California Free Press

Deficit Hawk Hypocrites

Posted on Fri, Aug. 24, 2012

By SEN. BERNIE SANDERS |

last updated: August 24, 2012 08:11:33 AM

Mitt Romney, Paul Ryan and the Republican Party are now mounting a massive attack against Social Security and other programs. Using "deficit reduction" as their rationale, they are attempting to dismantle every major piece of legislation passed since the 1930s that provides support and security to working families.

They are being aided by at least 23 billionaire families, led by the Koch brothers and Sheldon Adelson, who are spending hundreds of millions of dollars in this campaign as a result of the disastrous Citizens United Supreme Court decision. Despite paying the lowest effective tax rate in decades, the billionaires want more tax breaks for the very rich. Despite the fact that the elimination of strong regulations caused the Wall Street meltdown and a terrible recession, the billionaires want more deregulation. Despite outsourcing of millions of good-paying American jobs to China and other low-wage countries, the billionaires want more unfettered free trade.

At this pivotal moment in American history, it's important to note how we got into this deficit crisis, who was responsible and what is the fairest way to address it.

Let us never forget that when Bill Clinton left office in 2001, this country enjoyed a healthy $236 billion SURPLUS.

Under George W. Bush and his fellow "deficit hawks," we went to war in Afghanistan and Iraq. Bush and Congress "forgot" to pay for those wars that will end up adding some $3 trillion to our national debt. Where were Paul Ryan and the other "deficit hawks" when we spent trillions on wars and added to the deficit? They voted for those policies.

Under George W. Bush and his fellow "deficit hawks," we gave huge tax breaks to the wealthiest people in this country, which cost $1 trillion over a decade. Where were Paul Ryan and the other "deficit hawks" when Bush and Congress spent a trillion dollars on tax breaks for the very rich and added to our national debt? They voted for those policies.

Under George W. Bush and his fellow deficit hawks, Congress passed an overly expensive Medicare prescription drug program written by the insurance companies and drug industry. The government was barred from negotiating lower drug prices with the pharmaceutical industry under the program, which will end up adding $400 billion to our national debt over a 10-year period. Where were Paul Ryan and the other "deficit hawks" when Bush and Congress spent $400 billion for a much too expensive prescription drug program? They voted for those policies.

Now, having run up huge deficits, our born-again "deficit hawks" want to cut every program in sight to save money. In order to cover the costs they incurred in Iraq and Afghanistan, they want to cut Social Security. In order to cover the costs of the tax breaks for the rich, they want to cut Medicare and Medicaid. In order to cover the insurance-company-written Medicare prescription drug program, they want to cut education and food stamps.

This approach - balancing the budget on the backs of the elderly, the sick, the children and the poor - is not only immoral, it is bad economic policy. It is something that must be vigorously opposed.

The $16 trillion national debt and the current $1 trillion deficit are serious problems, but they must be addressed in a fair way that will not cripple our economy, lead to the loss of jobs and punish people who are already hurting.

At a time when the wealthiest people in this country are doing phenomenally well and when their effective tax rate is the lowest in decades, the richest people in this country have got to be asked to pay their fair share of taxes.

At a time when corporate profits are soaring and when about one in four major profitable corporations pays nothing in federal income taxes, we must end corporate loopholes and demand that corporate America starts paying its fair share of taxes.

At a time when this country loses $100 billion every single year because wealthy people and corporations stash money in tax havens in the Cayman Islands and elsewhere, we must crack down on abusive tax cheats.

The United States military budget has virtually tripled since 1997, and we now spend nearly as much as the rest of the world combined. It is time to take a hard look at military spending.

There are serious and responsible ways to move this country toward deficit reduction. Unfortunately, that's not what Romney and Ryan are talking about. For them, it's the same old Republican saga: more tax breaks for millionaires and billionaires, and more austerity and pain for the most vulnerable people in this country.

ABOUT THE WRITER

Sen. Bernie Sanders of Vermont, the longest-serving independent in congressional history, is a member of the Senate Budget Committee. Readers may write to him at 332 Dirksen Building, U.S. Senate, Washington, D.C. 20510.

2012 Bernie Sanders

Copyright 2012

Are You Eating Genetically Modified Foods Laced With Pesticides?

by John Lawrence from the San Diego Free Press, August 28, 2012

In a quest to eat a healthier diet, I made smoothies containing a couple scoops of a soy protein product I bought at Trader Joe's. I also started eating a lot of berries, high in anti-oxidants, which are supposed to be good for you. Then one day I woke up and realized that the soy I had be eating was actually genetically modified (GMO) soy created by the Monsanto Corporation for the sole purpose of being resistant to Monsanto's Roundup, a powerful herbicide which will kill every plant in a soybean field except genetically modified soy plants. So the soy I had been eating was not only GMO soy containing herbicide within its seeds, but it had been drenched in a powerful herbicide prior to having been harvested and brought to market.

Same thing for the berries. They are highly sprayed with pesticides and herbicides so that whatever healthful properties they may have possessed are completely compromised by the poisons being ingested. Grapes are the most highly sprayed product out there. Even drinking wine unless it's organic gives you a high dose of toxicity. Doctors may tell you that it is healthy to have a glass of wine with dinner, but unless it's organic wine, you'r getting a dose of pesticide and herbicide along with it. In 2010 411,828 pounds of Roundup were applied to wine grapes in California. A 2009 study found that even one glass of wine a day increased women's chances of getting cancer. It seems that the anti-oxidant cancer fighting effects of wine are counterbalanced by the pesticide and herbicide laced grapes that it is made from.

The Bush administration approved the use of methyl iodide on strawberries despite scientific evidence that it wasn't safe for human consumption. Unless you are buying organic strawberries you are getting a dose of it every time you eat them. Arnold Swarzenegger also approved its use in California in the final days of his administration despite the fact that 54 eminent scientists including six Nobel Laureates testified that methyl iodide is one of the most toxic chemicals on earth.This chemical is getting into California's food and water supplies and causing harm to agricultural communities surrounding the fields where it's being used, not to mention the workers who pick the strawberries. Governor Brown has said he will take a "fresh look" at the chemical, but so far your best protection is to eat organic berries be they strawberries, raspberries, blueberries or blackberries. Each year nearly 1 billion pounds of pesticides are sprayed on the fields and orchards of America. 

The latest development in the Monsanto Roundup nightmare is that, despite the best efforts of corporate America to have their soybean fields weed free so that they can be harvested with $185,000 tractors and little hired labor maximizing profits, weeds themselves have evolved to be "Roundup Ready". These super weeds cannot be extinguished with Roundup despite repeated sprayings. They are threatening to take over American fields. So now we're in an arms race between Monsanto which is developing even more potent herbicides to be sprayed on crops which the American people are destined to ingest and the super weeds which continue to evolve. Roundup Ready GMO crops now account for 90% of US soybeans and 70% of US corn. These food products are what you are buying at Ralphs, Vons, Safeway and other American super markets as well as what you are eating at most restaurants.

Dow Chemical Corporation has come up with a GMO corn variety called Enlist which has been specifically developed to not be killed by even more potent chemicals developed to kill the super weeds. And the chemical industry pressures farmers to use their products and drench their fields with pesticides rather than grow organically and use natural methods of weed control because there is no money in it for them if farmers abandon chemically based weed control. But it's not only super weeds that we need to be concerned about. Super bugs and insects have evolved that are resistant to Roundup Ready GMO corn!

According to a recent NPR report:

There can be little doubt that genetically engineered crops are the most dangerous aspect of modern agriculture. Not only are we seeing rapid emergence of super-weeds resistant to glyphosate, courtesy of Roundup Ready crops, we now also have evidence of emerging Bt-resistant insects. Add to that the emergence of a brand new organism capable of producing disease and infertility in both plants and animals, and a wide variety of evidence showing harm to human health, and the only reasonable expectation one can glean is that humanity as a whole is being seriously threatened by this foolhardy technology.

Instead of reducing the need for manual labor which the introduction of Roundup Ready crops promised, we are now seeing farmers hiring workers to manually go through fields hoeing out the giant pigweeds and ragweeds that Roundup is not able to kill. Add to this the bad news that global warming is killing off crops for lack of water and you have a real dilemma.

The way I used to feel about the American food supply was that for the most part it wouldn't kill you immediately. It might take 30 or 40 years until you collected enough chemical toxins in your liver or pancreas to instigate a siege of cancer. However, there is a growing body of evidence that it is becoming increasingly likely that you will be killed more or less immediately if you are unlucky enough to eat meat contaminated with e coli or salmonella. Each year 1 in 6 Americans gets sick from a foodborne disease. According to Center for Disease Control (CDC) estimates, more than 125,000 Americans are hospitalized and 3,000 die each year from microbial pathogens including salmonella, e coli, and listeria. Estimates of the cost of foodborne illness in terms of health care and lost productivity exceed $75 billion a year. So while your chances of being killed or injured due to a car accident are greater (40,000 deaths and 3 million injured per year), your chances of getting sick from a foodborne disease (1 in 6) is even greater than your chances of being injured in a car crash (1 in 100). And incidences of Salmonella in particular are increasing year over year. In 2010 FoodNet detected 8,256 cases of salmonella poisoning, with 2,290 hospitalizations and 29 deaths.

In Fast Food Nation, Eric Schlosser explains why foodborne disease is on the increase. Basically, it's because of the unsanitary conditions in which corporate farmers raise, slaughter and process animals for human consumption. Chickens are kept in such crowded quarters that workers have to go through every day and weed out the dead ones throwing them in the dumpster. They are hardly allowed to turn around while they are being fed a diet of antibiotics and hormones which will fatten them to the slaughter in the least number of days. Beef cows are slaughtered and processed by low wage workers, mainly illegal immigrants, unfamiliar with proper food handling procedures, who work on sped up assembly lines where numerous mistakes are made with regard to sanitation and the workers' own safety.

In the slaughtering and processing of cows, it is very important that fecal material does not contaminate the meat, but a USDA study found that 78.6 percent of the ground beef contained microbes that are spread primarily by fecal material. This is what is served in fast food hamburgers as well as the hamburger you buy at the supermarket. As Schlosser observes," [There is] a simple explanation for why eating a hamburger can now make you seriously ill: There is shit in the meat." If a cow's hide has been inadequately cleaned, chunks of manure can fall off it into the meat. The contents of a cow's digestive system can get onto the meat. Inexperienced "gutters" spill manure quite often. Workers forget to clean and disinfect their knives. A contaminated knife spreads germs to everything it touches. The overworked, often illiterate workers in the nation's slaughterhouses do not understand the importance of good hygeine. They drop meat on the floor and place it right back on the conveyor belt.

In 1993 San Diego based Jack in the Box was implicated in a breakout of hemolytic uremic syndrome. Kids in Seattle were being hospitalized at an alarming rate. The outbreak was traced to undercooked hamburgers at a local Jack in the Box restaurant which disclosed the prescence of e coli 0157:H7 in the hamburgers. More than 700 people in four states were sickened; more than 200, hospitalized and 4 died. Lauren Beth Rudolph ate a hamburger at a San Diego Jack in the Box. She was admitted to hospital on Christmas Eve in terrible pain. She died in her mother's arms on December 28, 1992. She was six years old.

A government official compared the sanitary conditions in a modern feedlot to those in a crowded European city during the Middle Ages, when people dumped their chamber pots out the window, raw sewage ran in the streets, and epidemics raged. Cattle packed in feedlots live in pools of manure, eat dirty food and drink dirty water. Feedlots have become efficient mechanisms for circulating e coli. Nevertheless, a Federal judge allowed Supreme Beef Processors to sell beef to schools for school lunches even after the plant was shut down for Salmonella contamination in 1999.

At present the nation's 200,000 fast food restaurants are not subject to any oversight from Federal health authorities. Far more Americans are severely harmed every year by food poisoning than by illegal drug use. People who smoke crack know the inherent dangers; people who eat hamburgers usually don't. And most of the harm is done to children. The American culture of deregulation has done more to protect the meat packing industry than it has done to protect Americans who consume their products.

The American food supply both in terms of vegetables and meats has been compromised by herbicides, pesticides, hormones, antibiotics and preservatives. The only way that you can protect yourself is to eat and drink organic products. Even there you have to believe that the label "organic" means what it says. With lack of oversight who knows how many cheaters there are who are claiming their products are organic when they really aren't. And the food industry is lobbying to downgrade what the meaning of organic is so they can label their products as organic including GMO products. In Europe GMO products have been outlawed for years although the food industry continues to chip away at this state of affairs and argue for their introduction

One wonders whether the death of Apple founder Steve Jobs due to pancreatic cancer had anything to do with his dietary habits. Jobs was a vegan so you might assume he ate large quantities of soy products and vegetables. Were his dietary choices organic? If not were the very products he and others consumed, while thinking that they were eating healthfully, actually contributing to their long term demise. It's something to think about. Health food is not alway healthy.

The Romney-Ryan Economic Plan: Take from the Poor and Give to the Rich

 

The Five Reasons Why the Ryan-Romney Economic Plan Would Be A Disaster for America

Mitt Romney hasn’t provided details so  we should be grateful he’s selected as vice president a man with a detailed plan Romney says is “marvelous,” “bold and exciting,” “excellent,” “much needed,” and “consistent with” what he’s put out.

So let’s look at the five basic features of this “marvelous” Ryan plan.

FIRST: It  would boost unemployment because it slashes public spending next year and the year after, when the economy is still likely to need a boost, not a fiscal drag. It would be the same austerity trap now throwing Europe into recession. According to the Economic Policy Institute, Ryan’s plan would mean 1.3 million fewer jobs next year than otherwise, and 2.8 million fewer the year after.

SECOND: Ryan would take from lower-income Americans and give to the rich – who already have the biggest share of America’s total income and wealth in almost a century. His plan would raise taxes on families earning between 30 and 40 thousand dollars by almost $500 a year, and slash programs like Medicare, food stamps, and children’s health What would Ryan do with these savings? Reduce taxes on millionaires by an average of almost $500,000 a year.

THIRD: Ryan wants to turn Medicare into vouchers that won’t keep up with the rising costs of health care – thereby shifting the burden onto seniors. By contrast, Obama’s Affordable Care Act saves money on Medicare by reducing payments to medical providers like hospitals and drug companies.

FOURTH: He wants to add money to defense while cutting spending on education, infrastructure, and basic research and development. America already spends more on defense than the next five biggest military spenders put together. Our future productivity depends on the public investments Ryan wants to cut.

FIFTH AND Finally, Ryan’s budget doesn’t even reduce the federal budget deficit – not for decades. Remember: He’s adding to military spending, giving huge additional tax cuts to the very rich, and stifling economic growth by cutting spending too early.  The Center for Budget and Policy Priorities estimates Ryan’s Roadmap would push public debt to over 175 percent of GDP by 2050.

So there you have it. The Ryan – Ryan-ROMNEY – economic plan.

And the five reasons why it would be a disaster for America.

(Please watch the video — and share.)

The Republican National Convention: Where Social Darwinism Meets Theocracy

by Joseph A Palermo

from Huffington Post, 8/26/2012

At the 1988 Republican National Convention, Vice President George H.W. Bush talked about a "kinder and gentler" America. Four years later Patrick Buchanan scared the hell out of the country by declaring a "culture war." In 2000 George W. Bush gave us "compassionate conservatism." The Bush stratagems were cunning responses to focus groups and public opinion polls that show beating up on the poor and the weakest among us can make people feel uncomfortable. In 2012 we can expect more culture war rhetoric, but it will be clouded by the soothing sounds of reasonableness and moderation.

The trick thus far for the Romney-Ryan ticket has been to pretend to want to "save" Medicare even while putting forth Ryan's "voucher" plan that would end Medicare, not only "as we know it," but end Medicare period. The lies and distortions about their schemes for privatizing Medicare (which have been swirling around Republican circles for decades) are the 2012 election's equivalent of "kinder and gentler" and "compassionate conservatism": empty slogans designed to beguile voters.

What we'll hear all week at the RNC are expressions of an ideological witch's brew, a fusion of Ayn Rand's Social Darwinism with the Reverend Jerry Falwell's vision of an American Theocracy. Rand glorified sociopaths. Falwell believed the Bible foretold a nuclear Armageddon. They've got no choice but to pander to their Christian evangelical base as well as to their corporate overlords; a bone goes to Tony Perkins of the Family Research Council while a juicier chunk of meat will go to the Koch brothers.

The Romney-Ryan Republicans are giving us Rand's Social Darwinist economic prescriptions, which hold that if an individual lacks the wherewithal to thrive in a "free" capitalist society that person deserves to die in a gutter somewhere, merged with Falwell's social diktats banning abortion (even in cases of rape and incest), gay bashing, a militarized foreign policy, and a continuation of the "War on Drugs."

If they advocated only the Randian side of the equation there at least would be no restrictions on abortion, gays could go their merry way, and everybody could smoke weed. Things like school prayer, the 10 Commandments in public buildings, abstinence-only sex "education" would be laughed out of court. Conversely, if they gave us a truly "Christian" set of governing principles, (as opposed to the Falwell strain), omitting the Randian Social Darwinism, we'd at least get a government that cared a little bit about the poor, took care of the weak, and might not be so quick to go to war.

As it stands, we get the Social Darwinism without the libertarianism, and the religious strictures on individual behavior without the compassion for the poor and the valuing of peace. In other words, we get the worst of both ideologies.

This epistemological schizophrenia is secular yet religious, amoral yet moralizing.

And lo and behold! The Republicans' idée fixe just happens to serve perfectly the interests of the ruling corporate elite in American society! It's a menu of ideas that give the 1 percent everything it wants. (The Supreme Court's ruling that money equals speech and corporations deserve stronger Constitutional safeguards than people codify this worldview.)

It's as though with every minute of right-wing talk radio, every 24-hour news cycle at Fox, and every spittle of words strung together by Romney, Huckabee, Priebus, Ryan, and the rest of them at the convention, they have set out to prove to the world that power equals knowledge, and the ideas that are the most widely disseminated in any society are those that best serve the narrow class interests of its ruling elite.

It's kind of funny that a tropical storm is heading toward Tampa right when the GOP is kicking off its lovefest. Since about 1900 the American people have looked to the federal government for help when their locales are hit with natural disasters -- you know, the government we're all supposed to despise.

Add It Up: Taxes Avoided by the Rich Could Pay Off the Deficit

Published on Monday, August 27, 2012 by Common Dreams

by Paul Buchheit

Conservatives force the deficit issue, ignoring job creation, and insisting that tax increases on the rich wouldn't generate enough revenue to balance the budget. They're way off. But it takes a little arithmetic to put it all together. In the following analysis, data has been taken from a variety of sources, some of which may overlap or slightly disagree, but all of which lead to the conclusion that withheld revenue, not excessive spending, is the problem.

1. Individual and small business tax avoidance costs us $450 billion.

The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion. In way of confirmation, an independent review of IRS data reveals that the richest 10 percent of Americans paid less than 19% on $3.8 trillion of income in 2006, nearly $450 billion short of a more legitimate 30% tax rate. It has also been estimated that two-thirds of the annual $1.3 trillion in "tax expenditures" (tax subsidies from special deductions, exemptions, exclusions, credits, capital gains, and loopholes) goes to the top quintile of taxpayers. Based on IRS apportionments, this calculates out to more than $450 billion for the richest 10 percent of Americans.

2. Corporate tax avoidance is between $250 billion and $500 billion.

There are numerous examples of tax avoidance by the big companies, but the most outrageous fact may be that corporations decided to drastically cut their tax rates after the start of the recession. After paying an average of 22.5% from 1987 to 2008, they've paid an annual rate of 10% since. This represents a sudden $250 billion annual loss in taxes. Worse yet, it's a $500 billion shortfall from the 35% statutory corporate tax rate.

3. Tax haven losses range from $337 billion to $500 billion.

The Tax Justice Network estimated in 2011 that $337 billion is lost to the U.S. every year in tax haven abuse. It's probably more. A recent report placed total hidden offshore assets at somewhere between $21 trillion and $32 trillion. Using the lesser $21 trillion figure, and considering that about 40% of the world's Ultra High Net Worth Individuals are Americans, and factoring in an annual 6% stock market gain based on historical records, the tax loss comes to $500 billion.

4. That's enough to pay off a trillion dollar deficit. Reasonable tax changes could pay it off a second time:

(a) A non-regressive payroll tax could produce $150 billion in revenue.

Get ready for some math. The richest 10% made about $3.84 trillion in 2006. A $110,000 salary, which is roughly the cutoff point for payroll tax deductions, is also the approximate minimum income for the richest 10%. A 6.2% tax paid on $1.43 trillion ($110,000 times 13 million payees) is about $90 billion. The lost taxes on the remaining $2.41 trillion come to about $150 billion.

(b) A minimal estate tax brings in another $100 billion.

The 2009 estate tax, designed to impact only the tiny percentage of Americans with multi-million dollar estates that have never been taxed, returns about $100 billion per year.

(c) A financial transaction tax (FTT): up to $500 billion.

The Bank for International Settlements reported in 2008 that annual trading in derivatives had surpassed $1.14 quadrillion (a thousand trillion dollars!). The Chicago Mercantile Exchange handles about 3 billion annual contracts worth well over 1 quadrillion dollars. One-tenth of one percent of a quadrillion dollars could pay off the deficit on its own.

More conservative estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group suggest FTT revenues of a half-trillion dollars annually.

Add it all up, and we've paid off the deficit, almost twice. More importantly, the avoided taxes and a few other sensible taxes could provide sufficient revenue for job stimulus without cutting the hard-earned benefits of middle-class Americans.

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at [email protected].

Top 10 Lies Told by Monsanto on GMO Labeling in California

by Michele Simon from the Huffington Post 8/22/12

The battle in California over Proposition 37, which would require labeling of foods containing GMOs, is really heating up. Millions of dollars are already being poured into the opposition campaign, with much of it going to former Big Tobacco shills.

Over at GMO HQ, Monsanto recently posted this missive called "Taking a Stand: Proposition 37, The California Labeling Proposal," in which the biotech giant explains why it is opposing the measure (to the tune of $4.2 million so far).

Even for a corporation not exactly known for its honesty and transparency, this brief webpage is riddled with deception and outright falsehoods about the initiative and its proponents. Here are the 10 most blatant examples:

1) The law "would require a warning label on food products."

No warning label would be required. Rather, the words "partially produced with genetic engineering" or "may be partially produced with genetic engineering" would be required on the back of the package -- similar to what is now required for ingredient or allergen labeling. For whole foods, like the sweet corn coming soon to a Walmart near you, a sign would be posted on the store shelf with the words "genetically engineered." The aim is simply to offer consumers additional information about the contents of the foods they purchase.

2) "The safety and benefits of these ingredients are well established."

Unfortunately, no long-term studies exist on either the safety or benefits of GMO ingredients, so Monsanto has no basis for making such a claim. Indeed, the U.S. Food and Drug Administration does not even require safety studies of genetically engineered foods. Meanwhile, some independent studies raise questions about links to allergies and other potential health risks.

3) "The American Medical Association just re-affirmed that there is no scientific justification for special labeling of bioengineered foods."

This statement, while true, is taken out of context and is misleading because the AMA also (for the first time) called for mandatory premarket safety studies of GMOs. As Consumers Union recently noted in its reaction to AMA's announcement, labeling and testing logically go together:

The AMA's stance on mandatory labeling isn't consistent with its support for mandatory pre-market safety assessments. If unexpected adverse health effects, such as an allergic reaction, happen as a result of GE, then labeling could perhaps be the only way to determine that the GE process was linked to the adverse health effect.

4) Food companies "have had the choice" to use GM ingredients.

Choice is a good thing; however, consumers have never had the choice. Prop 37 will give consumers a long-overdue choice about eating genetically engineered food.

5) "FDA says that such labeling would be inherently misleading to consumers."

Of course FDA refuses to require GMO labeling, thanks to Monsanto's arm-twisting that began more than 20 years ago. Food Democracy Now's Dave Murphy explained the FDA decision in May upon its 20-year anniversary, which came as a result of a broader deregulatory push by the first Bush administration:

Twenty years ago this week, then-Vice President Dan Quayle announced the FDA's policy on genetically engineered food as part of his "regulatory relief initiative." As Quayle explained in the 1992 press conference, the American biotechnology industry would reap huge profits "as long as we resist the spread of unnecessary regulations."

Dan Quayle's 1992 policy announcement is premised on the notion that genetically engineered crops are "substantially equivalent" to regular crops and thus do not need to be labeled or safety tested. The policy was crafted by Michael Taylor, a former Monsanto lawyer who was hired by the Bush FDA to fill the newly created position of deputy commissioner of policy.

Five years earlier, then-Vice President George H.W. Bush visited a Monsanto lab for a photo op with the developers of Roundup Ready crops. According to a video report of the meeting, when Monsanto executives worried about the approval process for their new crops, Bush laughed and told them, "Call me. We're in the dereg businesses. Maybe we can help."

 

Call they did. It's typical for corporations to get their policy agenda approved through back-channel lobbying and revolving door appointments and then point to the magical policy outcome as evidence of scientific decision-making.

6) "Consumers have broad food choices today, but could be denied these choices if Prop 37 prevails."

There is no basis in logic that consumers could be denied food choices. Indeed, Proposition 37 actually broadens the meaningful food choices available through greater transparency. Right now, people are eating in the dark.

7) "Interestingly, the main proponents of Proposition 37 are special interest groups and individuals opposed to food biotechnology who are not necessarily engaged in the production of our nation's food supply."

In fact, quite a large number of food producers, farmers and others very much "engaged in the production of our nation's food supply" support the campaign. (See the growing list of endorsements.) Speaking of "special interest groups" wouldn't that label apply to the likes of Monsanto and all the industrial food producers who oppose Proposition 37?

8) "Beneath their right to know slogan is a deceptive marketing campaign aimed at stigmatizing modern food production."

"Modern food production" -- is that Monsanto's latest euphemism for scientifically altering the genetic code of the food supply? In truth, nothing is hidden "beneath" the Right to Know campaign, that's all it's about. But because Monsanto has no good argument for why consumers don't have the right to know how their food is produced, it has to resort to distracting deceptions.

9) "[Proponents] opinions are in stark contrast with leading health associations."

Another look at the long list of Prop 37 endorsements reveal that Monsanto and friends are actually out of step with leading health associations, such as:

• American Public Health Association


• American Medical Students Association


• American Academy of Environmental Medicine


• Physicians for Social Responsibility, California chapters


• California Nurses Association

10) "The California proposal would serve the purposes of a few special interest groups at the expense of the majority of consumers."

 

Again, logic defies this talking point, especially since all polling indicates a "majority of consumers" want GMO food to be labeled. Indeed, the most recent California poll shows the proposition winning by a 3-to-1 margin. No wonder Monsanto has to resort to such nonsensical talking points.

Romney’s Lying Machine

by Robert Reich

Friday, August 24, 2012

 

I’ve been struck by the baldness of Romney’s repetitive lies about Obama — that Obama ended the work requirement under welfare, for example, or that Obama’s Affordable Care Act cuts $716 billion from Medicare benefits.

The mainstream media along with a half-dozen independent fact-checking organizations and sites have called Romney on these whoppers, but to no avail. He keeps making these assertions.

Every campaign is guilty of exaggerations, embellishments, distortions, and half-truths. But this is another thing altogether. I’ve been directly involved in seven presidential campaigns, and I don’t recall a presidential candidate lying with such audacity, over and over again. Why does he do it, and how can he get away with it?

The obvious answer is such lies are effective. Polls show voters are starting to believe them, especially in swing states where they’re being repeated constantly in media spots financed by Romney’s super PAC or ancillary PACs and so-called “social welfare” organizations (political fronts disguised as charities, such as Karl Rove and the Koch brothers have set up).

Romney’s lying machine is extraordinarily well financed. By August, according to Jane Mayer in her recent New Yorker article, at least 33 billionaires had each donated a quarter of a million dollars or more to groups aiming to defeat Obama – with most of it flooding into attack ads in swing states.

In early August, “Americans for Prosperity,” one of the nonprofit front groups masquerading as a charity, and founded in part by billionaire right-wingers Charles and David Koch, bought some $27 million in ad time on spots now airing in eleven swing states.

So Romney’s lying machine is working.

But what does all this tell us about the man who is running this lying machine? (Or if Romney’s not running it, what does it tell us about a man who would select the people who are?)

We knew he was a cypher — that he’ll say and do whatever is expedient, change positions like a chameleon, eschew any core principles.

Yet resorting to outright lies — and organizing a presidential campaign around a series of lies — reveals a whole new level of cynicism, a profound disdain for what remains of civility in public life, and a disrespect of the democratic process.

The question is whether someone who is willing to resort to such calculated lies, and build a campaign machine around them, can be worthy of the public’s trust with the most powerful office in the world.

 

 

Power to the People or Power to the Corporations?

by John Lawrence from the San Diego Free Press

In the quest for renewable sources of energy, a battle is looming that most people are not even aware of. We need to replace electric power generated by coal and gas fired plants with power generated by solar and wind to be sure, but who owns the means of such production is a vital and crucial issue. Let's take solar, for instance. There are two models basically to choose from. The first is the large solar installation in the desert owned and operated by the large power generating corporations like SEMPRA Energy. That's logical, you might say. There are acres and acres, square miles and square miles of desert real estate that is not much good for anything else. Why not build solar arrays there and truck the electrons so created via transmission lines to the urban areas where electricity is needed? The problem with this model is that transmission lines are inherently wasteful. Energy is lost for each mile the electricity has to flow to its destination just as water whose source is far away is evaporated and hence lost by canals as it traverses the route from source to destination.

A far better model is distributed generation. Why not site the solar arrays close to where the energy is to be consumed? That way there is little or no energy lost in transmission. Instead of putting solar panels in the Anza Borrego desert and trucking them to San Diego, a better solution is to put the solar panels on the rooftops of San Diego. Large warehouses are a pretty good place, but suburban homes are pretty good too. But this brings up another conumdrum. If I put solar panels on my house and feed the excess electricity so generated back into the grid, who makes the profit from this operation - myself or the energy corporation like SEMPRA parent of San Diego Gas and Electric? This is at the heart of solar energy policy in the US at this time. The energy companies are fighting battles to maintain control of energy generation. It's all right to have a distributed network so long as they own that network. What they are deadset against is distributed ownership. If I own the solar panels on my roof and sell excess energy back into the grid, not only does SEMPRA lose money from not being able to collect a monthly bill from me for energy consumed, but it loses money if it has to buy excess energy from me at market rates and redistribute it to others. In effect it is providing a service for free.

Germany solved this problem by incentivizing the average homeowner or entrepreneur to produce as much PV (photovoltaic) energy as possible by paying people to sell excess energy back onto the grid. At the heart of the debate is the Renewable Energy Sources Act. It requires power companies to buy all the alternative energy produced by these systems, at a fixed above-market price, for 20 years. The mechanism they used, known as a feed-in tariff, gives entrepreneurs and home owners a powerful incentive to install solar panels on their roof tops. They can earn a reliable return on their investment. Homeowners have rushed to clamp solar panels on their roofs and farmers planted them in fields where sheep once grazed. The amount of energy generated by this measure has skyrocketed making Germany one of the most solarized countries on the planet despite the fact that Germany has relatively few days of sunlight compared to the American southwest or the Iberian peninsula. In Germany the excess energy put back onto the grid must be bought by utility companies at above market rates and resold to other customers at those same rates. So actually the utility companies are losing money. Ahh, there's the rub. American energy companies will lobby their hearts out (corporations are people, remember) to not let that happen here. Whereas the average German can actually make money selling PV energy, in the good old USA only corporations will profit, that is if campaign contributions and lobbyists have anything to say about it.

By its very nature, since solar is decentralized, it is a threat to the energy companies both here and in Germany. Utilities would much rather build wind farms because most home owners cannot put a windmill on their roofs.

In San Diego there has been much ado about the Powerlink transmission line. According to the San Diego Smart Energy Solutions Campaign sponsored by the Sierra Club, Powerlink is SEMPRA Energy's dirty little secret. It has been sold as a way to bring renewable energy from the desert to San Diego. But that's not what it's really about at all. It Is about completing SEMPRA/SDG&E's "fossil fuel corridor," connecting dirty power plants on the Mexican border to markets in Los Angeles. It turns out that Sempra has a dirty electricity generating plant just over the border in Mexico where environmental standards are lower which burns Liquified Natural Gas (LNG). The electricity so generated will be sent north via Powerlink not necessarily to San Diego because Powerlink is the missing piece in a network connecting up with Los Angeles as well. LNG is imported from Russia and Indonesia to Mexico's Costa Azul terminal near Ensenada. From there the LNG is sent by SEMPRA pipelines to its Mexicali export terminal where it generates electricity which is then sent north to San Diego and LA. The energy is generated by fossil fuels, not renewables, and pollutes the border area. Furthermore, it dumps carbon dioxide into the atmosphere and contributes to global warming. And this whole set-up does nothing to lower rates for consumers. After all, Sempra is a profit making company not a consumer serving company.

An alternative energy plan, "San Diego Smart Energy 2020: The 21st Century Alternative," has been developed by professional engineer Bill Powers. It not only saves consumers money. It also reduces San Diego's greenhouse gas emissions by 4.5 million tons of carbon dioxide compared to SDG&E's plan. The Global Warming Solutions Act (AB32, September 2006) commits California to reduce greenhouse gases by 25 percent to 1990 levels by 2020, and by 80 percent by 2050. SEMPRA pulls a fast one on this by using imported LNG with power plants in Mexico which violates the spirit if not the letter of the law. The Smart Energy plan emphasizes distributed generation which requires much less electricity since none is lost in long transmission line hauls and PV panels which don't spew carbon dioxide into the atmosphere. Hence much efficiency is gained.

The Coalition for Reliable Power reports that rooftop solar systems are on the cutting edge of solar power overtaking the efforts of the large centralized power corporations such as SEMPRA. The big utility companies are losing their grip on power generation and are fighting back to protect their profits.

In some cases, utilities are actually taking direct steps to thwart rooftop solar. Two weeks ago in Colorado, the state's biggest utility, Xcel, tried passing a surcharge on homes and businesses using rooftop solar power. The public went ballistic, and with pressure from Democratic Gov. Bill Ritter, the proposal was eventually shelved. In early July, New Mexico's biggest utility, PNM, filed an official request to dramatically reduce incentives for businesses and homeowners to install solar panels, and is now fighting with state lawmakers over whether it has the right to exclusively own solar panels systems hooked up to its grid.

Charitable institutions are arising to put decentralized solar power in the hands of average home owners for a fraction of the cost of manufactured turnkey systems. This is a threat to the centralized profit making power generating corporations.

One additional thing to consider is the environmental impact of large centralized solar systems in the desert. According to Mother Jones:

The Mojave, where the sun shines more than 300 days a year, would seem like a perfect home for the solar hub—unless you happen to be a threatened desert tortoise, in which case you can kiss your burrow goodbye. Across the country, environmentalists are finding themselves in the awkward position of having to choose between clean energy and wildlife: In the Midwest, wind farms ensnare bats and migrating birds, and hydropower dams in the Northwest decimate salmon spawning grounds. "We've been supportive of efforts to accelerate clean-energy projects," says Jim Lyons, who studies renewable energy at the conservation nonprofit Defenders of Wildlife. "But the scale of these new projects is massive, and they could be enormously destructive to plants and animals." However, just off the desert are many big box stores and warehouses where solar panels could be placed. But the large utility corporations don't want to place them there because they'd lose money. According to Bill Powers, a solar energy expert in San Diego, "Utilities make money off power plants; they'd lose money if big-box stores started making their power on the roof."

Finally, Bill McKibben of 350.org, perhaps the leading expert on global warming, says in his book, Eaarth:

In one sense, though, constructing a large national green energy system is sort of like buying organic food at the supermarket; it's an improvement, in that the fields where it's grown aren't soaked in pesticides, but that produce is still traveling an enormous distance along vulnerable supply lines. And instead of building stronger local communities, the money you spend buying it just builds the bank accounts of a few huge firms. With food, people are starting to understand the virtues of going not just green but local - and the same thing might be happening with energy. For two decades some farmers have built CSAs, or community-supported agriculture operations, where members pay an annual fee for a share of the produce. Now advocates like Greg Pahl are talking about CSE, or community-supported energy, and pointing at examples like the wind power associations and cooperatives that have built thriving facilities across Germany, Denmark, Holland, Sweden and Canada. ... By the summer of 2009, in fact, the main force holding back distributed power - the microgrid - was the simple reluctance of the big utilities to surrender their monopolies. With their political sway, they were backing congressional bills that, in the words of business journalist Anya Kamenetz, would "subsidize constuction of multi-billion-dollar far-flung supersize solar and wind farms covering millions of acres, all connected via outside transmission lines." An array of research demonstrated that the faster, cheaper way to build renewables was to find a few rooftops on every block and put up panels, but the "utilities have been so adamant about thwarting these programs," says Jim Harvey, the founder of the Alliance for Responsible Energy. But don't take his word for it - ask the industry itself. Here's Ed Legge of the Edison Electric Institute, the chief lobbyists of the nation's utilities: "We're probably not going to be in favor of anything that shrinks our business. All investor-owned utilities are built on the central-generation model that Thomas Edison came up with. You have a big power plant.... Distributed generation is taking that out of the picture - it's local."

So there you have it. The model which the large corporations are fighting to preserve is one in which they continue to make high profits off of centralized power generation. The much ballyhooed SDG&E Powerlink will not only transport energy that was created by renewables, but will in fact be carrying over its transmission lines energy generated by Liquified Natural Gas imported from Russia and Indonesia. How much of which will be determined by corporate maximization of profits in accordance with state laws. The alternative is not government owned Soviet style power generation but distributed, decentralized power generation which would result in a dispersion of profit making over a large swath of the public, and result in less carbon dioxide being transmitted into the atmosphere. It would be better for the general public and better for the environment. Meanwhile, less than a month ago with officials from San Diego Gas and Electric standing by, Governor Jerry Brown dedicated the Powerlink Transmission Line.

 

 

 

Report: US Tax Dollars Funding Exhorbitant CEO Pay

Published on Thursday, August 16, 2012 by Common Dreams

"Our nation’s tax code has become a powerful enabler of bloated CEO pay."

- Common Dreams staff

While austerity hits everyday Americans, seemingly scarce tax dollars are being squeezed from their pockets to fund exorbitant CEO pay, according to a report released Thursday from the Institute for Policy Studies (IPS).

image: Institute for Policy Studies

According to the thinktank's 19th consecutive Executive Excess report, The CEO Hands in Uncle Sam's Pocket, "Our nation’s tax code has become a powerful enabler of bloated CEO pay."

For example, the report states that "26 U.S. corporations last year gave their CEO more than they paid in taxes to Uncle Sam." The CEOs at those corporations received a staggering $20.4 million in average total compensation -- a 23% increase above the previous year.

Among the CEOs detailed in IPS's report are these five who received more in compensation than their corporations paid in federal income tax:

Name of CEO	Corporation	2011 CEO Compensation	2011 Federal Income Tax Bottom Line for Corporation
Vikram Pandit	Citigroup	$14.9 million	$144 million refund
Miles D. White	Abbott Laboratories	$19.0 million	$586 million refund
Randall Stephenson	AT&T	$18.7 million	$420 million refund
James McNerney	Boeing	$18.4 million	$605 million refund
Robert Benmosche	American International Group	$13.9 million	$208 million refund
Aubrey McClendon	Chesapeake Energy	$17.9 million	$13 million payment

 

Corporations are also dodging taxes through the use of tax havens such as Cayman Islands and Bermuda through which "corporations can shift around profits, avoid accountability, and reduce tax obligations."  The report found 537 tax-haven subsidiaries operating last year from the 26 corporations paying more in CEO compensation than in federal income taxes.

In addition to gaming the system to allow excessive CEO compensation, tax loopholes and the Bush tax cuts are allowing these corporations to save millions. The report states that the Bush tax cuts allowed 57 CEOs to save more than $1 million on their personal income tax bills. And the top five 2011 beneficiaries of the loophole that allows no limit on how much “performance-based" compensation corporations can deduct from their taxes "had a combined $232 million in deductible 'performance-based' pay. Absent this loophole, the tax bills for these companies would have jumped $81 million, or an average of more than $16 million per CEO."  With the loophole, however, corporations are essentially incentivized to give CEOs high "performance-based" pay.

The chart from the report lists some of the CEOs making millions from the Bush tax cuts:

The four most direct tax subsidies for excessive executive pay is costing taxpayers $14.4 billion per year, the report states -- an amount that could be used to reinvigorate the public sector by providing services such as health care for 7,370,673 low-income children for one year, or VA medical care for 1,843,510 veterans for one year or 241,593 clean-energy jobs for one year.

Click here to read the full report (pdf).

Ryan’s Budget: Right in Your Face, America!

Published on Friday, August 17, 2012 by Common Dreams

by Ralph Nader

The cruel impoverishment of the debate among the presidential and congressional candidates took a gigantic leap into the pits with Mitt Romney’s selection of 42-year-old Rep. Paul Ryan from the deindustrialized town of Janesville, Wisconsin. Ryan is invariably described by reporters as “an intellectual leader of the conservative movement” and by fellow Republicans as a person “who tells the hard truths” to the American people.

(photo: Flickr user monkeyz_uncle)

The truth is that what has distinguished this fast-talking, glib, Ayn Rand-smitten, congenial young man is that he has a plan for the federal budget. On Capitol Hill that fact alone makes one a “stand-out” in the field of political narcissists whose mental tank harbors gaseous one-liners and kneejerk slogans.

The Ryan budget plan is a Koch brothers’ dream and the American peoples’ nightmare. It leads with a lie – namely to control deficit spending by continuing it for at least 30 more years before his concoction of big tax cuts for the rich, further increases in the already bloated defense budget, and savage cuts in public services for the people, somehow balance the budget around mid-century.

Ryan’s brain is chock-full of such cognitive dissonance that it would blow a normal person’s mind. He is a practicing Catholic, but since his youth has been a disciple of the militant atheist Ayn Rand who despised altruism and “love thy neighbor” values while edifying extreme selfishness and greed.

His plan for social security is social insecurity. Make people work longer before receiving curtailed benefits, invest trillions of dollars of these funds in the volatile stock market and make sure that rich people only have to pay social security taxes on a fraction of their earned income.

He would open the floodgates on future Medicare to the rapacious health insurance companies through a voucher system whereby the elderly are fed to these sharks with ever-higher co-pays. His “block grant plan alone would lead states to drop between 14 and 27 million people (the poor and those with disabilities) from Medicaid by 2021,” according to the Urban Institute.

As a 16-year-old youngster, Ryan and his family were helped by social security when his father passed away. So why now impose this draconian crunch on these three major programs? Ryan says that this is the only way to preserve social security, Medicare and Medicaid for future generations. Very well, Mr. Ryan, then why have you refused to civilly debate your proposals and their consequences with any of your critics inside and outside the Congress before a national television audience?

I requested that you have this important exchange in three letters (first,second,third). Finally, your office demurred on the grounds that you were too busy. Are you really too busy to debate your plan which has passed the Republican-controlled House of Representatives and has been generally endorsed by Mitt Romney? Or are you too fearful of trying to defend your numbers and their plutocratic values to the likes of Princeton professor and Nobel Laureate Paul Krugman, who has called the Ryan budget “the most fraudulent in American history”?

Cognitive dissonance proliferates. His hometown has been devastated by pull-down trade agreements yet he supports NAFTA and the World Trade Organization. He sees himself as a fiscal hawk while being an armchair warrior and military hawk (he wants to stay and win in Afghanistan). He offers “to restore the dreams and greatness of America” but opposes both public works projects to repair America and environmental health standards so Americans can breathe, drink, eat and work more safely.

He proposes deep cuts in widespread hunger alleviating food stamps. He opposes the minimum wage while he fights to eliminate or reduce taxes on capital gains and other taxes on the already undertaxed very-wealthy who have poured money into his and other Republicans’  campaign kitties.

He professes to be against crony capitalism, but he voted for the giant Wall Street bailouts and other bailouts and giveaways that define what real conservatives find so offensive.

An outraged David A. Stockman, President Reagan’s first director of the Office of Management and Budget, dismisses Ryan’s conservative credentials. He said that Calvin Coolidge, Herbert C. Hoover, Senator Robert A. Taft, Dwight D. Eisenhower, and even Gerald A. Ford  “would have had no use for the neoconservative imperialism…”

“In short,” wrote Stockman in The New York Times, “Mr. Ryan’s plan is devoid of credible math or hard policy choices…. Mr. Romney and Mr. Ryan have no plan to take on Wall Street, the Fed, the military-industrial complex, social insurance or the nation’s fiscal calamity and no plan to revive capitalist prosperity – just empty sermons.”

So Mr. Ryan is a closet corporatist who won’t even urge cracking down on the hundreds of billions of dollars that companies defraud the federal government every year, including documented fraud on Medicare, Medicaid and the Defense Department.

If the Democrats can’t use the Ryan budget as their ticket to victory this November in Congress and the White House, then they are truly the terminally decaying party of caution, cash and cowardliness.

In reality, the Ryan budget, thrown right in the face of the American people, is the ultimate test of what’s left of the Democrats besides their donkey.

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

Tales of High Finance

Published on Saturday, August 18, 2012 by Common Dreams

by Christopher Brauchli

[I]dealism in our time has been shoved aside, and we are paying the penalty for it.
— Alfred North Whitehead, Dialogues of Alfred North Whitehead, Prologue

It’s time for an update on activities occurring in the world of high finance. Several newsworthy events have occurred.

In June 2012 ING, a unit of ING Groep, one of the largest banks in the Netherlands, agreed to pay penalties of $619 million dollars for using the U.S. banking system to transfer billions of dollars for the benefit of Cuban and Iranian customers in violation of U.S. imposed sanctions. Eager not to be outdone by its competitor, Standard Chartered Bank agreed in early August to pay $340 million to the state of New York to settle allegations that for seven years ending in 2007 it helped Iran launder $250 billion. Although the amount laundered is substantial, the fine is not, when compared with the fine imposed on ING.

In February five major banks agreed to a $26 billion settlement of claims filed by 49 attorneys general and the District of Columbia as penance for the abuses perpetrated by them during the foreclosure crisis, one of the hallmarks of which was the notorious practice of robo-signing documents filed with the courts to obtain court orders approving foreclosures. The $26 billion comprised a $5 billion fine and the rest involved such things as reducing principal mortgage balances on one million underwater homes, simplifying foreclosure relief, cash payments to some people who lost their homes and assorted other provisions.

Inspired by the big banks, credit card companies have gone down the path pioneered by them. A story in the New York Times reports that in their zeal to collect what they would like to think they are owed in a perfect world, the credit card companies are relying on “erroneous documents, incomplete records and generic testimony from witnesses,” a term that suggests the witness’s testimony had more to do with establishing a debt than establishing the truth. A judge in Brooklyn who handles up to 100 credit card collections a day estimates that 90% of the credit card collection cases he hears are flawed but since the debtor makes no court appearance the judge has no choice but to rule in favor of the creditor. Since the investigation in this practice is ongoing, it is too early to say what, if any, fines and penalties may be imposed on the miscreants.

For creativity, none of the activities described above can hold a candle to a debt collection company with the singularly appropriate name of Accretive Health that has just agreed to pay $2.5 million for its amazingly creative debt collection activities. (The definition of “accretive” is “growth or increase in size by gradual addition.” In the case of Accretive the corporate emphasis is on “addition” rather than “gradual” and has nothing to do with health.)

Accretive specializes in collecting medical debt and is among the largest companies with that specialty. Among its clients are two hospitals in Minnesota along with some of the largest hospital systems in the country. In April 2012 the attorney general for Minnesota released documents that described Accretive’s collection practices. According to a report in the New York Times, Accretive’s employees can be found anywhere from the emergency room to the obstetrics department. Representatives of the collection company have told incoming patients that they cannot receive treatment without settling outstanding accounts or, in some cases, paying in advance for services they hope to receive. Patients who were contacted said they were surprised to learn that people in the emergency room they assumed were hospital employees were in fact collection agents.

In July the attorney general announced a settlement that, among other things barred Accretive from doing business in that Minnesota for two years. In announcing the settlement she described some of the tactics that were used by Accretive in order to convince patients that they should pay their medical debts. A mother was told she could not see her daughter who was being treated for a drug overdose until she had given the representative her credit card. A new mother was told she could not take her newborn baby home unless she produced a credit card and paid $800, a sum it turned out she did not owe. Having ransomed the child, it took her months to get her money back from Accretive. In announcing the settlement with Accretive that includes a fine of $2.5 million the Minnesota Attorney General said: “A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown.” Accretive may well be surprised by that harsh rhetoric. It has probably liked the symmetry of a collection agency being made whole at the same time a person in need of emergency care seeks to be made whole. It may well think a system that doesn’t appreciate such symmetry is flawed. Others may think Accretive is flawed. Readers may decide for themselves who’s right.

Christopher Brauchli is a columnist and lawyer known nationally for his work. He is a graduate of Harvard University and the University of Colorado School of Law where he served on the Board of Editors of the Rocky Mountain Law Review. He can be emailed at [email protected]. For political commentary see his web page at http://humanraceandothersports.com

Chemical Industry Spent Almost $10 Million Against GMO Labeling

by Aviva Shen

Think Progress / News Report

Published: Wednesday 15 August 2012

“Genetically engineered crops are designed to be resistant to toxic pesticides and herbicides patented by these companies.”

Californians will vote on Proposition 37, a requirement to label genetically engineered foods, a prospect the pesticide and processed food industries are not happy about. According to an analysis of campaign finance reports by Right To Know, an advocacy group promoting the ballot initiative, chemical and processed food companies recently contributed nearly $10 million to “No on 37,” which describes itself as “a coalition of family farmers, grocers, small businesses, and food producers” against food labeling.

Funding from pesticide and seed companies now tops $7 million, with the biggest contributions from Dupont Pioneer, Bayer Crop science and BASF Plant Science. Genetically engineered crops are designed to be resistant to toxic pesticides and herbicides patented by these companies. But the resistant seeds have spurred the growth of “super weeds,” which require even more herbicide. In 2008, GE crop acres required over 26 percent more pounds of herbicides per acre than acres planted to conventional varieties. It’s not just the weeds that are mutating — “super insects” are also starting to become a serious problem. Chemical companies profit enormously from this GE arms race, which gives farmers little choice but to buy bigger, more poisonous batches of pesticides and new strains of seeds engineered to withstand them.

Besides the chemical industry, companies including Coca-Cola, PepsiCo, Nestle USA, General Mills and ConAgra are pouring money into defeating the labeling requirement. If California passes the measure, these companies’ profits could suffer from a warning label driving consumers away. Proposition 37 could also take the GMO-labeling movement national, which has so far stalled in 20 states in spite of support from 91 percent of Americans. The Food and Drug Administration has said labels are unnecessary because GE foods have not been shown to be harmful. Many other countries, including Japan, Australia, China and the European Union, already require labels on GE food.

Whose Plan Destroys Medicare — Obama’s or Romney-Ryan’s?

by Robert Reich

Monday, August 13, 2012

Stumping in Florida today, Mitt Romney charged President Obama’s Affordable Care Act will “cut more than $700 billion” out of Medicare.

What Romney didn’t say was that his running-mate’s budget — approved by House Republicans and by Romney himself — would cut Medicare by the same amount.

The big difference, though, is the Affordable Care Act achieves these savings by reducing Medicare payments to drug companies, hospitals, and other providers rather than cutting payments to Medicare beneficiaries. A July 24, 2012 report from the non-partisan Congressional Budget Office confirms this.

The Romney-Ryan plan, by contrast, achieves its savings by turning Medicare into a voucher whose value doesn’t keep up with expected increases in healthcare costs — thereby shifting the burden onto Medicare beneficiaries, who will have to pay an average of $6,500 a year more for their Medicare insurance, according an  analysis of the Republican plan by the Congressional Budget Office.

Moreover, the Affordable Care Act uses its Medicare savings to help children and lower-income Americans afford health care, and to help seniors pay for prescription drugs by filling the so-called “donut hole” in Medicare Part D coverage.

The Romney-Ryan plan uses the savings to finance even bigger tax cuts for the very wealthy.

Spread the word. Don’t allow the GOP to get away with this demagoguery.

Paul Ryan’s Faux Populism

by Robert Reich

Friday, August 17, 2012

On Friday, Paul Ryan, the presumptive Republican vice-presidential nominee, made the most populist speech of this campaign season.

“It’s the people who are politically connected, it’s the people who have access to Washington that get the breaks,” he told an enthusiastic crowd of over 2,000 at a high school gym in Virginia.

“Well, no more. We don’t want to pick winners and losers in Washington… . Hardworking taxpayers should be treated fairly and it should be based on whether they’re good, whether they work hard and not who they know in Washington. That’s entrepreneurialism. That’s free enterprise.”

Sounds good, but earlier this week – three days after being picked as Romney’s running-mate – Ryan went to Las Vegas to pay homage to Sheldon Adelson, the casino billionaire who is the poster boy for using money to become “politically connected” in Washington, and getting the “breaks” that come with it. Adelson has promised to donate up to $100 million to make sure Romney and Ryan are in the White House next year.

Much of Adelson’s fortune comes from his casino in Macau, in China, via his money-greased access to Washington.

When China’s pitch for the 2008 Olympics was endangered by a House resolution opposing the bid because of China’s “abominable human rights record,” Adelson phoned Tom DeLay, then House majority whip and recipient of Adelson’s political generosity — urging him to block the resolution, which DeLay promptly did. The next day, according to the New York Times, a Chinese vice premier promised Mr. Adelson an endless line of gamblers to the Macau casino.

The money Adelson has committed to putting Romney and Ryan into the White House is a business investment. Adelson has a lot riding on the 2012 election.

Last year, his Las Vegas Sands Corporation came under investigation by the Justice Department and the Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act — bribing Chinese officials to help expand its casino in Macau.

The U.S. attorney’s office in Los Angeles, meanwhile, is investigating whether the Sands Corporation violated federal money-laundering laws by accepting more than $100 million from high-rolling gamblers accused of drug trafficking and embezzlement, rather than reporting the suspicious funds to the government.

Ryan has also been a major recipient of contributions from billionaire energy moguls Charles and David Koch. Koch Industries PAC has donated more than $100,000 to Ryan’s campaigns and his leadership PAC – more than any other corporate PAC, according to a NY Times analysis of campaign records.

You see, Koch industries spans a variety of oil and gas investments – whose value would be compromised if Congress and the White House got serious about climate change.

Small wonder Paul Ryan has emerged as one of Congress’s most outspoken skeptics of climate change. He has also repeatedly voted against energy efficiency standards, including a House vote to prohibit the EPA from regulating greenhouse gases.

Several months ago, when I debated Paul Ryan on ABC-TV’s “This Week,” he said we need to shrink the size of government because big corporations and wealthy individuals otherwise use government to their advantage.

“If the power and money are going to be here in Washington, that’s where the influence is going to go … that’s where the powerful are going to go to influence it,” he said.

It’s an odd argument coming from Ryan because his proposed budget doesn’t shrink government by cutting benefits and payments to big business and the rich. He increases military payments to defense contractors, for example, slashes Wall Street regulations, and gives giant tax benefits to the rich.

His budget shrinks government mainly by cutting benefits and payments to the poor and lower-income Americans. Over 60 percent of his spending cuts target programs for Americans in the bottom third of the income ladder.

Ryan is correct when he says “it’s the people who are politically connected, it’s the people who have access to Washington that get the breaks.”

But his faux populism obscures the main point. A much smaller government still dominated by money would continue to do the bidding of billionaires like casino mogul Sheldon Adelson, energy moguls like the Koch bothers, military contractors, and other high rollers now actively trying to put Ryan and Romney into the White House.

It just wouldn’t do anything for the rest of us.

Mitt’s 13% Tax

by Robert Reich

Friday, August 17, 2012

Mitt Romney says “every year I’ve paid at least 13 percent [of my income in taxes] and if you add in addition the amount that goes to charity, why the number gets well above 20 percent.”

This is supposed to be in defense of not releasing his tax returns.

Assume, for the sake of the argument, he’s telling the truth. Since when are charitable contributions added to income taxes when judging whether someone has paid his fair share?

More to the point, Romney admits to an income of over $20 million a year for the last several decades. Which makes his 13 percent — or even 20 percent — violate the principle of equal sacrifice that lies at the core of our notion of tax fairness.

Even Adam Smith, the 18th century guru of free-market conservatives, saw the wisdom of a graduated tax embodying the principle of equal sacrifice. “The rich should contribute to the public expense,” he wrote, “not only in proportion to their revenue, but something more in proportion.”

Equal sacrifice means that in paying taxes people ought to feel about the same degree of pain regardless of whether they’re wealthy or poor. Logically, this means someone earning $20 million a year should pay a much larger proportion of his income in taxes than someone earning $200,000, who in turn should pay a larger proportion than someone earning $50,000.

But Romney’s alleged 13 percent tax rate is lower than that of most middle class Americans who earn a tiny fraction of what he earns.

At a time when poverty is increasing, when public parks and public libraries are being closed and when public schools are shrinking their offerings and their hours, when the nation’s debt is immense, and when the 400 richest Americans have more wealth than the bottom 150 million of us put together — Romney’s 13 percent is shameful

 

How Mitt Romney Set Up Offshore Shell Corporations and Bank Accounts and Paid No Taxes

by John Lawrence from San Diego Free Press

Setting up an offshore corporation is not difficult, nor is it expensive. For $650. you can set up an offshore corporation in Belize or the Seychelles Islands or the Cayman Islands among many other places, and for a slight additional charge it can be linked to a bank account in a jurisdiction which is absolutely tax free and completely confidential, in other words a tax haven. Furthermore, the shell company can be in one offshore jurisdiction and the bank account in another making any transactions even more difficult to track. These corporations and bank accounts are guaranteed absolute confidentiality. No one can inquire and obtain any information about them including the US government. It's even against the law to inquire about these shell corporations in the Cayman Islands. You could get jail time! For this reason offshore companies and bank accounts are proliferating. As is well known, Mitt Romney and Bain Capital have partaken of these completely legal schemes to hide money and have it grow tax free. They've set up hundreds of these corporations and bank accounts. At $650. a pop, they are ridiculously cheap for the average multimillionaire. All you have to do is google "offshore company registration" and you will come up with thousands of companies who can assist you in this process. Setting up the offshore corporation can be done in 24 hours and the only documentation required is a scanned notarized passport and a utility bill all sent by email.

There is a Bermuda-based entity called Sankaty High Yield Asset Investors Ltd., which has been described in securities filings as "a Bermuda corporation wholly owned by W. Mitt Romney."  He set it up in 1997, then transferred it to his wife’s blind trust  before he was inaugurated as Massachusetts’ governor. The director and president of this entity is R. Bradford Malt, Romney’s personal lawyer. However, Romney could have gotten by without listing anyone he knew as director. Companies that help set up offshore corporations also provide - for an extra $600. or so - what are called "nominee services" They will provide you with a Board of Directors and shareholders as well if you choose. That way anyone who possibly might snoop would find out nothing about the actual owners and Board. A private side agreement guarantees that the person or corporation that set things up remains firmly in control.

Sankaty was part of a number of similarly named hedge funds run by Bain Capital. The offshore company was used in Bain's $1 billion takeover of Domino's Pizza more than a decade ago. Since Sankaty is based in Bermuda, a tax free jurisdiction, it would pay no income or capital gains taxes if Domino's were to be later sold at a profit. The use of offshore companies such as Sankaty is allowed under U.S. tax laws. They are typically set up as shell corporations by private equity and hedge funds to route investments from large foreign and institutional investors, such as large pension plans, into corporate takeovers. The investors gain U.S. tax advantages by passing their funds through the offshore "blocker" corporations, avoiding a high 35 percent tax since the IRS considers the earnings to be "unrelated business income." And Romney can fully exploit the "carried interest" loophole in the tax code so if worse comes to worse, he pays no more than 15%. If Romney's offshore corporation makes a profit in a tax free jurisdiction such as Bermuda, he pays no taxes, zero, zilch.

Romney failed to list Sankaty High Yield on several financial disclosures, even though such a closely held entity would not qualify as an “excepted investment fund”. He finally included it on his 2010 tax return, the one he released. That's the only reason we know about it. Even after examining that return, we have no idea what is in this company's secret bank account, but it could be valuable, meaning that it is possible Romney’s wealth is even greater than previous estimates. While the Romneys’ spokespeople insist that the couple has paid all the taxes required by law, investments in tax havens such as Bermuda raise many questions, because they are in jurisdictions where there are no taxes required and absolute confidentiality. Any offshore shell corporation is legally a person and has the right to set up, buy and sell other companies. They can also transfer assets from one company to another creating a labyrinthine maze of complex corporate entities which no government could hope to unravel. One corporation can own another and monies can be funneled between them so that any investigation by the US government to try and track monies for tax purposes becomes virtually impossible. The government would have to file suits with the governments in each different jurisdiction because that is the only possible way confidentiaity can be circumvented. The companies that set up the shell corporations and bank accounts aren't required by law to release any information even to the US government. A full 55 pages in Romney's 2010 return are devoted to reporting his transactions with foreign entities.  

The "nominee services" offered by these companies that set up offshore corporations and bank accounts make it possible to hide any involvement by the private equity fund actually in charge. Many Belize based corporations have elected to have "Desiree" as their director. It is possible for Desiree to be the company's sole director and also the company's sole shareholder at the same time. How she can possibly keep up with her duties as director and shareholder of thousands of corporations is beyond me. Another service that companies such as Worldwide Incorporation Services provide is what are known as "shelf companies." These are companies that have been set up years ago just waiting for someone to come along and claim them, someone who needs the gravitas of a corporation that has been around for years. You have your choice of many names to choose from such as Technologic or Advantacorp among many others.

Romney still has a financial interest in Bain Capital and still receives income from it—recently he revealed more than $2 million in new Bain income. The firm today has at least 138 offshore corporations organized in the Cayman Islands, and Romney himself has personal interests in at least 12 which are worth as much as $30 million.  All of these firms have absolute confidentiality agreements. No wonder he doesn't want to make his tax returns public. It would ruin everything he's so painstakingly set up. The Romney campaign insists he saves nothing on his taxes by using offshore shell corporations and tax havens, but there is no way to check this. And the real question is not whether he is cheating on taxes, but how much money is he saving by using legal tax loopholes that allow him to use shell corporations in tax free jurisdictions such as the Cayman Islands to conduct his business.

Although Romney made a fool of himself on his recent foreign policy swing through Great Britain and Israel with numerous gaffes, he has a much worse reputation in a country he purposefully left off his itinerary: Italy. That’s because Bain Capital under Romney as chief executive officer, made about $1 billion in a leveraged buyout 12 years ago while paying zero taxes to a country deeply in debt and badly in need of tax revenue. Bain had one of its shell companies based in Luxembourg buy a telephone directory company from the Italian government. Since the shell company controlled by Bain and Romney was in Luxembourg, a no tax jurisdiction, Romney made a fortune while burning Italian tax payers. But this was all perfectly legal. Romney himself earned as much as $60 million from the Italian directory sale of Seat Pagine Gialle SpA. The deal turned into one of the biggest windfalls of his career. Like most of Romney's deals, he became wealthy at the expense of someone else. No real wealth was ever created. It was just transferred from someone less sophisticated to Romney who exploited every loophole in international law.

According to Bloomberg.com:

“Mitt Romney and Bain played the role of successful financial speculators at the peril of the Italian government and the small stock-market investors who were burned by the sharp decline in Seat (PG) shares,” said Giovanni Pons, a journalist for la Repubblica and co-author of “L’Affare Telecom” (2002), which recounts details of the Bain deal. The use of offshore subsidiaries to avoid taxes has been standard practice for private equity firms such as Bain, as well as other big U.S. companies such as Google Inc., Facebook Inc. and Cisco Systems Inc.

Bain sold the company back to Telecom Italia in a deal which has been called "the beginning of the destruction of Italian industry" since Telecom Italia's share value eventually declined 90%. Telecom Italia then sold the yellow pages directory to another group of private equity firms. Bain moved the profits from the sale of Seat Pagine Gialle through a number of shell companies in Luxembourg with the result that the profits were repatriated to the US tax free. That is a trick that not even the large tech companies like Qualcomm and Microsoft are able to do. Those companies are begging the US for a tax holiday so they can repatriate billions in profits, which would normally be taxed at 25%, now sitting in foreign banks.

All in all, thousands of US corporations - not just Bain - have set up thousands of offshore shell companies linked to offshore bank accounts. There are thousands of offshore companies willing and able to assist them in this process requiring nothing more than a copy of a scanned notarized passport and a utility bill. The whole process can be done with one phone call and a couple of emails and can be completed in as little as 24 hours for a cost of around $600. The companies assure their customers of "absolute confidentiality" and apologize for asking for the notarized passport as required by international law. There are some countries, however, that do not require even that. The country with the lowest standards for setting up a shell corporation, even lower than Somalia, is ... guess who ... the United States!  Planet Money host Chana Joffe-Walt set up a Delaware corporation called Delawho? for a nominal fee. They only required the name of the director, the name of the corporation and the address where she wanted the documents to be sent. No notarized passport or nothing!

References: Planet Money How to Set Up an Offshore Company

                  Bloomberg.com Romney Persona Non Grata in Italy for Bain's Deal Skirting Taxes                

                  Vanity Fair Investigating Mitt Romney Offshore Accounts

British Bank in $340 Million Settlement for Money Laundering for Iran

By JESSICA SILVER-GREENBERG

Published: August 14, 2012 by the New York Times

Standard Chartered, the British bank, has agreed to pay New York’s top banking regulator $340 million to settle claims that it laundered hundreds of billions of dollars in tainted money for Iran and lied to regulators.

Shawn Thew/European Pressphoto Agency

Peter Sands, the chief executive of Standard Chartered, flew to New York to negotiate over the weekend with state regulators.

The agreement is a victory for Benjamin M. Lawsky and his 10-month old agency, the New York Department of Financial Services, which took on the bank alone in charging that it schemed for nearly a decade with Iran to hide from regulators 60,000 transactions worth $250 billion.

Some federal authorities worry the deal has the potential to undercut a sweeping settlement between the bank and federal regulators, including the Federal Reserve and the Treasury Department. They are also investigating Standard Chartered, a 150-year-old bank based in London with operations across the globe.

The $340 million deal is a huge amount for a single state regulator, and it falls near the middle of the collective settlements that the Justice Department and the Manhattan district attorney have reached with other global banks in recent years over money laundering charges, from $619 million with ING bank in June to $298 million with Barclays in 2010.

Standard Chartered has maintained that only $14 million of the $250 billion in transactions violated federal regulations. In a statement announcing the settlement, Mr. Lawsky said, “The parties have agreed that the conduct at issue involved transactions of at least $250 billion.”

The bank said in a regulatory filing Tuesday that “a formal agreement containing the detailed terms of the settlement is expected to be concluded shortly.” Standard Chartered “continues to engage constructively with the other relevant U.S. authorities. The timing of any resolution will be communicated in due course,” the filing said.

After frantic negotiations with Mr. Lawsky’s office, which threatened to revoke the bank’s state license at a hearing scheduled for Wednesday, Standard Chartered made a calculation to settle, in part, to resolve the public relations headache, according to people briefed on the matter.

The agreement ends a weeklong international drama that thrust the upstart regulator into the spotlight and pitted Mr. Lawsky against federal authorities who thought he was overstepping his bounds and British authorities who accused him of tarnishing the reputation of their banks.

The size of the settlement is puzzling to some federal officials, including the Justice Department, because there is still widespread disagreement about the extent of the bank’s wrongdoing, according to regulators briefed on the matter.

In the weeks leading up to Mr. Lawsky’s move against the bank, the Justice Department was on the brink of deciding not to pursue criminal charges, after concluding that virtually all of the transactions with Iran had complied with United States law, current and former authorities said.

Until 2008, federal law allowed foreign banks to transfer money for Iranian clients through their American subsidiaries to another foreign institution. Mr. Lawsky claimed the 60,000 transactions occurred from January 2001 through 2007, as United States authorities suspected Iranians of using their banks to finance terrorism and nuclear weapons development.

Standard Chartered maintains that “99.9 percent” of the transactions under scrutiny involved legitimate Iranian banks and corporations and that none of the payments had anything to do with supporting terrorist activities. Because the bank did not properly report the transactions that had been routed through its New York branch, Mr. Lawsky’s office has said it was impossible to know how the money was used by the Iranians.

Mr. Lawsky based his case, in large part, on claims that the bank had violated state law by masking the identities of its Iranian clients, lying to regulators and thwarting American efforts to detect money laundering.

Particularly difficult for the bank, people with knowledge of the settlement talks said, was a trove of e-mails and memos detailing an elaborate strategy devised by the bank’s executives. An e-mail from a lawyer to bank executives in 2001 said that payment instructions for Iranian clients “should not identify the client or the purpose of the payment,” according Mr. Lawsky’s order.

One Iranian client was told to use “NO NAME GIVEN” in paperwork to transfer money, to escape scrutiny and “not appear to N.Y. to have come from an Iranian bank,” according to a 2003 e-mail from a bank official cited in the order.

In 2006, according to the order, the bank’s chief executive for the Americas wrote his bosses in London that the transactions with Iran had “the potential to cause very serious or even catastrophic reputational damage to the group.”

While violating the spirit of the law, the stripping of data that identified Iranian clients was not typically illegal until 2008 because foreign banks didn’t have to provide much information to their American units as long as they had thoroughly scoured the transactions for suspicious activity.

For Standard Chartered, the settlement signals a strategic shift. Last week, it said it “strongly rejects the position and portrayal of facts” by the agency.

The settlement is far more than the $5 million that the bank had been willing to pay to settle the case earlier this year, people with knowledge of the case said.

Even so, “it’s a small number to pay for the privilege of continuing to do billions of dollars of business through its New York branch,” said Sarah Jane Hughes, a banking law professor at the Indiana University Maurer School of Law.

Gov. Andrew M. Cuomo of New York lauded the Department of Financial Services, which was formed last year through a merger of existing banking and insurance departments. He said in a statement that the “result demonstrates the effectiveness and leadership” of the agency “and I commend the state Legislature for creating a modern regulator for today’s financial marketplace.”

The $340 million will go entirely to Mr. Lawsky’s department and then into the state government’s general fund.

Over the weekend, Standard Chartered worked closely with Mr. Lawsky’s office to hash out some kind of agreement, with the bank’s chief executive, Peter Sands, flying to New York from London early this week.

Mr. Lawsky has been unapologetic in his approach to the bank, even while weathering some criticism for going on the offensive against the bank on his own rather than moving in concert with other regulators.

The bank said that in 2010 it voluntarily turned over to several United States regulators a battery of e-mails and other internal bank documents detailing its dealings with Iran. But Mr. Lawsky felt he couldn’t wait any longer for federal regulators after an examination by his office revealed persistent failures in its compliance with bank secrecy and money-laundering laws, according to people with knowledge of the review.

As part of the settlement, the bank will install a monitor for at least two years to vet the bank’s money-laundering controls and put in permanent officials who will audit the bank’s internal procedures.

Emerson Meets Wall Street: Systems Think, the Citizen Dividend, and Economic Democracy

by D.R. Thompson

from The Potomac, Winter 2009

RECENT ECONOMIC TURMOIL BEGS the question of whether or not we've created, with globalization, a monster without limits – as Joe Biden would say 'Wall Street Gone Wild'. It seems a lot of intelligence combined with a great deal of greed has created an interesting financial box for the world to work itself out of. At work is an economic syndrome that cannot be looked at in black and white terms and is thus outside of the realm of most politician's tendency toward a mythic, good-guy/bad-guy outlook. Over the past 25 years, certainly since Reagan's term in office, we have been intent on dumbing down our politicians and our population just during the historic period when we most need them to be able to think. Yet, there is still hope, because enlightened thinking is no longer a luxury, but a requirement of survival as the world of high finance is being stripped bare of any vestige of credibility.  

What I'll explore here are three areas that could lead us toward a more humane and enlightened economics. These include the power of systems thinking, the benefits of a citizen's dividend and/or basic income guarantee for all people, and the general concept of Economic Democracy. A quick google on any of these terms can provide a good basic education, as well of a sense of the individuals promoting these ideas, should after reading this essay you find the concepts intriguing.   

At the root of the current conundrum we face is our economic crisis. However, it is my feeling, and I believe many Obama supporters would agree with me, that the issues outside of our economy are of equal importance. These would include, listing the most pressing: energy, the environment, poverty, debt addiction, and the failings of health care, and education to name a few. And that is just within the United States. My sense is that to address the fundamental economic issues outside of the others would be a mistake, and that we indeed have a unique opportunity with this election to start on a path of sustainable economic growth that in fact enhances the environment, empowers individuals, creates 'green' prosperity, enlarges the educational opportunities for our young people, and enables us to address the problems of health care. But 'how' do you ask can we do all of this at once?   

A rigorous approach to systems thinking would eliminate what seem intuitively to be bad choices from our policy making process.

First, we need to think systemically. There has in fact developed an incredible discipline in recent years surrounding systems thinking and, for lack of a better term, systems architecture, which can be applied to just about any set of human problems. One area where systems thinking and architecture has been aggressively applied to a very complex issue relates to aviation. The result of that architectural effort has been the Federal government-led NextGen initiative that is 25 years in scope and deals with very complex modeling of relationships between private-public sector relationships, technology, the physical air space, and a myriad of other factors. This complex, interrelated and interdependent modeling effort has then resulted in a series of concrete changes and proposals for how aviation, air traffic control and the relationship between regulation and free markets can work most effectively. Run through the Joint Planning and Development Office (JPDO), this cross-agency effort can and should be replicated for the economy. What we need, in other words, is a Joint Economic Policy Office that coordinates economic policy between agencies, including Health and Human Services, Education, Environment, Housing, Labor and so on.   

Such a cross-agency systems approach can and should be accomplished with our economic sphere in such a way to confront the myriad of problems we have confronting us. So, for example, we should not "knee jerk", respond in a linear fashion to our energy problems by freeing up all of the drilling off shore. To do so is not thinking systemically, as it is painfully obvious that fossil fuels are not the primary energy of the future, i.e., are not a viable sustainable energy solution. So why pursue that path if it is so obviously not a long-term option? A rigorous approach to systems thinking would eliminate what seem intuitively to be bad choices from our policy making process.   

But doesn't this smack of central planning? It won't be as long as the primary goal is to develop policy, and policy by its nature is not intended to dictate, but to influence change.   

Ultimately I believe systems thinking as related to the economy can lead us to an enlightened economics that frees us from our current plight of perpetual war, perpetual debt and perpetual prescriptions by seeing that solutions to war, economy, debt and ultimately even human and environmental health are inter-related.   

Debt-addiction, over the long term, is unsustainable as it ultimately leads to a society of debt-slaves, even if this was not the intended result. In the end we wind up with a society which is literally unable to function outside of debt ...

As a first step, I believe that systems analysis must be applied to our current method of debt-financing the gap between what we can produce and what we can consume. I for one am convinced that what could result from such an analysis is some kind of minimum guaranteed income program that rewards the overall productivity of our society and world rather than 'punishes' us through interest. This idea should be put through the rigors of systems analysis, along with many others such as social investment programs and public-private banking, all part and parcel of what the next wave of progressive policy that many call 'Economic Democracy', some of which is already showing up in legislation backed by the Bush administration and Henry Paulson, as he pushes to solve the finance mess through social investment in private sector banking. Bush himself even coined the term 'democratic capitalism' when referring to the agenda of the upcoming Bretton Woods-like economic summit (Bretton Woods being the financial confab in 1944 that defined the post WWII financial environment) – a series of meetings that will bring together world leaders in late 2008 (including President-Elect Obama) in an attempt to further shore up a new approach to the economic crises.   

The idea of a citizen dividend and/or basic income guarantee (aka, BIG) within the context of economic democracy assumes that all people have equal worth and that all individuals, simply by being born into the planet, should be able to live without, for lack of a better term, having to pay for the right to do so. Thus all eligible individuals should receive a BIG and/or dividend that would, over time, empower what is currently a perpetually indebted underclass. Debt-addiction, over the long term, is unsustainable as it ultimately leads to a society of debt-slaves, even if this was not the intended result. In the end we wind up with a society which is literally unable to function outside of debt and where everyone is caught in its web, even, strangely, many of the wealthy themselves. What needs to be questioned, therefore, is the validity of our current form of finance capitalism, and whether or not this is the only viable model at our disposal. If we decide on a different path, it is completely within our power to re-organize the debt relationships, our banking systems, our methods of valuing labor, our ideas related to 'productive' and 'non-productive' endeavors in order to shift from debt-addiction to citizen ownership and economic empowerment. All of this could be done equitably, with currently wealthy individuals being compensated for any losses and in many ways benefiting enormously by increased consumer spending.    

To be sure, inflation can show up in economic bubbles (i.e., stock or real estate), as we have just experienced – but a systems approach could model what those potential bubbles are and address potential problems with sound policy.

How do we afford this? First, revenues currently tagged for Social Security and unemployment would be moved to an overall BIG fund. Second, income tax for most individuals and families could be removed and replaced by other revenue sources, including an intelligent licensing and fee system for corporations (many use fees essentially allow corporations to pay nominal fees for access to publicly-owned resources), coupled with a consumption tax and/or corporate assets tax that would allow the government to intelligently influence consumerism and/or invest in industries that provide a green-friendly and sustainable future. Moreover, above a certain level, individuals and families could still pay a progressive income tax (for example, families making over $250K a year). The fact of the matter is that a large swath of low-income persons already pays no income tax at all.   

In addition to the revenue sources already mentioned, a citizen dividend could also be funded through government ownership of large percentages of the financial system (currently part of the Bush/ Paulson financial plan!), essentially channeling those profits across a broader level of society -- profits that had heretofore been limited to a minute percentage of the population.   

Finally, we can work on an international level to create a regime of debt forgiveness for all nations, including industrialized nations such as the United States, in order to free future generations from the shackles of unsustainable levels of debt.   

Wouldn't this all be inflationary? Well, if George Bush's policies have done anything they have proven the resiliency to the modern, productive economy to inflation; Bush has, in fact, increased federal spending more than all previous president's combined, with relatively minor impact on inflation. To be sure, inflation can show up in economic bubbles (i.e., stock or real estate), as we have just experienced – but a systems approach could model what those potential bubbles are and address potential problems with sound policy. The same level of analysis could be brought to bear on the international impact of such policies. But if we taxed intelligently, and channeled our resources from a war economy to a green and virtual one (i.e., the next level of the Internet), we could very well find ourselves with increased wealth, reduced deficits, massively reduced poverty and homelessness, and a much happier population that should able to avoid to a great extent the downside of inflationary bubbles.   

To date, all efforts toward guaranteed income, including Social Security and minimum wage, have been beneficial for the overall health of the economy, and Social Security has helped millions of retirees be more self reliant.

Would such a scheme actually cause more wealth? The recent economic stimulus package (2008) showed us an example: while GDP shot up by at least a couple of percentage points due to the stimulus totaling perhaps 'a mere' US $100 billion in Q2 2008, massive injections of liquidity by the Fed into the banks totaling hundreds of billions (through loans) during the same period did not serve to un-freeze the credit crisis because the banks did not loan the money but instead hoarded cash, and we were in recession by Q3. In short, people spend money out of necessity while institutions, if lacking direction, will tend to hoard cash out of fear. This behavior is a microcosm of what a larger move toward economic democracy could portend if we unleashed the power of a citizen dividend.   

But do we 'deserve' a basic income and/or dividend? According to Robert Reich in his recent book Supercapitalism:   

"… American is far more productive than it was 20 or 30 years ago, but most people haven't shared much in the bounty. Had median household income continued to grow at the same rate productivity grew over the last thirty years, the typical household would have earned $20,000 more in 2006 than it actually did."   

Given these statistics, a $10,000 or even $20,000 a year citizen dividend begins to make sense.   

At first, one might cringe that the idea of a citizen dividend and/or BIG is too socialistic and makes the people much too dependent on what is essentially a universal government handout. But in a technological age, when the romanticized, agrarian-based self-reliance of some of our country's founding philosophers such as Thomas Jefferson and Henry David Thoreau is an ideal that can never be realized, a universal, no strings, guaranteed income could in fact create a kind of stable post modern economic infrastructure that would actually enable self reliance to flourish. To date, all efforts toward guaranteed income, including Social Security and minimum wage, have been beneficial for the overall health of the economy, and Social Security has helped millions of retirees be more self reliant. Why shouldn't a citizen dividend/BIG have the same kind of effect? By the way, early in the last century conservatives fought long and hard against both Social Security and minimum wage, and certainly have been proven wrong on both fronts.   

Economic Democracy is simply an extension of the legacy of Emerson, Thoreau, Gandhi, Martin Luther King Jr. and others into the realm of economics ...

One of America's most influential (and underrated ) philosophers, Ralph Waldo Emerson (the founder of the American Transcendentalism), would in fact be quite happy with a movement toward a citizen dividend, basic income guarantees and Economic Democracy, even though at first this might not seem intuitively evident. I mention Emerson because he is so important and fundamental driver of many modern progressives, including (in the United States) Martin Luther King Jr. and thus Barack Obama. Emerson, along with David Thoreau, literally forged the unique idea of American individualism and self reliance, the use of non-violence as a tool for change, and the need for education to be student-centered. And this student-centered approach to education is one of the primary reasons why American society is so much looked to for creativity and innovation. It is largely because Emerson and his colleagues stressed the right and need for individual awakening and the nurturing of the individual creative spirit that the American society is so innovative and flexible. And it is because of the creativity and flexibility that we have fostered Universities that are, to this day, the best in the world and, one could argue, the direct result of the educational influences of the Boston intellectuals such as Dickenson, Alcott (both Bronson and his daughter Louisa May), and Channing that were the contemporaries of Emerson's.   

Economic Democracy is simply an extension of the legacy of Emerson, Thoreau, Gandhi, Martin Luther King Jr. and others into the realm of economics (Gandhi, King and Thomas Paine in fact supported a guaranteed minimum income!), allowing us to create a bedrock of economic freedom and stability, enabling people to pursue a variety of individual goals outside of those that are 'productive' in the eyes of those that control capital. By creating an guaranteed national citizen dividend, quite contrary to creating a citizenry content to 'live off the dole' people would instead turn to a myriad of business, creative and personal pursuits that will in turn generate massive economic growth in areas that are fostered by the desires of individuals for personal fulfillment, a movement toward green economics and virtual economics, and away from the shallow, consumerist, controlling and profiteering agendas of a the capitalist elite. While a majority of people would use the dividend as a supplement to a larger income (thus the idea of 'living off the dole' is a myth), many would also pool their resources and begin, for example, communities dedicated to local and individual improvement, philosophy and the arts, alternative universities and media (all via a new level of the Internet, AKA Internet II), and a plethora of other enterprises as yet unknown that could be steered, with enlightened leadership, toward a sustainable future. Even if a section of the population chose simply to live off of their guaranteed income, those people would by design need to choose a simple, more environmentally friendly lifestyle – maybe not such a bad thing in our current age. Moreover, less people in the labor pool could force more innovation through more production software (empowered by Internet II) and other advances in technology such as robotics.   

In short, many biases against so called 'socialist' ideas are cultural, and are the result of an implicit, long-term propaganda effort that allows the purveyors of the economic status quo to control the range of and access to ideas via the media.

Again, this is not socialism in the Soviet style. Why? First, and foremost, while any dividend or BIG would be guaranteed, the government would not directly influence how it was spent. This makes it, in this sense, a market stimulus that would drive market demand. It is only because the American population has been force fed by the current, corporate-owned media to fear of anything hinting at the socialized, and that most truly progressive economic ideas are completely locked out of the debate within the mass media, and as a result that people are clueless as to range of options in front of them. With the Internet, and its democratization of ideas, many people have been supplementing their corporate media experience with Internet searches that broaden their perspective and allow them to see that there are indeed alternatives to the current system of finance capitalism that is patently unsustainable even in the eyes of a ten year old. Even some of the pundits of the corporate mass media are getting that point, whether that is Lou Dobbs or Glen Beck of CNN or those within Fox News and MSNBC. And while Glen Beck and Fox News would not necessarily support the ideas of Economic Democracy, they should certainly respect the choice of the people to head in that direction.   

In short, many biases against so called 'socialist' ideas are cultural, and are the result of an implicit, long-term propaganda effort that allows the purveyors of the economic status quo to control the range of and access to ideas via the media. Rather than trap people in the false promises of credit-laced prosperity which creates an incredible reliance on the financial services sector, becomes demeaning to people over time, and creates an ever-growing reality of income inequality, why not provide basically a no-strings applied grant or dividend that, coupled with an intelligent morphing of bankruptcy laws into debt forgiveness programs – including debt forgiveness on the national level – becomes a de facto investment in people that will mitigate income disparities and, ironically, as described, create a better opportunity for overall prosperity than we currently have. We can look to the third world to micro-lending and grants as examples as to what people can do if given even a modicum of support and incentive. Moreover, it is precisely this investment in people and their potential that Emerson and Thoreau would support, because it is the power of the individual that they sought to unleash. Certainly Emerson would cringe if he were to learn that we launch our best, young, university-trained minds into the workforce and their post-educational life not with a sense of hope and opportunity, but often saddled with huge educational debt, sometimes mounting to hundreds of thousands of dollars!   

We should move forward with these ideas now, and create an economic future for ourselves and our children that is worth living. I for one am sick of watching the DOW move up and down 500 points on a regular basis like some annoying child trying to constantly get my attention. It's time to wake up and smell the credit card offer for what it was and, as adults, introduce some much-needed maturity into the playground.

The ideas of Economic Democracy will not eliminate individualism, self reliance and capitalism. Rather, they will enhance individual potential and democratize capitalism much as the Internet is and will continue to democratize media and is itself an experiment in the power of individualism. And the result will be for the benefit of the many over the long term.   

It is time we "reset" the world economy and shape a new model of market-based, hybrid public-private social capitalism, and do it quickly for the sake of our long term survival.   

Martin Luther King Jr. spoke of this kind of hybrid or balanced economy:   

"Communism forgets that life is individual. Capitalism forgets that life is social, and the Kingdom of Brotherhood is found neither in the thesis of Communism nor the antithesis of Capitalism but in a higher synthesis. It is found in a higher synthesis that combines the truths of both".   

And it is a stable synthesis of the social and the individual economic requirements that we should focus on moving forward, for our emphasis on the short term, while seeming to be quite the joy ride to some, has left the rest of us holding the proverbial bag. We might look back to Martin Luther King Jr., and forward to Barack Obama and Congressional progressives, for those ideas.   

In 2006, the basic income guarantee was in fact proposed on the national level by State Representative Bob Filner (D-CA) as H.R. 5257, supported by author Matthew Rothschild. Moreover, economists such as John Kenneth Galbraith and even Milton Friedman have supported the idea of BIG.   

We should move forward with these ideas now, and create an economic future for ourselves and our children that is worth living. I for one am sick of watching the DOW move up and down 500 points on a regular basis like some annoying child trying to constantly get my attention. It's time to wake up and smell the credit card offer for what it was and, as adults, introduce some much-needed maturity into the playground.  

  For further reading you can Google: Economic Democracy, Citizen Dividend, Basic Income Guarantee (BIG), Systems Thinking

Romney Veep Pick Announced: Paul Ryan

Published on Saturday, August 11, 2012 by Common Dreams

- Common Dreams staff

Republican presidential candidate Mitt Romney has picked Congressman Paul Ryan as his vice presidential running mate, the Romney campaign confirmed Saturday.

Republican U.S. Presidential candidate Mitt Romney (L) introduces U.S. Congressman Paul Ryan (R-WI) as his vice-presidential running mate during a campaign event at the retired battleship USS Wisconsin in Norfolk, Virginia, August 11, 2012. Photo: Reuters/Jason

Reed Romney made his announcement to supporters via a phone app. "Mitt's Choice for VP is Paul Ryan," it read. Minutes later, the campaign sent out a press release to confirm, calling Romney and Ryan “America’s comeback team.”

Paul Ryan, the 42-year-old Wisconsin representative and chair of the U.S. House of Representatives Budget Committee, is known for his budget plan that would double down on tax cuts for the wealthy while instituting massive cuts to government programs such as social security, medicare, medicaid, food stamps, student loans and other social programs. Along with Ryan comes his budget, a proposed $5.3 trillion cut to social services across the country over a decade.

On Paul Ryan, John Nichols writes today:

Ryan's an ardent social conservative, arguably to the right of Romney on issues such as gay rights and a woman's right to choose -- making him more acceptable than prospects like former Secretary of State Condoleezza Rice. He's never met a war or a military budget that he didn't like, and he's more than willing to mouth extreme talking points about "foreign" threats -- which distinguishes him from the likes of former Ambassador Jon Huntsman and New Jersey Governor Chris Christie. And, of course, Ryan is ever at the ready to promote the fiscal fantasies favored by the hedge fund managers, big bankers and insurance industry interests that fund the vast right-wing infrastructure.

Ryan, a Tea Party favorite and Washington insider has been a member of the House for 13 years and a Capitol Hill staffer before that.

Romney officially announced Ryan as his running mate at the retired battleship USS Wisconsin in Norfolk, Virginia, around 9:30 a.m. EDT (1300 GMT) Saturday.

While announcing Ryan at the event, Romney mistakenly introduced him as the next "President of the United States". 

"Path to Prosperity?" For Many Senior Citizens, VP Pick Ryan's Plan Would Be Path to the Poorhouse

Published on Saturday, August 11, 2012 by The Huffington Post

by Wendell Potter

If Americans who are embracing Rep. Paul Ryan's "Path to Prosperity" -- and that now includes Mitt Romney -- spent a few minutes reviewing a few recent research reports, they just might conclude that the Wisconsin Republican's plan to reduce the deficit might better be renamed the "Path to the Poorhouse" because of what it would mean to the Medicare program and many senior citizens.

Ryan's proposal, which will get new scrutiny now that Romney has made him his running mate, would end the current Medicare program for everyone born after 1956. It would replace Medicare with a system in which beneficiaries would receive a set amount of money from the government every year to buy coverage from private insurers. That money would go straight into insurance companies' bank accounts, which would make them far richer and even more in control of our health care system than they already are.

While the amount of money beneficiaries would receive would depend on their health status, the average 65-year-old would get $8,000 under the Ryan plan in 2022, the year it would take effect. That's the amount the current Medicare program is expected to spend on the average 65-year-old that year. After 2022, the annual increase in the "premium support" payments would be based on the consumer price index (CPI). And therein lies one of the biggest problems for anyone hoping to live long enough to enroll in Medicare and stay alive for a few years.

Last month the government reported that the consumer price index had increased 1.7 percent between June 2011 and June 2012, meaning we've been paying on average 1.7 percent more this year than last year for goods and services. The cost of medical care, however, shot up 4.3 percent -- more than two and a half times the CPI. And that was not an aberration. The cost of medical care has been rising faster than the cost of just about everything else in this country for years. That's one of the reasons why private health insurance premiums have been increasing so rapidly. That and the fact that insurance corporations have to report a big enough profit every quarter to satisfy their shareholders and Wall Street analysts.

Health insurance premiums rose nine percent in 2011 to an average of $15,073 for an employer-subsidized family plan, according to the Kaiser Family Foundation. Over the past 10 years, premiums have increased a "whopping" (Kaiser's word) 113 percent, much faster than wage increases and general inflation. So you can see what almost certainly would happen to Medicare beneficiaries beginning in 2022: They would have to shell out more and more money out of their own pockets every year just to cover the premiums their private insurers would charge them.

That's bad enough, but consider this: Health insurers began implementing a strategy several years ago to move all of us into high-deductible plans, meaning every one of us will soon be paying (if we're not already) thousands of dollars of our own money for medical care before our insurance company will pay a dime. Insurers adopted this strategy because they have failed miserably at controlling health care costs. If you can't control those costs, the only way you can make Wall Street-pleasing profits if you're an insurer is to keep hiking premiums and shifting more of the cost of care to policyholders.

Under the privatized Medicare program Ryan envisions, the effect of that cost-shifting strategy would be disastrous for the growing number of senior citizens who are finding that every year they have less and less money to make ends meet.

Almost half of Americans now die with virtually no financial assets, according to a recent study by economics professors at Harvard, MIT and Dartmouth. They found that 46.1 percent of Americans are now dying with less than $10,000 (19 percent die with no financial assets at all) and that many rely almost entirely on Social Security benefits for support. Not surprisingly, those people are disproportionally in poor health.

"With such low asset levels, they would have little capacity to pay for unanticipated needs such as health expenses or other financial shocks or to pay for entertainment, travel, or other activities," the professors wrote.

Those findings are not so surprising when you look at other recent measures of Americans' wealth and our ability -- actually, our inability -- to save money. The Federal Reserve reported in June that, after adjusting for inflation, median family income fell to $45,800 in 2010 from $49,600 in 2007. The recent economic crisis also took a big toll on median home equity, which fell during the same period from $110,000 to $75,000, and family net worth, which plummeted 40 percent from $126,400 to $77,300.

For the relatively wealthy Americans lucky enough to have a 401(k), most of their account balances are not nearly high enough to be of significant help when they retire. According to Fidelity Investments, the country's largest 401(k) administrator, the average account balance among its customers at the end of June was $72,800, which is down 2.4 percent from March and about the same as it was in June 2011. And balances in Health Savings Accounts are also low -- averaging just $1,494 in 2010, according to J.P. Morgan.

So one has to wonder how Messrs Ryan and Romney think making our senior citizens pay a lot more for care under a privatized Medicare program could even remotely be a Path to Prosperity for most of us. Could it be that they're not thinking -- or even caring -- about most of us but about people who, like them, have such big 401(k) accounts they'll be able to do just fine in their golden years regardless of how Medicare is structured?

© 2012 The Huffington Post

Wendell Potter is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate as a whistleblower. He is now the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

Group Exposes Practice of Adding Synthetic Preservatives to 'Organic' Baby Formula

Published on Thursday, August 9, 2012 by Common Dreams

Cornucopia Institute files legal complaint against manufacturers

- Common Dreams staff

A non-profit consumer advocacy and research organization has filed a formal legal complaint with the US Department of Agriculture (USDA) against several infant formula manufacturers it says are adding synthetic preservatives to certified organic infant formula.

Group says this is just latest example of manufacturers betraying the "organic" requirements for instant baby formula. The Organic Foods Production Act, passed by Congress in 1990, explicitly bans synthetic preservatives in organic food., but the Wisonsin-based Cornucopia Institute claims that a variety of producers have added more than a dozen unapproved synthetic ingredients to organic infant formula over the past five years.

“This is another blatant violation of the federal law governing organics by multi-billion dollar corporations that apparently think they can get away with anything,” says Charlotte Vallaeys, Director of Farm and Food Policy at The Cornucopia Institute.

The preservatives are beta carotene and ascorbyl palmitate, synthetics that are added to infant formula to prevent the oxidation and rancidity of ingredients such as the controversial patented supplements DHA and ARA, manufactured by Martek Biosciences Corporation (Royal DSM) and marketed as Life'sDHA®.

When formula with Life'sDHA® first came on the market, the FDA received numerous adverse reaction reports from parents and healthcare providers who noted serious gastrointestinal symptoms in babies who had previously tolerated formula without the Martek DHA and ARA oils.

“This is not the first time that the pharmaceutical companies and agribusinesses, that manufacture infant formula, have quietly added to organic formula the same synthetic ingredients that they use in their conventional versions without first seeking the legally required approval for use in organics,” says Vallaeys.

In its complaint, Cornucopia also asked the USDA to investigate the formula manufacturers’ organic certifying agent, Quality Assurance International (QAI). QAI is one of the largest organic certifying agents, and has come under fire in the past for certifying organic livestock operations that failed to meet the organic standards for animal welfare and outdoor access. QAI has also allowed its clients to add a number of other allegedly illegal synthetic ingredients to organic food and livestock feed.

“Consumers should be able to trust that the organic label represents foods that are free from unnecessary synthetic ingredients, and they rely on third-party certification by USDA-accredited certifying agents,” said co-director of the institute Mark Kastel.

Cornucopianamed the following brands of organic infant formula in its complaint to the USDA: Earth’s Best, Similac Organic, Vermont Organics, Bright Beginnings and Parent’s Choice (sold by Walmart).

Similac Organic is produced by Abbott Laboratories, a $30 billion pharmaceutical corporation. The other brands are produced by PBM Nutritionals, owned by Perrigo, a $2 billion dollar pharmaceutical corporation.

The only commercially available baby formula available in US stores that does not contain these synthetic preservatives is Baby’s Only Organic, manufactured by Nature’s One. Baby’s Only Organic is certified organic by OneCert.

*  *  *

Cornucopia's baby formula Buyer's Guide is available here.

The institute's comprehensive report on the subject, Replacing Mother—Imitating Human Breast Milk in the Laboratory (pdf), is also available for download on the Cornucopia website.

#  #  #

Lights Out in India

by Niall Ferguson, Newsweek, August 6, 2012

The British—slightly less than a thousand of them—used to govern India. Without air-conditioning.

Conan O’Brien was not the only one who watched the London Olympic opening ceremonies with amazement. “Hard to believe my ancestors were conquered by theirs,” he tweeted. Every Indian watching must have been thinking the very same.

Until their TVs went dark.

The recent power outage in India interested me more than the Olympics. (I had a very British reaction to the opening ceremonies: I found them excruciatingly embarrassing.) The Indian blackout was surely the biggest electricity failure in history, affecting a staggering 640 million people. If you have ever visited Delhi in the summer, you will have some idea what it must have felt like.

“Every door and window was shut,” Rudyard Kipling recalled of summer in the scorched Indian plains, “for the outside air was that of an oven. The atmosphere within was only 104 degrees, as the thermometer bore witness, and heavy with the foul smell of badly-trimmed kerosene lamps; and this stench, combined with that of native tobacco, baked brick, and dried earth, sends the heart of many a strong man down to his boots, for it is the smell of the Great Indian Empire when she turns herself for six months into a house of torment.”

There was a reason the British moved their capital to the cool Himalayan hill station of Simla every summer. Maybe today’s Indian government should consider following their example. Because power failures like this are not about to get less frequent. On the contrary, the outage has exposed the single greatest vulnerability of the Asian economic miracle: it is fundamentally underpowered.

In the past 10 years, according to the energy giant BP, India’s coal consumption has more than doubled, its oil consumption has increased by 52 percent, and its natural-gas consumption has jumped by 131 percent. For China the figures are, respectively, 155 percent, 101 percent, and 376 percent. Asia as a whole is insatiably guzzling fossil fuels. And this is not about to stop. The McKinsey Global Institute expects India’s economy to grow at an average rate of between 7 percent and 8 percent from now until 2030.

The good news is that all this growth will do something (though not enough) to compensate for the depressed state of indebted developed economies like the United States and Europe. The bad news—apart, of course, from the soaring CO2 emissions—is that Asia’s creaking institutions may not be able to cope with the staggering social consequences.

According to McKinsey, India’s urban population will increase from 340 million in 2008 to around 590 million in 2030. By then, India will have 68 cities with populations of more than 1 million, including six megacities with populations of 10 million or more, of which two—Mumbai and Delhi—will be among the five biggest cities in the world.

To cope with this breakneck urbanization, India needs to invest $1.2 trillion over the next 20 years to upgrade the infrastructure of its cities. Mumbai alone needs $220 billion. Will it happen? In India, there is a sideways movement of the head that means neither “Yes” nor “No,” but “Please don’t ask that.”

India’s electricity grid has missed every capacity addition target since 1951. The system is so dilapidated that 27 percent of the power it carries is lost as a result of leakage and theft. Even today, 300 million people—a quarter of the population—don’t have access to the grid. That’s one reason the blackout didn’t spark more public ire.

The root of the problem is one of many leftovers of India’s post-independence experiment with socialism. Half of India’s power stations are coal-fired. Indian coal is produced by a state monopoly (Coal India). The price is controlled by the state, as is the price of electricity itself. The private firms running power stations are trapped between a lump of coal and a hard place. They cannot even trust the regional distributors to order the right amount of power.

In effect, Indians have a National Power Service similar in many ways to the National Health Service their former rulers in Britain are so proud of. Which brings me back to the Olympics. Surely the most embarrassing thing about Danny Boyle’s opening extravaganza was the surreal dance routine involving 1950s-era hospital beds and nurses. Considering just how bad the NHS is in any meaningful international comparison, you have to wonder what the Indian equivalent would be. How about a stadium full of coal-fired power stations, all dancing in the dark?

Something to look forward to at the 2028 Mumbai Olympics.

 

Bill McKibben is wrong, we must not forget that "We have met the enemy and he is us"

Published Jul 31 2012 by Energy Bulletin, Archived Jul 31 2012

by Nicholas C. Arguimbau

This is a response to Bill McKibben's Rolling Stone article, "Warming's Terrifying New Math: Three simple numbers that add up to global catastrophe - and that make clear who the real enemy is," Global Warming's Terrifying New Math. Bill McKibben has once again put his heart and soul into an attempt to stop global warming. That's more than most of us can say, and I'm afraid much more than I can say. Remember that. He is, like every living, breathing being on this earth, our friend. The stunningly well-written call to arms has apparently at this time already been read 450,000 times on-line and received 3105 written comments. The attention is well-deserved. He tells us, as do the oppressive heat and drought that have overtaken the earth, that the time is now to protect our home from turning into a living - or dying - hell.

For all that, I have a bone to pick with Bill McKibben. Just so you know, on a much smaller scale I've put my heart and soul into the environmental movement, too. 33 years ago the Sierra Club's grass roots San Francisco Bay Chapter gave me its "Conservationist of the Year" award, primarilly for forcing the Sierra Club at the state and national levels to rescind steps that were politically, pragmatically and morally wrong. Sigh. Here we go again. Mr. McKibben says the numbers "make clear who the enemy is." He is a great man with a great mind, but I'm not sure, and I don't think he or any of us should be sure, that he has chosen the only or most important "enemy." Just as an example, ninety per cent of the oil in the ground is in the hands of public agencies with no shareholders, and there is China, whose major oil companies also have no public shareholders. So he seems, if I understand him, to be taking aim at only 10% of the target.

But that's not the most serious question I have. Let me quote Mr. McKibben as he tries to sort out who the "enemy" is. He first dismisses John Q. Public. Says he:

"People perceive – correctly – that their individual actions will not make a decisive difference in the atmospheric concentration of CO2; by 2010, a poll found that "while recycling is widespread in America and 73 percent of those polled are paying bills online in order to save paper," only four percent had reduced their utility use and only three percent had purchased hybrid cars. Given a hundred years, you could conceivably change lifestyles enough to matter – but time is precisely what we lack."

That certainly has a comforting ring to it. If my "individual actions will not make a decisive difference," then I am free to go on driving my car as much as I want. I am even free to demand that gas prices get lower, even though I know full well that higher gas prices cause lower emissions. Indeed, Mr. McKibben has been careful to explain elsewhere that his constituents need not be concerned that opposition to the Keystone XL pipeline will cause Americans' gas prices to go higher.

So Mr. McKibben is telling us that he won't ask us to change our lifestyles for the sake of global warming. That's the same route George Bush took a decade ago. When Press Secretary Ari Fleischer was asked whether President Bush would ask Americans to reduce fuel consumption in the interests of a cooler, cleaner planet, Fleischer replied decisively,

"That's a big no. The President believes that it's an American way of life, and that it should be the goal of policy makers to protect the American way of life. The American way of life is a blessed one."

Soft Energy Paths/Politics

President Bush wouldn't ask the American people to alter "the American way of life." Mr. McKibben, a decade and too many tons of carbon dioxide closer to disaster than I want to to contemplate, won't ask them to alter their "lifestyles." Is there a practical difference? No. The American way of life, our lifestyles, have to change. The emissions ARE our way of life, our lifestyle. We have already passed the level of atmospheric CO2 called for by the governments of the world at Copenhagen to prevent a temperature increase of 2 degrees C and the level Mr. McKibben's organization, "350.org," has made its mission. We have no time at all to postpone implementing reductions, at least 80% overall if I am not mistaken. We can't wait until there are carbon-free alternatives, because the full technology has yet to be invented: for instance, ultracheap batteries that to date have eluded the engineers, must be designed and brought on line by the billions. Nor are non-fossil home furnaces with non-fossil ultimate energy sources going to be put in every home tomorrow. Nor are our cars going to be turned to electricity or even to natural gas tomorrow. We don't have the technology. We don't have the capital. Mr. McKibben seems effectively to be limiting us to a search for new technology, which is the course that has failed us for decades.Technological changes of necessary magnitude are not going to happen in the five years the International Energy Agency gives us when we can no longer prevent even a dangerous 3.5 degree increase and will be on the way to a 6-degree increase (ELEVEN degrees F!), which will make a large portion of the earth uninhabitable, as well as drowning out the world's coastal cities and some whole nations. So by failure to address lifestyles, the only physically possible means for reducing emissions in a timely fashion however difficult it may be, we are bequeathing a largely uninhabitable planet to future generations.

But Mr. McKibben has another comforting, if inadequate answer: "Given a hundred years, you could conceivably change lifestyles enough to matter – but time is precisely what we lack." We might of course ask ouselves, isn't that at least partially because the environmental "leaders" have never, ever asked their followerrs in a serious way to conserve? The trouble is, until lifestyle changes are made, the emissions are still happening. Isn't it a tautology that to reduce emissions of CO2, you have to reduce emissions of CO2? And that to reduce emissions of CO2 you have to change lifestyles? Not quite a tautology, because if we could reduce our emissions by adopting alternative fuels, the presently nonexistent ultracheap batteries, solar-electric cars, solar-electric home-heating furnaces, whatever, we wouldn't have to change our lifestyles too much. But is that going to happen in four years? Of course not. It is absolutely impossible. We're not talking mere political or practical or economic infeasibility here. The technology isn't there. The infrastructures aren't there. The capital to make it happen isn't there. It absolutely cannot happen. So we have no choice. As he says himself, "Time is precisely what we lack."

The Conversion of a Climate-Change Skeptic

by Richard Muller

from the New York Times, June 28, 2012

ALL me a converted skeptic. Three years ago I identified problems in previous climate studies that, in my mind, threw doubt on the very existence of global warming. Last year, following an intensive research effort involving a dozen scientists, I concluded that global warming was real and that the prior estimates of the rate of warming were correct. I’m now going a step further: Humans are almost entirely the cause.

My total turnaround, in such a short time, is the result of careful and objective analysis by the Berkeley Earth Surface Temperature project, which I founded with my daughter Elizabeth. Our results show that the average temperature of the earth’s land has risen by two and a half degrees Fahrenheit over the past 250 years, including an increase of one and a half degrees over the most recent 50 years. Moreover, it appears likely that essentially all of this increase results from the human emission of greenhouse gases.

These findings are stronger than those of the Intergovernmental Panel on Climate Change, the United Nations group that defines the scientific and diplomatic consensus on global warming. In its 2007 report, the I.P.C.C. concluded only that most of the warming of the prior 50 years could be attributed to humans. It was possible, according to the I.P.C.C. consensus statement, that the warming before 1956 could be because of changes in solar activity, and that even a substantial part of the more recent warming could be natural.

Our Berkeley Earth approach used sophisticated statistical methods developed largely by our lead scientist, Robert Rohde, which allowed us to determine earth land temperature much further back in time. We carefully studied issues raised by skeptics: biases from urban heating (we duplicated our results using rural data alone), from data selection (prior groups selected fewer than 20 percent of the available temperature stations; we used virtually 100 percent), from poor station quality (we separately analyzed good stations and poor ones) and from human intervention and data adjustment (our work is completely automated and hands-off). In our papers we demonstrate that none of these potentially troublesome effects unduly biased our conclusions.

The historic temperature pattern we observed has abrupt dips that match the emissions of known explosive volcanic eruptions; the particulates from such events reflect sunlight, make for beautiful sunsets and cool the earth’s surface for a few years. There are small, rapid variations attributable to El Niño and other ocean currents such as the Gulf Stream; because of such oscillations, the “flattening” of the recent temperature rise that some people claim is not, in our view, statistically significant. What has caused the gradual but systematic rise of two and a half degrees? We tried fitting the shape to simple math functions (exponentials, polynomials), to solar activity and even to rising functions like world population. By far the best match was to the record of atmospheric carbon dioxide, measured from atmospheric samples and air trapped in polar ice.

Just as important, our record is long enough that we could search for the fingerprint of solar variability, based on the historical record of sunspots. That fingerprint is absent. Although the I.P.C.C. allowed for the possibility that variations in sunlight could have ended the “Little Ice Age,” a period of cooling from the 14th century to about 1850, our data argues strongly that the temperature rise of the past 250 years cannot be attributed to solar changes. This conclusion is, in retrospect, not too surprising; we’ve learned from satellite measurements that solar activity changes the brightness of the sun very little.

How definite is the attribution to humans? The carbon dioxide curve gives a better match than anything else we’ve tried. Its magnitude is consistent with the calculated greenhouse effect — extra warming from trapped heat radiation. These facts don’t prove causality and they shouldn’t end skepticism, but they raise the bar: to be considered seriously, an alternative explanation must match the data at least as well as carbon dioxide does. Adding methane, a second greenhouse gas, to our analysis doesn’t change the results. Moreover, our analysis does not depend on large, complex global climate models, the huge computer programs that are notorious for their hidden assumptions and adjustable parameters. Our result is based simply on the close agreement between the shape of the observed temperature rise and the known greenhouse gas increase.

It’s a scientist’s duty to be properly skeptical. I still find that much, if not most, of what is attributed to climate change is speculative, exaggerated or just plain wrong. I’ve analyzed some of the most alarmist claims, and my skepticism about them hasn’t changed.

Hurricane Katrina cannot be attributed to global warming. The number of hurricanes hitting the United States has been going down, not up; likewise for intense tornadoes. Polar bears aren’t dying from receding ice, and the Himalayan glaciers aren’t going to melt by 2035. And it’s possible that we are currently no warmer than we were a thousand years ago, during the “Medieval Warm Period” or “Medieval Optimum,” an interval of warm conditions known from historical records and indirect evidence like tree rings. And the recent warm spell in the United States happens to be more than offset by cooling elsewhere in the world, so its link to “global” warming is weaker than tenuous.

The careful analysis by our team is laid out in five scientific papers now online at BerkeleyEarth.org. That site also shows our chart of temperature from 1753 to the present, with its clear fingerprint of volcanoes and carbon dioxide, but containing no component that matches solar activity. Four of our papers have undergone extensive scrutiny by the scientific community, and the newest, a paper with the analysis of the human component, is now posted, along with the data and computer programs used. Such transparency is the heart of the scientific method; if you find our conclusions implausible, tell us of any errors of data or analysis.

What about the future? As carbon dioxide emissions increase, the temperature should continue to rise. I expect the rate of warming to proceed at a steady pace, about one and a half degrees over land in the next 50 years, less if the oceans are included. But if China continues its rapid economic growth (it has averaged 10 percent per year over the last 20 years) and its vast use of coal (it typically adds one new gigawatt per month), then that same warming could take place in less than 20 years.

Science is that narrow realm of knowledge that, in principle, is universally accepted. I embarked on this analysis to answer questions that, to my mind, had not been answered. I hope that the Berkeley Earth analysis will help settle the scientific debate regarding global warming and its human causes. Then comes the difficult part: agreeing across the political and diplomatic spectrum about what can and should be done.

Richard A. Muller, a professor of physics at the University of California, Berkeley, and a former MacArthur Foundation fellow, is the author, most recently, of “Energy for Future Presidents: The Science Behind the Headlines.”

Scientists Tell Senate Panel: Climate Change Is Here and Disaster Costs Will Be Huge

Published on Wednesday, August 1, 2012 by Common Dreams

- Common Dreams staff

Climate scientists who appeared Wednesday morning before a Senate committee hearing on climate change and extreme weather impacts had stark warnings for the lawmakers: climate change is here, climate change is man-made, and climate change is going to cost us big time.

Oklahoma senator Jim Inhofe, a prominent climate sceptic, told the committe: 'The global warming movement has collapsed.' (Photograph: Axel Schmidt/AFP/Getty) Dr. James McCarthy, professor at Harvard University and lead author of several climate impact studies by the Intergovernmental Panel on Climate Change (IPCC) and other international papers, told the committee that there is "widespread agreement among specialists who devote their careers" to monitoring key indicators of global warming.

He acknowledged that, of course, climates fluctuate on a yearly basis, but that the mounting evidence of a warming world was changing the baseline of those fluctuations.

"In the future," he said, as greenhouse gases continue to increase, natural events like El Nino cycles, "Will wreak even more havoc as they break old records for warm and wet conditions across much of the globe, because they will be occurring upon a higher baseline of warming."

His IPCC colleague and climate scientist at Stanford University Dr. Christopher Fields, said that these events will have an increasingly strong impact on communities.

"Understanding the role of climate change in the risk of extremes is one of the most active areas of climate science," he said. "As a result of rapid progress over the last few years, it is now feasible to quantify the way that climate change alters the risk of certain events or series of events."

Giving examples, and citing studies to back them up, he continued:

"Climate change at least doubled the risk of the European heat wave of 2003, a high-impact extreme that led to tens of thousands of premature deaths, especially among the elderly or infirm. On the other hand, there is no evidence that climate change played a role in the serious flooding in Thailand in 2011. The primary causal agent there was altered land management. For the 2011 Texas drought, La Niña (cold water in the eastern Pacific) played a role, but recent research by David Rupp and colleagues concludes that, in a La Niña period, extreme heat is now 20 times more likely than in the 1960s."

"There is no doubt that climate has changed," Fields said. "There is also no doubt that a changing climate changes the risks of extremes, including extremes that can lead to disaster."

Despite the evidence presented, however, Republican Senator Jim Inhofe of Oklahoma was unwavering in his denial of the scientific communities findings. In his prepared opening remarks, Inhofe said: "The global warming movement has completely collapsed."

What drove the collapse, he argued, "was that the science of the United Nations Intergovernmental Panel on Climate Change (IPCC) was finally exposed" and said the IPCC was "a political body, not a scientific body."

Also in attendance, however, was Senator Bernie Sanders (I-VT), who earlier this week gave Senator Inhofe a scathing rebuke from the Senate floor on his climate science denialism. "The bottom line," Sanders said on Monday, "is that when Senator Inhofe says global warming is a hoax, he is just dead wrong, according to the vast majority of climate scientists."

“For better or worse, when Sen. Inhofe speaks, the Republican Party follows," Sanders declared. "And when the Republican Party follows, it is impossible to get real work done in the Congress."

According to The Guardian's Suzanne Goldenberg, Sanders continued his assault on Inhofe's denialism at Wednesday's hearing, "asking the scientists on the panel for their opinions on some of Inhofe's more notorious assertions – that climate change is a hoax, that the planet is actually in a state of cooling, and that such environmental concerns were a conspiracy by the UN, Al Gore, and Hollywood."

The scientists, reported Goldenberg, did not support Inhofe's claims.

Open Letter to the Organic Community: The California Ballot Initiative to Label GMOs

Published on Thursday, August 2, 2012 by Common Dreams

by Ronnie Cummins

After 45 years of hard work and grassroots struggle, the organic community has built up a $30-billion organic food and farming industry and community. This consumer and small farmer-driven movement, under steady attack by biotech and Big Food lobbyists, with little or no help from the federal government, has managed to create a healthy and sustainable alternative to America’s disastrous, chemical and energy-intensive system of industrial agriculture. Consumer demand is behind strong organic sales. Conscious of the health hazards of genetic engineering and chemical agriculture, and the mortal threat of global warming and climate change, millions of Americans are demanding food and other products that are certified organic.

It’s a hopeful sign that, in spite of economic recession, organic foods now make up 4.2% of all grocery store sales. However given the magnitude of the country’s public health, environmental, and climate crisis, 10% annual growth in the organic sector is simply not enough to reach the proverbial “tipping point” before our current crisis metastasizes into what can only be described as a catastrophe.

 

In the food sector, we cannot continue to hand over 90% of our consumer dollars to out-of-control, biotech, chemical-intensive, energy-intensive, greenhouse gas polluting corporations  and "profit at any cost" retail chains. The growth of the Organic Alternative is literally a matter of survival. After two decades of biotech bullying and force-feeding unlabeled and hazardous genetically engineered foods to animals and humans, it's time to move beyond defensive measures - such as petitioning the FDA - and go on the offensive.  With organic farming, climate stability, and public health under the gun of the gene engineers and their partners in crime, it's time to do more than complain. With over 1/3 of U.S. cropland already contaminated with Genetically Modified Organisms (GMOs), with mounting scientific evidence that GMOs cause cancer, birth defects, and serious food allergies,  and with new biotech mutants like alfalfa, lawn grass, ethanol-ready corn, 2,4 D-resistant crops, and genetically engineered trees and animals being fast-tracked for approval by the government, with absolutely no pre-market safety-testing required, time is running out.

 

The burning question for us all then becomes how - and how quickly - can we move healthy, organic products from a 4.2% market niche, to the dominant force in American food and farming?

The first step is to change our labeling laws. Nearly 80% of non-organic processed foods, including so-called “natural” foods, contain genetically engineered bacteria, viruses, antibiotic-resistant genes, and foreign DNA. Yet none of these foods are labeled. No wonder only 30% of Americans realize they’re probably eating GMOs on a regular basis. Health-minded and environmentally conscious consumers actually buy more products marketed or labeled as “natural” ($50 billion a year) than they do organic ($30 billion), either because they don’t understand the difference between organic and “natural”, and/or because so-called “natural” foods are typically cheaper than certified organic. For instance, two-thirds of the foods sold in Whole Foods Market or Trader Joe’s are not organic, but rather “natural.” Polls indicate that consumers are confused about the qualitative difference between organic and natural products, with a near-majority believing that “natural” means “almost organic.”

 

It’s time to put an end to this massive fraud, and take back our right to know what’s in our food. Since the federal government and the White House seem to listen more to Monsanto and Big Ag than the 90% of Americans who support mandatory labeling of GMOs, OCA and allied activists have decided to bypass Washington politicians and take matters into our own hands.

 

What is likely the most important food fight in a generation is unfolding in California. The grassroots-powered Nov. 6 California Ballot Initiative (Proposition 37) to require labels on genetically engineered foods and to ban the routine industry practice of marketing GMO-tainted foods as “natural” or “all natural” is approaching a decisive moment. The outcome of this ballot initiative will determine whether GMO foods are labeled, not only in California but across the entire United States and Canada as well. It’s time for all of us who care about an organic and sustainable future to close ranks and support the Nov. 6 California Ballot Initiative (Proposition 37). Over 650 organizations, organic companies and retail stores have already endorsed the campaign. But we need thousands more.

 

We need volunteers to help out -  in California and nationwide. Please sign up here if you are willing to approach the managers of the retail stores, CSA, restaurants, or farmers market where you regularly buy your organic food and ask them to join the more than 100 retail stores that have already publicly endorsed Prop 37. Once your neighborhood health food store or co-op has endorsed the campaign, you can get them further involved in distributing campaign information and raising money. CA and our allies in this campaign to pass Prop 37 have raised almost $4 million dollars so far, but Monsanto, the Grocery Manufacturers, and the Farm Bureau will spend $20-40 million to defeat Prop 37. Thank you  to the 15,000 people who have already made donations to OCA or the OCF for this campaign, but we need to raise even more.

 

Restoring consumers' right to know, banning the industry practice of marketing GMO-tainted foods as “natural,” and starting to drive genetically engineered foods off supermarket shelves will not solve all of the life and death issues that are currently staring us in the face: the climate crisis, endless wars, economic depression, corporate control over government, and the health crisis. But cutting Monsanto and the biotechnocrats down to size and restoring consumer choice are good first steps toward sustainability and a healthy food and farming system. Just as important, in political terms, by defeating the Biotech Bullies and indentured politicians, we can begin to restore the tattered self-confidence of the American body politic. A resounding victory by the organic community in the California Prop 37 campaign will prove to ourselves and the currently demoralized body politic that we can indeed take back control over the institutions and public policies that determine our daily lives. Now is the time to move forward. Support Prop 37, the California Right to Know Genetically Engineered Foods Act. This is the food fight of our lives. Please join and support us in this historic struggle.

Ronnie Cummins is a veteran activist, author, and organizer. He is the International Director of the Organic Consumers Association and its Mexico affiliate, Via Organica. http://www.organicconsumers.org; http://www.viaorganica.org

Saddled with Student Debt? Welcome to America's Screwed Generation

Published on Wednesday, August 1, 2012 by The Guardian

I got into a good university and received a great education, but – like thousands of Americans – I am paying a high price

by Natalia Antonova

I may not look like it, but I am a modern-day serf. Saddled with thousands of dollars of student debt – debt that has been stripped of all consumer protections and is non-dischargeable in bankruptcy – I am part of a screwed generation.Earlier this year, the collective student loan burden in the United States passed the $1tn mark. Analysts are increasingly referring to a student loan bubble that could result in a crisis similar to the subprime mortgage crisis of 2008.

A bad job market for recent graduates and skyrocketing education costs have greatly exacerbated the problem. We are seeing a phenomenon in which the old are essentially eating the young, with the baby boomers having a disproportionate amount of financial privilege. And among the nation's elite, there is a terrible sense of denial about just how bad the younger generations have it – old white guys in Congress believe we're merely lazy and entitled, having not had the good grace to be born into families with trust funds. It's a class war, and the middle class is losing.

My own student debt saga began in 2002, when my family's finances went south after I had successfully applied to Duke University in Durham, North Carolina. I was reluctant to take out loans that would cover half the cost of my pricey education, but every adult advising me on the matter was adamant that going to Duke was not an opportunity to pass up. I also realised that my financial aid package in a cheaper state school would not be that much better. So I rolled the dice. I received a great education and have, so far, had good luck in the job market.

Yet following graduation every major decision I made was shaped by my terror of defaulting on the loans. I knew the consequences would be devastating: interest and late fees would pile up, driving me deeper into debt as my credit rating was ruined, resulting in not being able to own a home or even rent an apartment. I was skimming on healthcare, stressing out, and taking on more and more extra work. In 2007, I went abroad – though I continued to pay my loans.

The trouble with serfdom is that serfs don't last very long. Eventually, my body started to turn on me – an old back injury and cheap dental work gone wrong began to haunt me. I required massive amounts of physical therapy. I got better, but my savings were wiped. When I unexpectedly got pregnant soon after, I wondered if I "deserved" to have a child – after all, parenthood was for the wealthy, not for losers like me.

"Since when do you need permission from a loan company to start a family?" my Russian husband, whom I met after moving to Moscow, asked me. "You don't understand – they own me for life," I sobbed pathetically, overwhelmed by pregnancy hormones and the terror of insolvency. He told me to get it together. When it was time to give birth to our son, we relied on Russia's state healthcare system – a good choice, as it turned out. I had money for a private clinic squirrelled away, but gave all of it to Sallie Mae Inc, which owns my private debt. As comic writer David Sedaris put it: "Sallie Mae sounds like a naive and barefoot hillbilly girl but in fact they are a ruthless and aggressive conglomeration of bullies." I picture Sallie Mae as a beast I had to keep feeding – lest it fed on me.

This year, I still face default on my private loans. The late fees have piled up. My debt is in the stratosphere. I'm tired of fighting. The system seems rigged, anyway. Charlie Kent, a fellow debtor and student loan activist, recently said: "Goodbye hope, hello fast slide into poverty." I advised him to take a job abroad. I predict that more and more educated people will find themselves unable to cope with the reality of life in the US right now.

Our lawmakers think the country can afford to lose us – in more ways than one. Student loan suicides are not unheard of, though it's hard to obtain statistical data on the subject. I know that ever since I "came out" about my student debt problems, I've read dozens of emails and comments from people who are thinking about killing themselves, alongside hate mail from fellow Americans who cheerfully advise me to take my own life. And just this week, I received a chilling message about the apparent suicide of an old acquaintance.

Robert's story seems similar to mine. After suffering from health problems, being unable to keep up with payments and running out of forbearances, he saw his student loans balloon. Depressed and desperate, he took his own life. He had been the first in his family to go to college. Poor Robert. He thought higher education would be his way out of poverty.

© 2012 The Guardian

Natalia Antonova is the deputy editor of The Moscow News, and also works as a playwright. She lives with her husband in Moscow.

Full Employment Is Possible!

Published on Tuesday, July 31, 2012 by The Nation

by Laura Flanders

Prominent economists have been expounding for months on the dire consequences of this country’s unemployment crisis. As recently as this May, Dean Baker and Ken Hassett exhorted us to pay vigilant attention. In an op-ed headlined “The Human Disaster,” they described unemployment as “nothing short of a national emergency.”

Still, the election discussion plods on with barely a nod to the criminal unemployment disaster.

For bracing relief, check out the latest from economist Robert Pollin, professor at the University of Massachusetts, Amherst. Pollin’s latest book, Back To Full Employment, lays out a roadmap to recovery that wouldn’t take a miracle. It wouldn’t even require a Democratic sweep this November; merely action by the Fed and a progressive movement worth its salt.

When world leader companies like Caterpillar Inc. are putting the squeeze on their workers despite accruing record-setting profits; when banks are hoarding $1.6 trillion, money is cheap and government borrowing costs are at their lowest in history, there’s simply no excusing existing levels of poverty, and the poverty-level wages currently prevailing in the not-so-United States.

There’s no excuse for 6 million people to be living on food stamps alone or for 103 million to be not getting by on wages that barely lift them above poverty (see Peter Edelman on this, if you don’t believe it). There’s no excuse, and there’s no point simply beating up on trade unions.

The world’s best president could roll back every last anti-organizing law and set organizers free to sign up every last employed American, and still the standing pool of desperate unemployed would drain worker power away. To expect otherwise is to wait for Batman.

“it’s beyond the Democrats. It’s beyond Barack Obama,” says Pollin in this interview.

Economists know how to maintain decently full employment. Coming out of the Great Depression, says Pollin, we had some basic tools. “To run an economy at a level of fundamental decency, you try to achieve full employment.” Neoliberalism, under Thatcher and Reagan, he says, “tossed it all away.”

The last time the US saw relatively full employment wasn’t in ancient history. It was at the end of the 1990s. We can do it. Pollin lays out how. What we need is a progressive movement with full employment at the spear-tip of its agenda.

Alexander Cockburn and Pollin discussed full employment in the Nation in 1987. It’s chilling how little has changed. You can read that article here [pdf]. A full transcript of my conversation with Pollin will appear in the next print edition of CounterPunch.

© 2012 The Nation

Laura Flanders was the founder and host of GRITtv and is the author of the books BUSHWOMEN and Blue Grit. She's the editor of At the Tea Party

Why Private Equity Firms Like Bain Really Are the Worst of Capitalism

by Josh Kosman from Rolling Stone, May 23, 2012

By placing his career at Bain Capital at the center of his presidential campaign, former buyout artist Mitt Romney has put the private equity industry on trial.

About time.

Romney wants us to believe that critics of private equity are against capitalism. They’re not. They’re against a predatory system created and perpetuated by Wall Street solely to pump its own profits.

Defenders of private equity say firms like Bain, which Romney co-founded in 1984, exist to build businesses, creating jobs and prosperity all the while. "We started Staples, we started the Sports Authority, we started Bright Horizons children centers," Romney said at one of the GOP presidential debates last year. "Heck, we even started a steel mill in a farm field in Indiana. And that steel mill operates today and employs a lot of people."

And Romney also touts Bain's success at taking struggling companies and putting them on a path to profitability. "Sometimes we acquired businesses and tried to turn them around — typically effectively — and created tens of thousands of new jobs," he said at the same debate.

Romney’s whole election pitch turns on the story he tells about his time at Bain, which goes like this: I, Mitt, have a record of building businesses and creating jobs, and what I did for floundering companies, I'll do for the U.S. economy.

There's only one problem with Romney's story: It doesn’t describe most of what private equity firms actually do. The companies Romney holds up as successes – Staples, Sports Authority et al. – were not Bain private equity deals; they were venture capital investments in companies that Bain neither owned nor ran. All well and good: Venture capital is a good thing – essential for funding the growth of new and developing companies. But Romney didn't make his fortune through venture capital­; he made it through private equity – and private equity, as President Obama pointed out this week, is a very different proposition. "Their priority is to maximize profits," the president said of PE firms, and "that’s not always going to be good for businesses or communities or workers."

Here’s what private equity is really about: A firm like Bain obtains cheap credit and uses it to acquire a company in a "leveraged buyout." "Leverage" refers to the fact that the company being purchased is forced to pay for about 70 percent of its own acquisition, by taking out loans. If this sounds like an odd arrangement, that's because it is. Imagine a homebuyer purchasing a house and making the bank responsible for repaying its own loan, and you start to get the picture.

O.K., but what about this much more virtuous business of swooping in and restoring struggling companies to financial health? Well, that's not a large part of what private equity firms do, either. In fact, they more typically target profitable, slow-growth market leaders. (Private equity firms presently own companies employing one of every 10 U.S. workers, or 10 million people.)

And that's when the fun starts. Once the buyout is completed, the private equity guys start swinging the meat axe, aggressively cutting costs wherever they can – so that the company can start paying off its new debt – by laying off workers and cutting capital costs. This process often boosts operating profit without a significant hit to the business, but only in the short term; in the long run, the austerity approach makes it difficult for companies to stay competitive, not least because money that would otherwise have been invested in expansion or product development – which might increase revenue down the line – is used to pay off the company's debt.

It takes several years before the impacts of this predatory activity – reduced customer service, inferior products – become fully apparent, but by that time the private equity firm has generally resold the business at a profit and moved on.

But what happens to the companies after they've been resold? It’s not a pretty picture, as I discovered while researching my book The Buyout of America. Consider a few numbers:

• Of the twenty-five companies that private equity firms bought in the 1980s that borrowed more than $1 billion in junk bonds, more than half went bankrupt.
• Of the ten biggest buyouts of the 1990s, six, including Saks Department Stores, fared much worse than they likely would have had they not been acquired in leveraged buyouts. Three of the 10 produced mixed results. Only one business performed better than its peers.
• As for the 2000s, four of the companies acquired in the ten biggest buyouts of this decade, including Dallas utility Energy Future Holdings, are already in considerable distress.
• Private equity-owned companies reduce jobs over their first two years of ownership by 3.6 percent more than their competitors, and that the worst job cuts come in the third year after a buyout, according to a study by the World Economic Forum.

And let's take a look at the record specifically of Bain Capital, which Romney owned from 1992 to 2001.

• 1988: Bain put $10 million down to buy Stage Stores, and in the mid-'90s took it public, collecting $184 million from stock offerings. Stage filed for bankruptcy in 2000.
• 1992: Bain bought American Pad & Paper, investing $5 million, and collected $107 million from dividends. The business filed for bankruptcy in 2000.
• 1993: Bain invested $25 million when buying GS Industries, and received $58 million from dividends. GS filed for bankruptcy in 2001.
• 1994: Bain put $27 million down to buy medical equipment maker Dade Behring. Dade borrowed $230 million to buy some of its shares. Dade went bankrupt in 2002.
• 1997: Bain invested $41 million when buying Details, and collected at least $70 million from stock offerings. The company filed for bankruptcy in 2003.

Romney owned 100 percent of Bain Capital making him involved in all these deals, which represented more than 20 percent of the money Bain made from its investment funds between 1987 and 1995. Bain’s focus during all this time was leveraged buyouts, and it had not made venture investments since its earliest days.

All of this is bad enough. But leveraged buyouts don't only hurt businesses, workers, and the economy generally – they also short-change taxpayers, via a giant loophole in the tax code that enables companies to deduct loan interest from taxes. The provision was originally intended to encourage borrowing to build new factories, not to finance leveraged buyouts. But, according to Notre Dame Professor Brad Badertscher, private equity-owned companies paid a 22 percent tax rate before being bought, and only 10 percent the year after being acquired. That adds up to a savings of $130 billion in taxes since 2000.

Private equity has legions of defenders, from Wall Street to Washington (the industry is very well connected; four of the past eight U.S. Treasury Secretaries have worked in it); but when they point to the relatively modest venture capital investments of companies like Bain, don't be fooled. Look instead to the way Bain and its peers made the bulk of their money – through leveraged buyouts – and see who made out best in most of the deals: the businesses or the private equity guys, like Mitt Romney.

Josh Kosman is the author of 'The Buyout of America: How Private Equity Is Destroying Jobs and Killing The American Economy'.

How Mitt Romney Drove Companies Bankrupt, Raided Pension Funds and Paid Himself Handsomely

by John Lawrence from the San Diego Free Press

Mitt Romney's Bain Capital was very good at making money for Mitt Romney. At the same time it loaded companies Bain bought with debt, borrowed even more money to pay dividends to Mitt Romney and destroyed or outsourced lots of jobs. It even raided pension funds. Then Romney turns around and holds himself up as a "successful businessman." Sure he was successful in terms of making money for himself. But this was at the expense of those workers at previously successful companies who lost their jobs when those companies went bankrupt thanks to the debt loaded on them due to money borrowed from banks that went directly into Romney's pocket.

Here's how a private equity fund such as Bain Capital works. It picks a successful company and then takes it over with a leveraged buyout (LBO). The money borrowed from a bank to pay off the owner or stockholders does not become the debt of Bain Capital. It becomes the debt of the company that was taken over. You might ask, "Why would a bank even loan money to place a company in debt for the purposes of being taken over by Bain Capital which does not even assume the debt?" Well, it's for the same reason that so many subprime loans were available. The bank does not continue to hold the loan. It offloads it to investors such as pension funds so the bank doesn't really care. They have no skin in the game. Why not loan Mitt Romney money to take over companies? There's good money in those commissions.

Pension funds show up again and again as the fall guys in Wall Street machinations. They are the dumb clucks who keep trying to make up for the fact they are 50% underfunded by entering into sucker bets and losing even more money. And since Romney and Bain do not assume the debt themselves, they don't care if the overleveraged company goes bankrupt since, if it does, they lose nothing. That company is just a money conduit for Romney since, as soon as they take it over, they have the company borrow even more money in order to pay Romney a dividend. You might ask. "Why would the owners of a company or the shareholders sell out to Bain Capital?" Because Bain offers them a really good deal, that's why. After all they don't care if they overpay. They're using OPM, other people's money. It's all based on a loan to the company they intend to take over, not a loan to Bain itself. Bain takes hardly any risk at all. So much for the risk takers that Romney eulogizes.

Romney pioneered the strategy of having a company Bain took over in a leveraged buyout borrow even more money to pay himself a dividend. So now the company is staggering under a huge load of debt and in many cases they can not keep up with the payments. In 1994 Bain bought medical equipment manufacturer Baxter International. After a merger with another company, it became known as Dade Behring. Bain then reduced R&D investment because Bain's game plan was to only hold the company for five years or so. So why invest for the long haul? The money borrowed from banks for the LBO was usually for five to eight years with small monthly payments and a big balloon payment at the end. About five years after Bain had acquired Dade, it was looking to get out. But not before it drained even more money from Dade and placed the company and its workers in even more jeopardy.

Bain froze the workers' pension benefits and converted them from a defined benefit plan, in which employees were entitled to 75% of the average of their last three years' salaries, to a cash-balance plan in which they would get a lump sum equal to what they were owed in 1999. Workers were furious. They threatened to sue, but never went through with the lawsuit because they were fearful of losing their jobs. Dade saved $10 to $40 million with this strategem. The very month Dade did the conversion, it used the projected savings as the basis to borrow $421 million placing Dade in even more debt. The result was that Dade paid Bain and its partner Goldman Sachs the entire amount as a dividend. Bain and Goldman had only put down $81 million to buy the company in the first place. Yet in June 1999 they received $365 million from the dividend, a gain of 4.3 times their initial investment. Consequently, Dade's debt more then doubled to $871 million in order to make this huge payment to Bain and Goldman. Romney had left operational management of Bain that year, though his disclosures show that he owned 16.5 percent of the Bain partnership responsible for the Dade investment until at least 2001. In order to make their loan payments, Dade had to cut not only R&D but also the core of the company. It sold off assets and fired workers. Nevertheless, the whole thing came crashing down in 2002 when Dade filed for bankruptcy protection. It was the end of Bain's and Goldman's involvement with Dade. They had looted the entire company, raided the pension fund, albeit indirectly, and caused mega job losses. Nevertheless, Romney could turn around calmly, face the cameras and proclaim himself a "successful businessman" for having made hundreds of millions of dollars for himself and his investors. Bain and Goldman had made a $280 million profit on an investment of only $85 million. Is this what America is all about? Is this what freedom consists of? Romney seems to think so.

Later Dade emerged from bankruptcy and, after increasing its investment in R&D, went on to become a successful company probably because Romney and Bain were no longer in the picture. They had done their part forcing the company into bankruptcy by having Dade take out huge bank loans in order to pay Romney and Goldman dividends.

Bain used the same playbook with several other companies: put down a small down payment, get a bank loan (which the bank resells to other investors) for a leveraged buyout (in which the company not Bain assumes the debt) and then after taking ownership get another bank loan to pay Bain a huge dividend while saddling the company with even more debt. As a result of these tactics at least six companies filed for bankruptcy between 1992 when Romney took over Bain Capital and 2004. The reason that Romney wants us to believe that he had nothing to do with Bain after 1999 is that most of these companies filed for bankruptcy between 2000 and 2004. Nevertheless, according to SEC filings Romney was sole owner and operational manager of Bain until 2001. During this period there were several multimillion-dollar investment deals, bankruptcies and a spate of layoffs and overseas job shifts at Bain-owned companies. No wonder Romney doesn't want to release his tax returns. They would show that Romney took dividends from several companies that went bankrupt during this period including Stage Stores, Ampad, GS Industries, Dade Behring, DDi and KB Toys. Mitt Romney, the successful businessman, doesn't want you to know how he profited from driving companies bankrupt and destroying jobs. In any event Bain made more than 20 percent of its money in its 1987 to 1995 funds from five companies that borrowed money to pay it dividends or buy back shares that later collapsed.

Since balloon payments on many of the loans that private equity funds had their take-over targets take out are due in the next few years, the eventual collapse of those companies could trigger the next big financial crisis. If Mitt Romney is elected President, it will be just in time to deal with that.

This article relies on the book, "The Buyout of America" by Josh Kosman (sub-title: How Private Equity Will Cause the Next Great Credit Crisis) and the Vanity Fair article, "Where the Money Lives," by Nicholas Saxson.

The Terrible Economy and the Anti-Election of 2012

by Robert Reich

Sunday, July 29, 2012

The worst economy since the Great Depression and you might think at least one of the candidates would come up with a few big ideas for how to get us out of it.

But you’d be wrong. Neither candidate wants to take any chances by offering any large, serious proposals. Both are banking instead on negative campaigns that convince voters the other guy would be worse.

President Obama has apparently decided against advancing any bold ideas for what he’d do in the second term, even if he has a Congress that would cooperate with him. 

He’s sticking to a worn script that says George W. Bush caused the lousy economy, congressional Republicans have opposed everything he’s wanted to do to boost it, it’s slowly on the mend anyway, the Bush tax cuts shouldn’t be extended for the rich, and we shouldn’t take a chance electing Romney.

Yet the public wants bigger ideas from the President, and wants to know what he’ll do in his second term to get us out of this mess. A New York Times-CBS News poll released last week showed that a majority of voters believe the president “can do a lot about” the economy. That’s a double-digit jump from the fall of 2011.

The President could propose a new WPA, modeled after the Depression-era jobs program that hired hundreds of thousands of jobless Americans to rebuild the nation’s infrastructure, or a new Civilian Conservation Corps.

He could suggest permanently exempting the first $25,000 of income from payroll taxes, and making up the lost revenues by eliminating the ceiling on income subject to it. He could propose resurrecting the Glass-Steagall Act and breaking up the big banks, so Wall Street doesn’t cause another financial collapse.

But you won’t hear any of this, or anything else of this magnitude, because the White House doesn’t want to take any risks. Polls give Obama a slight edge in the critical eight or so battleground states, so, the thinking goes in the Obama camp, why say anything that might give Romney and the GOP a target?

Besides, polls also show Romney isn’t well-liked by the electorate.

So Obama has decided to campaign as the anti-Romney.

Mitt Romney is playing it even more cautiously. His economic plan is really a non-plan: more tax cuts for the rich, undefined spending cuts, and no details about how he’d bring down the budget deficit. No presidential candidate since Herbert Hoover in 1928 has been more vague about what he’d do on the critical issues facing the nation.

Romney’s advisors assume Obama can’t possibly be reelected with the economy this bad. Just 44 percent of registered voters in a Washington Post-ABC News poll earlier this month approve of the job the president is doing on the economy, while 54 percent disapprove. Even more encouraging for Romney is that 41 percent of those polled “strongly” disapproved of Obama’s economic performance, while just 21 percent “strongly” approved — an enthusiasm gap of major proportion.

So Romney’s advisors have concluded that all Romney has to do between now and Election Day is avoid a mistake that might give Obama and the Democrats something to shoot at.

Romney has decided to campaign as the anti-Obama.

The two anti-the-other-guy strategies fit with a ton of negative advertising that’s just begun but will reach mammoth proportions after Labor Day. Much of it will be financed by super-PACs and by political fronts already taking in hundreds of millions of dollars in secret donations. Romney’s camp hopes to out-negative Obama by almost two to one.

So whatever happens on Election Day, the next president will have to contend with two handicaps. The public won’t have endorsed any new ideas or bold plans, which means he won’t have a clear mandate to do anything on the economy.

The only thing the public will have decided is it fears and distrusts the other guy more. Which means the winner will also be burdened by almost half the electorate thinking he’s a scoundrel or worse.

The worst economy since the Great Depression, but we’re in an anti-election that will make it harder for the next occupant of the oval office to do a thing about it.