf "city upon a hill," a beacon of Western-oriented liberal democracy enlightening and inspiring the rest of the Arab and Islamic world. When this effort met with resistance, American troops, accustomed to employing overwhelming force, responded with indiscriminate harshness. President Bush called the approach "kicking ass." Heavy-handedness backfired, however, and succeeded only in plunging Iraq into chaos. One result, on the home front, was to produce a sharp backlash against what had become Bush's War.

Unable to win, unwilling to accept defeat, the Bush administration sought to create conditions allowing for a graceful exit. Marketed for domestic political purposes as "a new way forward," more commonly known as "the surge," this modified approach was the strategic equivalent of a dog's breakfast. President Bush steeled himself to expend more American blood and treasure while simultaneously lowering expectations about what U.S. forces might actually accomplish. New tactics designed to suppress the Iraqi insurgency won Bush's approval; so too did the novel practice of bribing insurgents to put down their arms.

Yet as a consequence the daily violence that had made Iraq a hellhole subsided-although it did not disappear. 

Meanwhile, once hallowed verities fell by the wayside. U.S. officials stopped promising that Saddam's downfall would trigger a wave of liberalizing reforms throughout the Islamic world. Op-eds testifying to America's enduring commitment to the rights of Iraqi women ceased to appear in the nation's leading newspapers.

Respected American generals-by 2007, about the only figures retaining a shred of credibility on Iraq-disavowed the very possibility of victory. In military circles, to declare that "there is no military solution" became the very height of fashion.

By the time Barack Obama had ascended to the presidency, this second phase of the Iraq war-its purpose now inverted from occupation to extrication-was already well-advanced. Since taking office, Obama has kept faith with the process that his predecessor set in motion, building upon President Bush's success. (When applied to Iraq, "success" has become a notably elastic term, easily accommodating bombs that detonate in Iraqi cities and insurgent assaults directed at Iraqi forces and government installations.) 

Which brings us to the present. After seven-plus years, Operation Iraqi Freedom has concluded. Operation New Dawn, its name suggesting a skin cream or dishwashing liquid, now begins. (What ever happened to the practice of using terms like Torch or Overlord or Dragoon to describe military campaigns?) Although something like 50,000 U.S. troops remain in Iraq, their mission is not to fight, but simply to advise and assist their Iraqi counterparts. In another year, if all goes well, even this last remnant of an American military presence will disappear. 

So the Americans are bowing out, having achieved few of the ambitious goals articulated in the heady aftermath of Baghdad's fall. The surge, now remembered as an epic feat of arms, functions chiefly as a smokescreen, obscuring a vast panorama of recklessness, miscalculation, and waste that politicians, generals, and sundry warmongers are keen to forget. 

Back in Iraq, meanwhile, nothing has been resolved and nothing settled. Round one of the Iraq war produced a great upheaval that round two served only to exacerbate. As the convoys of U.S. armored vehicles trundle south toward Kuwait and then home, they leave the stage set for round three. 

Call this the War of Iraqi Self-Determination (2010-?). As the United States removes itself from the scene, Iraqis will avail themselves of the opportunity to decide their own fate, a process almost certain to be rife with ethnic, sectarian, and tribal bloodletting. What the outcome will be, no one can say with certainty, but it won't be pretty.

One thing alone we can say with assurance:As far as Americans are concerned, Iraqis now own their war. "Like any sovereign, independent nation," President Obama recently remarked, "Iraq is free to chart its own course." The place may be a mess, but it's their mess not ours. In this sense alone is the Iraq war "over."

As U.S. forces have withdrawn, they have done so in an orderly fashion. In their own eyes, they remain unbeaten and unbeatable. As the troops pull out, the American people are already moving on: Even now, Afghans have displaced Iraqis as the beneficiaries of Washington's care and ministrations. Oddly, even disturbingly, most of us-our memories short, our innocence intact-seem content with the outcome. The United States leaves Iraq having learned nothing.

 © 2010 The New Republic

Andrew J. Bacevich is a professor of history and international relations at Boston University.  His new book, Washington Rules: America’s Path to Permanent War, has just been published.  His other books include, The New American Militarism: How Americans Are Seduced by War, The Limits of Power: The End of American Exceptionalism (American Empire Project), and The Long War: A New History of U.S. National Security Policy Since World War II.

The Stock Market Rally Versus the World’s Economic Fundamentals

by Robert Reich

Wednesday, September 1, 2010

What passes for business reporting in the United States is too often a series of breathless reports about the stock market. When the Dow rises precipitously, as it did today (Wednesday), the business press predicts an end to the Great Recession. When the stock market plummets, as it did last week, the Great Recession is said to be worsening.

Pay no attention. The stock market has as much to do with the real economy as the weather has to do with geology. Day by day there’s no relationship at all. Over time, weather and geology interact but the results aren’t evident for many years. The biggest impact of the weather is on peoples’ moods, as are the daily ups and downs of the market.

The real economy is jobs and paychecks, what people buy and what they sell. And the real economy — even viewed from a worldwide perspective — is as precarious as ever, perhaps more so.

Today’s rally was triggered by news that one of China’s official measures of its growth – its Purchasing Managers Index – rose. The index had been in decline for three straight months.

Why should an obscure measurement on the other side of the world cause stock markets in New York, London, and Frankfurt to rally? Because China is so large and its needs seemingly limitless that its growth has been about the only reliable source of global demand.

Many big American companies have been showing profits because they’re doing ever more business in China while cutting payrolls at home. American consumers aren’t buying much of anything because they’ve lost their jobs or are worried about losing them, and are still trying to get out from under a huge debt load (the latest figures show more consumer debt delinquent now than last year and a surge in personal bankruptcies). The U.S. housing market is growing worse, auto and retail sales are dropping, and the ranks of the jobless continue to swell.

Europe is in almost as much a mess. The problem there isn’t just or even mainly that Greece and other nations on the “periphery” have too much public debt. A bigger problem is European consumers aren’t buying nearly enough to generate more jobs. Unemployment remains high, and the trend is bad. Manufacturing growth there has slowed to its weakest pace in six months. Yet bizarrely, Europe’s large economies – Britain, Germany, and France – are paring back their public budgets. It’s exactly the wrong time, and a recipe for disaster.

Germany’s so-called “job miracle” (as Chancellor Angela Merkel calls it) is more mirage than miracle. Most of the gains in employment there have come from part-time jobs, often at low pay. Average annual net income per German employee continues to drop. This explains why domestic demand there is so sluggish and why Germany is desperately dependent on its exports of machinery and manufacturing components to Asia, especially China.

Meanwhile, Japan, now the world’s third-largest economy, is a basket case. Japanese consumers aren’t buying much of anything, and why would they? The country is still in the grip of a deflationary cycle that shows no end. Japanese consumers reason if they can buy it cheaper next week there’s no reason to buy now. Basically the only thing keeping Japan’s economy going are its exports of cars and electronic components to China.

Australia is booming, but look closely and you see the same buyer. Australia is making a boatload of money selling its minerals and raw materials to China (Australia is fast becoming one big Chinese mine shaft). The Brazilian economy is soaring. Why? Exports of wheat and cattle to China. Middle East oil producers are getting richer. Why? China’s insatiable thirst for oil.

Elsewhere around the globe the picture is as uncertain. Much of Pakistan is under water. Much of the rest of the Middle East is under tyrannical or corrupt regimes. Russia has suffered such a dry spell it’s hoarding wheat. Despite its wealthy few, India’s masses are still terribly poor.

The stock market could plunge tomorrow or the next day because the world’s economic fundamentals are so precarious.

The global economy cannot be sustained by one big, voracious nation – especially one that’s suffering bouts of civil unrest, actively repressing dissent, suffocating under a blanket of pollution and coping with other environmental hazards, and whose biggest companies are run by the state.

The Iraq War: An Exercise in Futility and a Waste of Money

by John Lawrence

Want to know why the deficit is so high? How about giving credit to the Iraq war which was not only a huge waste of money, but even more importantly, the US strategic position in the Middle East is now in worse shape than before that war was started. The idea that we can go into a country and manufacture a political and economic system that will then be superior to what they had before is patent nonsense even given the fact that Saddam was a brutal dictator. Actually, he had been a US ally and he was mellowing out in his later years writing a novel just before the war began. (The picture on the left above shows Donald Rumsfeld, the Secretary of Defense that prosecuted the war, shaking hands in happier times with our erstwhile ally, Saddam.) Despite Saddam's literary pursuits and the fact that he had been a US ally, after he threatened to nationalize Iraqi oil, Saddam became, in the Bush administrations's telling of it, the US' arch enemy.

Any country in the world is not going to have their political and economic system imposed on them by the United States. This is trying to erect an edifice on quicksand in an earthquake zone. Political forces in Iraq are going to eventually determine what kind of system Iraqis will have, and in the meantime what goes on there may not be pretty. Political forces there may well manifest themselves in a Civil War. Eventually, to stem the chaos, a Saddam-like dictator may emerge, and we'll be right back where we started. How ironic that would be!

Now nine years later there are more than 4 million internally and externally displaced Iraqis. Electrical and other basic services are worse than before the war. The average Iraqi is worse not better off. There are 40,000 seriously wounded or dead American service people from "hostile causes," and another 40,000 dead or wounded from "non-hostile" causes. There are perhaps a million dead Iraqis because of the war. How is this at all worth it? $1 trillion is down the drain with the cost of caring for Americans wounded in the war likely to quadruple that figure.

The whole world knows that Bush lied us into the war, and then later joked about the "weapons of mass destruction." Iraqis presently hate us. What have we accomplished? We are worse off. A trillion dollars has been added to our national debt that could have been spent repairing American infrastructure. Iraqis are worse off, and the course of future events there has nothing to do with the supposed "ameliorative" effects of American involvement. Some pundits say "we have to wait and see what happens before we will know whether or not our effort there were a success." Nonsense. Events that will unfold there will have little or nothing to do with American involvement but they will have to do with political forces within Iraq unleashed by the US. Whether Iraq eventually becomes a stable country with a reasonable lifestyle for the majority of its people has to do with Iraqi efforts from now on and not what the US has done there. By every conceivable measure the US effort has only set back the course of civilization while undermining the fiscal soundness of the US itself. Enemies have only been created not pacified. The US tried to create a society in its own image or in a glorified neocon vision of what a society should be. That entails unrestricted laissez-faire capitalism with no social safety net and privatization of the oil fields.

The "100 laws" established by L. Paul Bremer head of the Coalition Provisional Authority have been written right into the Iraqi Constitution - such laws as those that allow foreign corporations to take 100% of their profits out of the country, establishing ridiculously low taxes on corporations of 15%, not allowing cases to be brought against foreign contractors in Iraqi courts, making them effectively above the law, not requiring the hiring of Iraqi citizens for the rebuilding of Iraq etc. etc.

Although the original goal of the Bush administration was to privatize and capitalize on Iraq's oil, the achievement of that goal was largely botched with the result that China, without having fired a shot, ended up getting some of the plum oil contracts. The Iraqi government and the China National Petroleum Corporation have signed a contract in Beijing that could be worth up to $3 billion. The US tried to impose its own neocon values on Iraq in terms of an economic and political system which had nothing to do with Iraqi values. Its attempts to impose an ultra right wing version of capitalism is written into their Constitution which is probably as worthless as the paper it's written on.

Saddam at least was a bulwark against Iran. Now that the Shiites are in charge in Iraq, Iran is the winner since they are a Shiite country that has strong ties to Iraq's Shiites. Iran and Iraq will probably form an alliance now that the US is gone which leaves the US in a more precarious position than it was in before the war started and shifts the geopolitical balance not in the US' favor. All that money spent and the outcome is that the Iraqi people are worse off, a lot of them are dead or injured, and the US position is worse off strategically, fiscally and in terms of the sacrifice in young men and women, dead and wounded. At least I give Obama credit for ending the insanity, and I believe he will resist the temptation to send troops back in when things go awry, a temptation kneejerk warmongers Bush and McCain wouldn't have resisted.

 

 

 

 

 

 

 

Two Wars Don’t Make a Right

By Robert Scheer

The carnage is not yet complete, and President Barack Obama’s attempt to put the best face on the ignominious U.S. occupation of Iraq will not hide what he and the rest of the world well know. The lies that empowered George W. Bush to invade Iraq represent an enduring stain on the reputation of American democracy. Our much-vaunted system of checks and balances failed to temper the mendacity of the president who acted like a king and got away with it. 

It is utter nonsense for Obama, who in the past has made clear his belief that the Bush administration’s case for this war was a tissue of lies, to now state: “The United States has paid a huge price to put the future of Iraq in the hands of its people.” We paid a huge price simply to assuage the arrogance of a president that was unfettered by the restraints of common sense expected in a functioning democracy. Particularly shameful was the betrayal by the Congress and the mass media of the obligations to challenge a president who exploited post-9/11 fears to go to war with a nation that had nothing whatsoever to do with that attack. 

With hundreds of thousands of Iraqis and Americans dead and maimed and at a cost of $3 trillion to American taxpayers, the U.S. imperial adventure in Iraq has left that country in a horrible mess, controlled by a corrupt and deeply divided elite that shows no serious inclination to effectively govern. Nor can there be a claim of enhanced U.S. security when the real victors are the ayatollahs of Iran, whose influence in once bitterly hostile Iraq is now immense. The price in shattered lives and dollars will continue, as Iraq remains haunted by ethnic and religious conflict that we did so much to provoke.

Remember when most of the once respected mass media, and not just the obvious lunatics on cable, bought the Bush propaganda that democracy in Iraq, a harbinger of a new Middle East, was just around the corner? They based that absurd expectation on the fact that an Iraqi ayatollah disciple of the ones ruining Iran could order millions of his followers to hold up purple fingers. What a joke we have made of the ideal of representative democracy when Iraq is operating under an incomprehensible constitution, which our proconsul ordered, and is still without a functioning government six months after an election that our media once again dutifully celebrated.

Mark the obit on this disaster by John Simpson, the highly regarded BBC world affairs editor, writing Tuesday from Baghdad that “nowadays it is hard to find anyone who sees America as a friend or mentor.” Dismissing the original American expectation that the overthrow of Saddam Hussein would expand democracy in the Middle East, Simpson concludes: “On the contrary, America’s position in the Middle East has been visibly eroded. … America seems to have shrunk as a direct result of its imperial adventure in Iraq.”

The one positive outcome is that with the formal end of the U.S. occupation many Americans have finally learned the lesson that imperialism does not pay. While Bush fiddled with a nonexistent terrorist threat from Iraq, the U.S. economy burned and the oil loot that some thought would make it all worthwhile never materialized. Remember when the neoconservatives were riding high and Paul Wolfowitz assured a supine Congress that Iraqi oil would pay for it all?

Nor did the invasion even make more secure our access to Mideast oil while competitors like China were busily securing foreign energy rights to shore up their bustling economies. Obama acknowledged this reality in his speech when he stated, “We must jump-start industries that create jobs, and end our dependence on foreign oil.” 

For all his talk about turning our attention homeward, Obama reveals his obsession with the imperial adventure in Afghanistan, where “because of our drawdown in Iraq, we are now able to go on offense.” Once again there is the expectation that the occupied will embrace the occupiers and that the deployment of massive military power “will disrupt, dismantle and defeat al-Qaida,” as if that is any longer relevant to our deep involvement in a treacherous civil war in which we have no reliable partners.

Al-Qaida was never present in Iraq before we invaded, and according to Obama’s own national security adviser, there are fewer than a hundred members of the group left in Afghanistan, unable to coordinate any actions. Obama deserves credit for extracting this country from a war in Iraq that he inherited, but it is mind-numbing that in his nation-building efforts in Afghanistan he is now repeating the same errors that were made in Iraq.

Click here to check out Robert Scheer’s new book, “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”