Thursday, November 11, 2010

Vulture Capitalism



Cowboys suffer domain name failure at the worst possible time

By Doug Farrar - Yahoo Sports

It wasn't an exciting enough event when the Dallas Cowboys fired head coach Wade Phillips on Monday. When such a move happens, one of the first stops for a fanbase is a team's official website; it's where first press conferences and press releases are posted, as well as any ancillary news. But Cowboys fans looking for new takes in the wake of the news that Phillips was gone and Jason Garrett was the new interim coach most likely went to the team's official site and saw something like this:


(H/T to Will Brinson of CBS Sports for the screencap)

According to the Dallas Morning News, the team forgot to renew the domain, and the site was left blank. The Cowboys' marketing arm, led by one Jerry Jones, Jr., quickly renewed the domain, but that process can take up to two days to go through, and for a website to propagate on a domain -- even if it's been there before. The site is up, but until Tuesday morning, there were people on Twitter reporting that they could still see the "fail" page on certain browsers.

The most alarming aspect of the failure to renew a domain (especially one of this magnitude -- only the NFL's official site is a more popular league-approved portal) is the astonishing lack of attention to detail it represents. Domains can be renewed for multiple years at a time, and Network Solutions (or whomever you might establish a domain name with) generally sends multiple email notices as the renewal date draws near to the person listed as the primary website contact. It's a set-it-and-forget-it process that takes about five minutes.

The 1-7 Cowboys team on the field isn't the only one looking for a few wins these days -- it's a good bet that the franchise's Internet marketing folks have been hearing some unfriendly words this week as well. They're just lucky no rogue Giants, Eagles or Redskins fans bought the domain and held it hostage, perhaps insisting on Phillips' re-hire as a bargaining chip!

Wednesday, November 10, 2010

Cat Food Commission Releases 'Shock Doctrine' Draft Version

Fiscal Commission Recommendations: VA Co-Pays, Top Tax Rate 23%
Wednesday, November 10, 2010 by FireDogLake
by David Dayen

OK, here’s the draft document for the cat food commission co-chair’s mark. In addition, there’s a page with specific “illustrative cuts”, $100 billion in domestic spending and $100 billion in military spending. Between the two, you can get a sense of what Bowles and Simpson have planned. Keep in mind that this is more of a shock doctrine document than a blueprint; they have no support on the commission for all this, and they’re trying to gather it with this early release.

So let’s bullet point some highlights:
• They’re nice enough to wait a whole year to implement the cuts; they wouldn’t start until FY 2012 – in other words, the next budget.

• Their goal is to put revenue and spending at 21-22% of GDP. Their plan would reduce the deficit below the recommended 3% of GDP by 2015, down to about 2.2%.

• They put in spending caps, maybe the worst idea known to man, the kind of program that has turned Colorado so sharply negative that the business community begged the state to lift them. These caps, which are unenforceable, as a current Congress cannot be bound by a previous Congress, would bush spending 18% below the baseline by 2020, a drastic bit of austerity.

• 75% of the solutions in the co-chair mark are spending reductions, 25% are tax increases.

• They want to add co-pays to the Veterans’ Administration and TRICARE, as well as pushing individuals covered by TRICARE into an employer policy. They also want to freeze noncombat military pay for three years. And, they want to end schools for families on military bases, instead reintegrating soldier’s kids into the public school system (because that’s so easy for a military family that moves every other year).

• They would cut the federal workforce by 10%, freeze all salary increases and bonuses for three years, and reduce Congressional and White House budgets by 15%. Surely this is the way to a better and more efficient federal workforce.

• They would eliminate all funding for commercial space flight, as well as the Corporation for Public Broadcasting, and increase fees at national parks and the Smithsonian museums.

• Increase co-pays in Medicaid and cost sharing in Medicare. In addition, the plan would cap Medicaid/Medicare growth, so that the government would have to either increase premiums and co-pays or raise the Medicare eligibility age if the cost grows above the baseline.

• Massively overhaul the tax code. They have a couple different options on this. In the first, there would only be three brackets: at 8%, 14% and 23% for the top bracket. All tax expenditures – $1.1 trillion, including the Earned Income Tax Credit and the child tax credit, would be eliminated. The corporate tax rate would go down from 35% to 26% as well. Option 2 borrows from the Wyden-Gregg tax reform, establishing rates at 15%, 25% and 35%, increasing the standard deduction, capping the mortgage interest deduction (and eliminating it for second homes), limiting the charitable deduction, eliminating other tax expenditures, and capping the employer deduction for health care. Corporate rates would also go down, with loopholes removed.

• They would increase the gas tax by 15 cents a gallon beginning in 2013, to pay for transportation projects.

• They would pay for the “doctor’s fix” by cutting other reimbursements to hospitals and drug companies, as well as through tort reform (yeah, that’ll do it). They would also speed up a lot of the cost controls in the health care law. They also ask, if health care costs are still rising after the implementation of the exchanges, for Congress to consider a variety of options, including this:
Add a robust public option and/or all-payer system in the exchange
• Reduce farm subsidies by $3 billion per year.

• On Social Security, gradually increase the retirement age to 69 by 2075. They would also institute progressive price indexing to cut scheduled benefits for middle and high-income earners. They would index cost of living increases to inflation and not wages. They would also increase the payroll tax to capture 90% of wages, rather than the current 86%. Social Security savings would stay inside the program to keep it solvent, not be used for deficit reduction.
There’s a lot more in there, but those are the highlights. It’s a very aggressive plan.

Billionaire Launches Campaign to Slash Social Security

by Jane Slaughter - Wednesday, November 10, 2010

Why does a billionaire want to take away your Social Security benefits?

Peter Peterson is 84 years old. He's old enough to relax and enjoy the fruits of the years he was well paid for managing other rich people's money. Why is he spending his fortune to convince politicians they should ruin the average guy's retirement?

Today Peterson announced the next facet in his long campaign to hack Social Security, including a joke Presidential candidate named Hugh Jidette ("huge debt") and a website called Owe No. His aim is to convince Congress to raise the retirement age, cut Social Security's cost-of-living increases-and raise the payroll taxes we pay for Social Security and Medicare.

It wouldn't matter what one cranky octogenarian billionaire had to say if he weren't putting $6 million into ads, funding "expert" commissions, and spreading lies designed to panic the populace.

Maybe Peterson figures offense is better than defense-he's got a lot to defend. He made his fortune as a hedge fund manager-that is, moving money around-so he ought to be living in fear. Someone might get the idea he and his buddies would be good folks to tax. It's like Willie Sutton, the famous bank robber, once said. Asked why he robbed banks, Sutton replied, "Because that's where the money is."

Peterson and pals are the ones George Bush gifted with big tax breaks that are set to expire December 31. Although he says his top priority is reducing the deficit, Peterson doesn't want to cut that deficit by putting his own taxes back where they were in the 1990s.

It's hard to get your head around how rich Peterson is, and how many rich people there are in this country. But here's how to put their money in perspective, in relation to Social Security. If Congress decides to extend those tax cuts, for households making $250,000 or more (the top 2 percent of earners), the money the Treasury will lose would be enough to put Social Security in the black for 75 years--and raise benefits by 2 percent.

First They Took Your House

Meanwhile, we have a big chunk of near-retirees today who have barely seen their wages rise at all during their working lifetimes, the last 30 years. They couldn't save a huge amount; what they saved they had in home equity. And that was wiped away by the financial shenanigans of Peter Peterson and his ilk. There are millions of potential retirees who will have next to nothing except Social Security if they're ever able to retire. It wasn't enough for Wall Street to rob us of our houses' worth and what we had in 401(k)s. Now they want to take Social Security too.

Like I said, I don't understand it. Is there no shuffleboard court where this man could spend his golden years?

A friend wrote to me today. He's working his butt off to keep Congress from raising the retirement age and cut back Medicare. He said:
My mother was an LPN in a nursing home. The last few years that she worked, her back and legs ached so much that she literally had to crawl up the stairs to her bedroom at night. If someone told her that she would have to work three more years before retirement because hedge fund managers don't want to pay the same percentage of their income towards Social Security as she did, she would tell you what to do.
A slew of organizations is organizing a Call-In Day to Congress November 30. That's the day before President Obama's deficit commission is set to release its recommendations for raising the retirement age. They're saying "Owe No You Don't"-the goal is to create a groundswell of outrage that will make the recommendations dead on arrival.

Soft Landing for Bankers, Hard Times for Everyone Else

by Jim Hightower
Wednesday, November 10, 2010 by

I've seen some truly amazing feats of magic, but here's one that beats them all. Right before your eyes, this thing rises into the air on its own, with no wires or mechanical devices giving it lift. And it hovers there effortlessly.

But it's not magic, for magic is an illusion, and this gravity-defying phenomenon of perpetual levitation happens to be real. What is this "it" that keeps floating up, up, up? The annual bonuses paid to Wall Street's top bankers.

By the laws of economics, if not physics, those bonuses should fall to earth this year, because the bankers have performed poorly. Trading is down, profits are flat (despite being given trillions of dollars in almost-interest-free money through the back door of the Federal Reserve), firms are handing out pink slips to lower-level employees, and the blatant greed of bank honchos have ruined the public reputations of their financial outfits.

Who cares, shriek the big-shots, we make our own laws - it's bonus time, baby, so grab all you can! Sure enough, the CEOs of Goldman Sachs, Citigroup, JPMorgan Chase and others have set aside billions of dollars to flood their executive suites with bonus cash at the end of this year - money that rightfully should go to shareholders.

Their claim is: "We deserve it, for we took low pay during the crash of 2008-2009." For example, Lloyd Blankfein, Goldman Sachs' boss, was paid a mere $9 million last year, so now he wants that "sacrifice" made up to him.

Lest you worry that poor Lloyd's family had to resort to food stamps to make ends meet with that tough $9 million year, note that he had a bit of a cushion, having pocketed a record Wall Street payday of $68 million in 2007 - even as his the financial condition of his bank was crumbling.

One banker-pay analyst says he had assumed that bonuses would go down this year. But, he said, "I underestimated the industry's resiliency." By "resiliency," I assume he was referring to the industry's incurable greed.

While Wall Street bonuses to top bankers keep going up, up, up, guess what keeps going down, down, down? Hint: A recent New York Times headline used the word "soft" to describe it. Give up? It's our economy. Of course, the wordsmith that used the term "soft" to describe today's economy clearly doesn't live on our planet. Soft implies cushions and comfort, while the economic reality that most Americans are experiencing is one of unrelenting hard times.

Indeed, the content of the Times' article defied its own headline, revealing that national economic growth this summer was pathetically weak. Tens of millions of people remain unemployed or underemployed, with millions of them having been mired in joblessness for nearly two years. Even those with jobs have seen their hours cut or wages slashed, so the nation's income growth was an abysmal 0.5 percent during July, August and September - and practically all of that went to the richest Americans, who enjoyed a nice uptick in their stock portfolios.

The way out of this, say the contented flock of economic gurus roosting on their lofty theoretical perches, is for consumers to spend more. Yoo-hoo, wise ones: spend what? The Times conceded that, with incomes of the masses plummeting, consumer demand remains "flaccid" (yet another word for soft). As noted by James K. Galbraith, a down-to-earth economist grounded in reality, "The problematic factor is that consumers remain fundamentally insolvent."

Still, reaching for a silver lining in a dark and stormy cloud, the Times noted that American families are at least shedding some of their consumer debt. Good! Except that much of this is the result of millions of hard-hit families having to default on their credit card bills, student loans, mortgages and other debts they can no longer pay.

The only thing "soft" in today's economy are the heads of economists who keep blaming consumers, rather than fingering the big bankers and corporate CEOs who continue to knock down America's wages, the middle class ... and America itself.

Democrats Could Fare Even Worse Next Time If They Don’t Fix Economy

To win, you need independent voters and they go with economic sentiment: the Democrats have two years to get that right
by Mark Weisbrot
Tuesday, November 9, 2010 by The Guardian/UK

By now, it is clear to most analysts of the United States' midterm election that the economy played a huge role in the Democrats' losses. It is also pretty clear that the vote was a protest vote by people reacting to economic troubles, rather than an attitudinal change in the electorate towards a conservative political agenda.

This can be seen from both pre-election polling data and exit polling. For example, 58% of voters said that they were "trying to send a message about how dissatisfied they are with things in Washington". But voters were more likely to agree with Democratic positions on social security, trade policy and other issues. This despite the fact that an "enthusiasm gap" lowered Democratic turnout. As comedian Jon Stewart prodded Obama in his recent interview on the Daily Show: how did we go from "hope and change" to "please, baby, one more chance?"

But with such a volatile electorate, it is worth examining the outcome in more depth. Political scientist Douglas Hibbs has looked at midterm congressional elections in the US since 1950, and found that 92% of the variance can be explained by just three factors. The first two are just measures of how many seats and votes that the president's party had prior to the current election. The third is a measure of how the economy has done since the last election.

The president and his party have no control over the first two variables: these are basically just measuring the fact that, the better it did in the previous election, the president's party will lose more seats in this one. This is partly because, for example, if the Democrats win more seats, they inevitably have some representatives who are more vulnerable because they hold districts with more Republican voters.

Ignoring for a minute that the president and the Democrats could have done a lot more to fix the economy, Hibbs' model would project about a 41-seat loss for the Democrats in this latest election. Since the Democrats lost about 63 seats, they still did significantly worse than would be predicted. But most of their loss could be explained just by the votes they came in with and the state of the economy. And that was enough to lose the House (the Democrats had a 39-seat majority before the election).

Why does the economy play such a huge role in congressional elections?

Well, of course, it is very important to most people, who have to worry about their future employment prospects, retirement savings and other features of their lives that are dependent on the overall state of the economy – even if they currently have a job. But there is another reason: since the two major parties each have a base that will mostly vote for their candidates, most elections are being determined by "swing voters" – about 35% in this latest election.

Most of these voters are choosing a representative with very little information – most of them know little or nothing about the candidates or how they stand on the issues. The performance of the economy is one of the few politically relevant realities they do know something about: they can see what is happening in the labour market and other everyday indicators. For this reason, they will tend to punish the incumbent party and the sitting congressional representatives if they perceive the economy is doing badly.

In reality, the Democrats could have done a lot more to fix the economy – or at least, they could have tried. After subtracting the state and local government budget tightening, the stimulus provided by the American Recovery and Reinvestment Act only made up for a small fraction – about one-eighth – of the private spending that was lost from the bursting of the real estate bubble. This was the Democrats' fatal mistake.

Will they make the same mistake going forward?

Barring unforeseen circumstances, such as a steep decline in the dollar (which would boost economic growth by reducing imports and increasing exports), the next two years do not look good for the US economy. Even the White House is projecting a figure of more than 8% for unemployment in 2012. If President Obama and the Democrats decide to find common ground with the Republicans on deficit reduction, it will likely make the economy weaker still.

Of course, since the Republicans now have the House, the Democrats have a chance to frame the likely poor economic performance as the GOP's fault – depending partly on what the Republicans do. And President Obama may get lucky and find himself up against someone like Sarah Palin in 2012. But betting on your opponents to defeat themselves is not a good strategy.

The latest conventional wisdom is that another, more adequate stimulus package is off the table now that the Republicans control the House. But the president and his party had better find a way around that. At the very least, they would have to fight very hard for what is needed – as they did not do in the last two years – and make it extremely clear that Republican obstruction is the obstacle to economic recovery. Otherwise, the most likely result in 2012 will be a repeat of what we just saw – only with more losses for the Democrats, including possibly the presidency.

Wall Street Wins Again

by Nomi Prins - Tuesday, November 9, 2010 by

The Republicans may have stormed the House, but it was Wall Street and the Fed that won the election. Regardless of party power plays and posturing, there are two constants that remain unaltered after the election. First, Wall Street will continue on with business as usual while shifting its campaign and lobbying dollars to the new winning team. And second, the Fed will keep on pretending to prop up the economy by buying more U.S. debt, thereby keeping interest rates low, the dollar weak and money cheap for the banking system to inhale. This fictional boosting of the financial economy, absent the real boosting of the general economy, will march on sans debate, inspection or restriction.

In the wake of the election, the Fed pulled off a move detected only by downtown Manhattan. It quietly announced a purchase of $600 billion in Treasury securities (read: our debt) while pundits on the left and right were dissecting the role of the tea party in political life as we know it, the Obama dissatisfaction quotient, and the chance of Sarah Palin heading for the White House in 2012.

That $600 billion figure was about twice what the proverbial "analysts" on Wall Street had predicted. This means that, adding to the current stash, the Fed will have shifted onto its books about $1 trillion of the debt that the Treasury Department has manufactured. That's in addition to $1.25 trillion more in various assets backed by mortgages that the Fed is keeping in its till (not including AIG and other backing) from the 2008 crisis days. This ongoing bailout of the financial system received not a mention in pre- or postelection talk. No one in Congress or the White House gets a say on the maneuver. Yet, it was the Fed buying more treasuries, and not the fact that the Republicans gained control of the House, that caused the Dow to shoot to a 2010 high and bank stocks to rally 2 percent on average.

Like many other Americans, as the results of the elections were pouring in for insta-analysis I was obsessively flipping cable TV channels. It didn't matter whether I landed on Fox, CNBC or MSNBC, the same two main items were being debated: (1) the tea party's rise and (2) the other victorious Republicans (including the ones labeled as tea party candidates-even though they did not actually run as candidates of a separate party, a trick that progressives have never managed to pull off or even try).

All the Republicans sang their refrain from the same song sheet, vowing to work on extending George W. Bush's tax cuts, killing what they refer to as Obamacare, cutting spending (though none gave specific details as to how) and, of course, getting Americans back to work. The catch-and this was a notion taken up by President Barack Obama and ignored by the Fed the very next day-is that the Republicans wanted to do so the free-market way, by reducing government constraints on businesses so they can stop worrying about obstacles like rules, and thus somehow spontaneously start hiring more. (Note: To underscore this strategy, CNBC paraded a bunch of chief executive officers on screen throughout the election night.)

But, for the most part, the Republicans left the so-called financial reform bill alone as a topic, except to make it clear, as incoming House Majority Whip (aka 2012 contender) Eric Cantor did, that they don't want onerous regulations (it is much better to wait for the next leg of this crisis and the loss of more jobs and homes, apparently, than to bar Wall Street from financial innovation).

Here's what wasn't mentioned during the election or postelection chatter: the cost and logic of bailing out, subsidizing and now propping up Wall Street as it heads decisively (despite Obama's promises of those days of fill-in-the-blank being over) to another year of record bonuses.

No winning Republican mentioned repealing the financial reform bill, since it doesn't really actually reform finance, bring back Glass-Steagall, make the big banks smaller or keep them from creating complex assets for big fees. Score one for Wall Street. No winning Democrat thought out loud that maybe since the Republican tea partyers were so anti-bailouts they should suggest a strategy that dials back ongoing support for the banking sector as it continues to foreclose on homes, deny consumer and small business lending restructuring despite their federal windfall, and rake in trading profits. The Democrats couldn't suggest that, because they were complicit. Score two for Wall Street.

In other words, nothing will change. And that, more than the disillusionment of his supporters who had thought he would actually stand by his campaign rhetoric, is why Obama will lose the White House in 2012.

Then, there's the Fed. Ben Bernanke, who like Treasury Secretary Timothy Geithner has survived two administrations under different parties to have a hand in bailing out the banking system and fictitiously stabilizing the markets, continues to run the country into the path of massive debt in the name of easing money, so as to avoid the Second Great Depression from which Obama thinks he saved us (along with Geithner and former Treasury Secretary Hank Paulson).

Last Wednesday morning, Obama had the chance to at least attempt to re-engage the voters who believed in his mantra of change. In his contrition speech, he took responsibility (read: apologized) for having made it seem he extended government too much (thereby taking on the language of the Republican opponents), explaining that we were in an emergency situation (not that the banks screwed up and stole the life rafts). He assured businesses he was still on their side (in case the fact that he's keeping Wall Street lackey Geithner on and his ringing praise for Larry Summers on "The Daily Show" weren't sufficient signs).

It is likely that, going forward, Democrats will fear losing more seats in 2012 and vote more with the pro-bank center. That would be a mistake for them and bad for the country.

Yet sadly, Obama showed pre-emptive signs of capitulation with two words: free market. Toward the end of the Q&A session after his speech, Obama said that the free market has to be "nurtured and cultivated" and that he has to take responsibility to make clear to the business community and the country that the most important thing we can do is boost and encourage our business sector and make sure that companies are hiring. His facial expression was as hollow as his words. He added that "we" have been talking to CEOs constantly (and don't we all feel good about that?)-and that on his trip to Asia this week his whole focus will be on opening up markets, so "we can prosper, sell more goods and create more jobs in the United States" (that playbook comes from Bush Treasury Secretary Paulson, but that policy has been shown only to enable CEOs to outsource more, not less). He also pointed out that a whole bunch of corporate executives will join "us."

And that is the second reason he will not be re-elected: Businesses won't need to fund his next campaign when they can fund the Republicans now that they are back in vogue. Businesses will meanwhile just extract what they can as long as they can, like better deals abroad in the name of free markets-the kind that the Fed is subsidizing back here at home. Obama and his supporters will see this in 2012 if they don't now. The president could go all out and ignore the CEOs and focus on the general populace, but signs point to the contrary. If he has learned something from the November elections about loyalty to his voters, he isn't showing it. So maybe progressives should stop defending him and start yelling at him ... or seriously look for another 2012 candidate to run against Sarah Palin.

Deficit Panel Targets Social Security and Taxes

by Jeff Mason and Donna Smith
Wednesday, November 10, 2010 by Reuters

WASHINGTON - The co-chairmen of a presidential commission to cut the budget deficit on Wednesday proposed reducing benefits and raising the U.S. pension retirement age among an array of tax and spending changes.

Taking aim at some of Washington's most politically explosive fiscal issues, the draft proposals were portrayed as achieving $4 trillion in deficit reduction through 2020, but they got a mixed reception from other commission members.

With a final report due from the panel on December 1, Democratic Representative Jan Schakowsky, a commission member, told reporters: "It's not a proposal I could support."

Republican Representative Paul Ryan, also a commission member, said: "There are things in here I like, things I don't like. This is a serious, impressive effort. It's a good start ... We've got a long way to go."

Co-chairmen Erskine Bowles and Alan Simpson also called for changes to the mortgage interest tax deduction, cuts in defense spending, and a reduced base rate for corporate taxes, according to the draft proposal distributed to reporters.

The proposal suggests raising the Social Security retirement age to 68 by 2050 and 69 by 2075 with a "hardship exception" for certain occupations where that would be unrealistic, the draft said.

Bowles, a Democrat, was chief of staff for President Bill Clinton. Simpson is a retired Republican senator. The two were named to head the commission this year by President Barack Obama in a move meant to show the White House is serious about tackling the deficit.

The two also proposed phasing in budget cuts beginning in fiscal 2012 and bringing down federal spending eventually to 21 percent of gross domestic product.

Fourteen of the panel's 18 members are supposed to approve a final report for Obama containing recommendations to balance the budget. But analysts expect it to be difficult to reach that kind of consensus and predict the commission may end up issuing a less conclusive report.


The commission's proposal came as a separate, private-sector panel called for a shake-up of the budget process that would set clear targets for reducing red ink and impose spending cuts and tax increases if targets were missed.

The recommendation by the Peterson-Pew Commission on Budget Reform, a balanced-budget advocacy group that has no official government role, recommended that the president and Congress be required to respect deficit-reduction targets and that serious consequences be levied for falling short.

If a budget enacted by Congress missed a target, the president could propose cuts to bring it in line, the Peterson-Pew Commission recommended.

"If the target were still missed, spending reductions and tax increases would be imposed through automatic trigger mechanisms," the Peterson-Pew Commission said.

The report from Peterson-Pew -- one of a handful of panels studying the deficit problem -- comes days after an election that swept Republicans to power in the House of Representatives partly on a wave of voter outrage over the $1.3 trillion deficit and the national debt of more than $13.6 trillion.

The presidential commission has held five public meetings this year. Closed-door meetings have occurred regularly.

Democrats are resisting spending cuts, while Republicans, emboldened by the election results, are likely to keep refusing to consider tax hikes, according to commission members.

Most budget analysts agree that some mix of both is needed to tackle the huge problem, but aides said it seemed unlikely that the presidential commission would reach a consensus by the time their final report is due on December 1.

Massive Corporate Water Grab

Even though water privatization has been a massive failure around the world, the World Bank just quietly gave $139 million to its latest corporate buddy.
By Scott Thill, AlterNet
Posted on November 10, 2010

Billions have been spent allowing corporations to profit from public water sources even though water privatization has been an epic failure in Latin America, Southeast Asia, North America, Africa and everywhere else it's been tried. But don't tell that to controversial loan-sharks at the World Bank. Last month, its private-sector funding arm International Finance Corporation (IFC) quietly dropped a cool 100 million euros ($139 million US) on Veolia Voda, the Eastern European subsidiary of Veolia, the world's largest private water corporation. Its latest target? Privatization of Eastern Europe's water resources.

"Veolia has made it clear that their business model is based on maximizing profits, not long-term investment," Joby Gelbspan, senior program coordinator for private-sector watchdog Corporate Accountability International, told AlterNet. "Both the World Bank and the transnational water companies like Veolia have clearly acknowledged they don't want to invest in the infrastructure necessary to improve water access in Eastern Europe. That's why this 100 million euro investment in Veolia Voda by the World Bank's private investment arm over the summer is so alarming. It's further evidence that the World Bank remains committed to water privatization, despite all evidence that this approach will not solve the world's water crisis."

All the evidence Veolia needs that water grabs are doomed exercises can be found in its birthplace of France, more popularly known as the heartland of water privatization. In June, the municipal administration of Paris reclaimed the City of Light's water services from both of its homegrown multinationals Veolia and Suez, after a torrent of controversy. That's just one of 40 re-municipilazations in France alone, which can be added to those in Africa, Asia, Latin America, North America and more in hopes of painting a not-so-pretty picture: Water privatization is ultimately both a horrific concept and a failed project.

"It's outrageous that the World Bank's IFC would continue to invest in corporate water privatizations when they are failing all over the world," Maude Barlow, chairwoman of Food and Water Watch and the author of Blue Covenant: The Global Water Crisis and the Fight for the Right to Water, told AlterNet. "A similar IFC investment in the Philippines is an unmitigated disaster. Local communities and their governments around the world are canceling their contracts with companies like Veolia because of cost overruns, worker layoffs and substandard service."

The Philippines is an excellent example of water privatization's broken model. After passing the Water Crisis Act in 1995, the Philippines landed a $283 million privatization plan managed partially by multinational giants like Suez and Bechtel. After some success, everything fell apart after 2000, and it wasn't long before tariff prices repeatedly increased, water service and quality worsened, and public opposition skyrocketed. Today, some Filipinos still don't have water connections, tariffs have increased from 300 to 700 percent in some regions, and outbreaks of cholera and gastroenteritis have cost lives and sickened hundreds.

"The World Bank has learned nothing from these disasters and continues to be blinded by an outdated ideology that only the unregulated market will solve the world's problems," added Barlow.

But asking the World Bank to learn from disaster would be akin to annihilating its overall mission, which is to capitalize on disaster in the developing world in pursuit of profit. Its nasty history of economic and environmental shock therapy sessions have severely wounded more than one country, and has been sharply criticized by brainiacs like Joseph Stiglitz, who was once the Bank's chief economist, and Naomi Klein, whose indispensable history The Shock Doctrine is a horrorshow of privatization nightmares. From its cultural imperialism and insensitivity to regional differences to its domination by a handful of economic elites drunk on deregulation, whose utter failure needs no further example than our continuing global economic crisis, the World Bank's good intentions have been compromised by an unending string of terrible press and crappier deals.

"In the past, the World Bank pushed privatization as the way to increase investment in basic infrastructure for water systems," said Gelbspan. "But since then bank officials have admitted that the transnational corporations don't want to invest in infrastructure, and instead want only to pare down operations and skim profits. The World Bank has lowered the bar, satisfied with so-called 'operational efficiency,' that cuts utility workforce, tightens up bill collections and shuts off people who can't pay."

That's been a recipe for failure and protest, especially in the very region that IFC and Veolia hope to pump for all its water worth. In 1998, World Bank loans were secured to upgrade the crumbling post-Soviet water system in Yerevan, a city in the Eastern European nation of Armenia. With a caveat: It had to be managed by a private contractor. The Italian transnational ACEA landed the job, but quickly failed to extend water access, partially thanks to company corruption. It also failed to properly maintain water pressure, allowing sewage to seep into the city's drinking water and sicken hundreds. Despite the travesty, the World Bank issued another contract in 2006 to Veolia, which hired ACEA's top executive. Two years later, only one in three Yerevan residents were lucky enough to score 24-hour water service, while contamination problems continued. Veolia's contract with the city is up for renewal in 2015.

The same goes for the Turkish city of Alacati, which landed a $13 million loan in the late '90s, as well as Veolia's incompetence. The city's water bills skyrocketed to 12 times the price of service in other parts of the country. Multiply that times most every nation or city that has privatized its water service, and you've got a good idea of why the World Bank's IFC is under fire for rapacious resource-snatching. And why the developing world is right to be wary of its good graces, although the World Bank can do good when it so chooses.

"The World Bank does not at all speak with one voice on their pro-privatization stance," Darcey O'Callaghan, Food and Water Watch's international policy director, explained to AlterNet. "One staff member referred to it as a bad experiment that has been proven wrong, while higher staffers try to take a more nuanced position, claiming that the Bank is neither for or against privatization but simply promotes the most appropriate model for specific communities. Unfortunately, our own statistics have shown that regardless of their statements, 52 percent of their projects between 2004 and 2008 promoted some form of privatization."

But rather than repair privatization's failed project at its source, the World Bank is simply spinning off its compromised philosophy to the IFC. So while the World Bank may be torn in its endorsement of water privatization, the IFC has no such reservations, in hopes of dodging the slings and arrows of public outcry, and perhaps legal liability.

"What's really scary," O'Callaghan added, "is that we are increasingly seeing the International Finance Corporation pick up where the Bank has left off in water privatization. The IFC is a Bank-sponsored institution whose goal is to promote the private sector, and because their financing also comes from the private sector, they can be more difficult to hold accountable. Worse yet, according to our 2000-2008 stats, 80 percent of IFC loans had gone to the four largest multinational water companies, further concentrating the global water industry."

It's not just water that's at the center of Earth's mounting resource wars. In late October, Britain's government announced it was looking to sell off its state-owned forests to counteract a yawning deficit. Today, natural gas companies are preparing to drill in America's national parks. Indeed, America and Britain's bungled occupation of Iraq is a protracted resource war for control of the embattled nation's oil reserves. Water is just one more natural resource, albeit the most important one, worth a killing to those seeking to callously leverage limited funds for innocent lives.

"Droughts and deserts are spreading in over 100 countries," Barlow said. "It is now clear that our world is running out of clean water, as the demand gallops ahead of supply. These water corporations, backed still by the World Bank, seek to take advantage of this crisis by taking more control over dwindling water supplies."

Which is another way of saying that, regardless of the refreshing trend toward re-municipalization, no one should expect the World Bank or its IFC untouchables to give up the privatization and deregulation ghost anytime soon. That means that every city, and citizen, is due for a day of reckoning of some sort, and should fight back against the bankrupt privatization paradigm with everything in its arsenal.

"Get involved at the local level," O'Callaghan said. "Know where your water comes from. Fight against privatization schemes. Promote conservation. Don't drink bottled water."

And Barlow adds, "The only path to a water-secure future is water conservation, source water protection, watershed restoration and the just and equitable sharing of the water resources of the planet. Water is a commons, a public trust and a human right and no one has the right to appropriate for profit when others are dying from lack of access."

How the Wealthy Organized to Rip Everyone Else off

The policies that benefit a tiny fraction of Americans resulted from a long-concerted effort by the wealthy to thwart laws that might give the rest of Americans a chance.
By Maria Armoudian, AlterNet
Posted on November 10, 2010

For years, wealth has been increasingly concentrated at the very top of the income pyramid with the super-rich owning a larger and larger share of wealth, benefits and power. But while much attention has been focused on fixing a flawed economy, other experts suggest the problem would be better addressed by examining the politics and policies behind the phenomenon. Those policies that continue to benefit a tiny fraction of Americans resulted from a long-concerted effort by the very wealthy who organized campaigns to thwart those laws that might give the rest of Americans a chance. The history and policies are detailed in a book by professors Jacob Hacker and Paul Pierson titled Winner Take All Politics: How Washington Made the Rich Richer and Turned its Back on the Middle Class.

Maria Armoudian: Let’s start with the numbers. You note in Winner Take All Politics that the numbers have been historically hard to get but that now they have been tracked by some economists. What do the numbers tell us?

Jacob Hacker: You’re absolutely right. It’s difficult to look at what’s happening at the very top of the income pyramid because most of the evidence we have had was based on surveys, and because there is not a huge number of rich people in the United States who respond to phone interviews. In the last ten years or so, people have started to really home in on a unique source of evidence, namely income tax statistics, which give us a clearer picture about the rewards of economic growth. What we find is that the wealth is going not just to the top 10 percent of Americans, but really to the tiny slice at the very top, the top one tenth of one percent, even the top one hundredth of one percent. The Congressional Budget Office, using these income tax statistics, calculated that in 2005, the top 100th of one percent, the richest 11,000 households -- had an after-tax income that averaged $24 million a year. That was up from a $4 million average for this group back in 1979. That’s a remarkable change. In contrast, the middle fifth, the middle 20 percent of Americans, saw their incomes over this 1979-2005 period go from $41,000 a year to $50,000 a year. The concentration of income at the top is remarkable and sustained, and over the last 30 or 40 years, it has resulted in relatively little trickle-down to those lower on the economic ladder.

Paul Pierson: People have talked about inequality for a long time, but the fact that the winner’s circle is so small really raises troubling questions about how the American economy is working and how American democracy is working or isn’t working.

MA: Did you look also look at changes in real income?

PP: No but we looked in quite a bit of detail at all the different kinds of income, both what people earn and what they get from government programs, private health insurance and so on. All of that is calculated into these distributions. Some conservatives argue about benefits like healthcare balance out the inequality, even when you take all those things into account, you still see the same results.

JH: We looked at whether or not the middle-class has gotten ahead on other indicators but it’s still clear that most of the economic gains have gone to the richest of the rich. For the first time we have definitive evidence on this point. For example, we looked at social mobility, the degree to which people move up the income ladder, health insurance, pension coverage, debt, foreclosures, bankruptcies and the hours that people are working. Running down the list on all those indicators, the picture looks even worse than merely looking at income. I think this is really why it’s so puzzling. We asked two questions in this book: Why did this occur? And how did this occur? We argue that policy and what government did and didn’t do played an important role. In a democracy, we would expect the middle-class to have tremendous political sway, is where these trends have taken place over a 30 or 40 year period.

MA: You also compared the US to Europe to see if the same phenomenon was happening. What did you find?

PP: Although the United States isn’t the only country that has experienced rising globalization and increasing reliance on technology, it’s one of the few nations that has experienced a big increase in winner-take-all inequality in which the gains are going to the very top. Of the countries that have experienced similar trends, the US is most pronounced. That raises serious questions about the view that this is somehow linked to changes in our economy or society, because many of those [related] changes have occurred in other nations that haven’t experienced these kinds of runaway gains at the top. It also allows us to see that other economic models produced different outcomes. Europe We looked to see if Europe had experienced American levels of economic growth, to determine if there is a kind of silver lining to the cloud of American inequality. We did not find evidence of that. It’s surprising how close American economic expansion and European economic expansion are over the same 30 or 40 year period. Yet Europe has experienced much less of a rise in inequality than the United States.

MA: You also reject the argument that the changes are due to educational and skill differences among people.

JH: Yes, you don’t have to look across the nations to really see that it can’t be education and skills. The most common story is that this [growing inequality] is related to the college-educated pulling away from those who haven’t gone to college. But really what has happened is that the very richest of the rich pulled away from the rest of Americans. Thirty percent of Americans have college degrees and about 10 percent have advanced degrees. Many of those who are outside the winners’ circle are highly-educated. So to use the analogy from Charlie and The Chocolate Factory, this is really a story about how a very small slice of people have received the golden ticket in their chocolate bars, which has catapulted them into a world of great riches. While this is taking place and it is quite distinctively American, we argue that it is closely linked to policy and politics that have very negative consequences for the broad middle class.

MA: You point out aptly in the book that the tension really arises between democracy, which is supposed to be equality for all, and capitalism which is property and ownership-based benefits, which tend to be unequal. How does this tension fit into your argument?

PP: Ever since democracy started, there has been a long-standing interest about its relationship to an economy that often had very high levels of inequality. Some people worried that voters would essentially confiscate the wealth from those who had property while others worried about the opposite, that democracy will be smothered by the wealthy because they’ll be able to translate their disproportionate economic resources into disproportionate political power. It’s a longstanding, real debate that the nation’s founders discussed at length. In the United States, these same issues showed up again and again: They show up during the Progressive Era and during the New Deal. We’re seeing them again today. In the current era, there’s a bigger risk of the second kind of problem -- economic power and growing inequality are translating into political inequality. This was not just a benign economic process. Government played a really important role in shifting power away from unions and towards business. Over the last 30 or 40 years, control of government has been central in reshaping the economy. Many economists don’t see the role that the government plays. That narrow view misses how government influences the economy and the distribution of income and rewards. Obviously, financial regulation is a very prominent example, but much of what we’ve experienced, especially in the last decade, is connected to the political process that fueled financial deregulation. Similarly, the decline of unions has impacted the distribution of both economic rewards and political power.

MA: While the changes go back to WWII, it seems the real shift arrived in the 1970s with the CEOs of large corporations organizing for political and policy changes within the Chamber of Commerce, the Economic Roundtable, The Manufacturer’s Association and these groups. What have you found?

JH: The 1970s are the forgotten decade of American politics. We tend to locate the roots of our current politics and the ideological clashes particularly around cultural issues in the 1960s, but it’s really the 1970s when big shift lead to our present economically and politically polarized era. The turning point is 1978, which no one mentions. That was that year that business mobilized and started to flex their new organizational muscle around issues such as labor law reform, a proposed Consumer Protection Agency, environmental regulation, energy, and a whole host of other issues. On all these issues, the business position and the conservative position won. There was a dramatic showdown in 1978 over labor law reform that involved one of the first sustained filibusters outside the civil rights era, waged by Orrin Hatch. There was just a remarkable shift in the political climate that can’t be attributed to elections or to the balance of power in Congress and the White House – the Democrats had Congress and the White House. It was really linked to the changes in the organization of [big] business. Back in the 1960s and early 1970s, business was really quite [politically] disorganized. They were not active on most issues, and they didn’t have a very extensive lobbying presence. Now that [they] have 30 lobbyists per member of Congress, it’s easy to forget that the 1960s and early 1970s were not dominated by the powerful economic interest groups that are [currently] the major feature of our political climate. The1970s was the turning point that brings to power a new, much more muscular organized business community along with the very up-and-coming conservative movement that hitched its wagon to these new organizational realities.

MA: As I understand, this big business collaborative was really a counter movement to Ralph Nader, the environmental groups and the labor unions – groups that the CEOs believed were hurting their profits. That was articulated in the so-called Lewis Powell memo. Tell us about this.

PP: Before Lewis Powell was appointed to the Supreme Court by President Nixon, he was in a high level position for the Chamber of Commerce where he penned a famous memo, which is symptomatic of a broader shift that was taking place. It articulates the change in attitudes and behavior within the business community exceptionally well, although it was not the original source of this movement. Powell basically said we – the business community -- have got to become more politically organized; we are suffering major defeats in Washington. At this time, towards the later part of a period, Nader and other [related] groups were winning big victories in Washington, such as expansions of environmental regulation, occupational safety legislation and Social Security. Now, a lot of these things occurred with a Republican, Richard Nixon, in the White House, which shows that while partisanship matters, the organizational playing field and the balance of organizational power also matters. So Powell wrote that they [big business] were being badly outflanked by opponents and therefore need to organize, be more aggressive, get businesses to pool resources, develop a long-term strategic plan and the capacity to execute that plan in politics. After that, we saw a whole series of developments: A huge expansion of lobbying groups; the Chamber of Commerce expanded their organizational capacity; the Business Roundtable formed, representing CEOs of the very biggest American companies and activated their political participation. The Roundtable quickly became quite influential in Washington. The NAM, the National Association of Manufacturers, moved their office from New York, where they had been headquartered for a century or more, to Washington, because the director saw Washington as the place of action. Across the board, there was a huge increase in the political role of business, and it has just accelerated since then.

MA: Since that time, new groups have also emerged, such as the Club for Growth, and the business groups also connected to the right-wing Christian organizations. Describe these relationships.

JH: One of the things to understand is that this shift in businesses organization and power was not occurring in a vacuum. Simultaneously, there was a big decline in middle-class organization. Labor unions were obviously the biggest player there, but they weren’t the only middle-class organizations to lose ground. Voluntary federations and fraternal organizations were also losing out to more professional, Washington-oriented and lobbyist-centered organizations. In terms of the Democratic Party’s coalition, they were losing out to groups organized around issues that resonated with professional and more affluent members of the democratic coalition, notably feminism, environmentalism. On the Republican side, the big shift was bringing evangelical Christian conservatives into the fold. This was brokered at the elite level by activists in the Christian conservative movement who were angry, not about Roe v. Wade, but about threats to Christian schools in the early 1980s and their tax-free status. These activists felt very strongly that Christian conservative voters should align with the Republican Party and they very skillfully brought that alliance into being. This was a really important way in which the business community and more affluent members of the Republican coalition were able to enlarge the coalition behind their positions. And this would only have had that kind of effect were it not for the fact that there were changes that were taking place on the other side with the decline of unions and other voluntary organizations. The result is that the organizational landscape transforms over this period, and policy and politics shift in response. It is like a change in the ecosystem of Washington, with a new set of organizational realities, and that changes the kind of species that can find a niche in the Washington policy and political jungle. Both parties were dramatically transformed over the next 30 years in ways that reinforced both policy and politics that are conducive to these very concentrated rewards at the top of the economic ladder, the winner-take-all economy.

MA: In the book’s section titled “Making America Safe for CEOs,” you describe the policies and limitations that really enhanced this system – of course, limits on labor unions but also limits on a person’s ability to file lawsuits against corporate CEOs and corporations and other policies. What are these laws and policies that safeguard CEOs and the super-rich?

PP: The list is long, but I think the core point is first, that this is just one piece of the connection between Washington and the winner-take-all economy. There are changes in financial industries, in tax policies that favor the wealthy, in the way in which corporate governance has evolved to favor the capacity of CEOs to come pretty close to writing their own paychecks. They have docile boards of directors that get a lot of perks from being on boards and are often appointed, one step removed from the CEOs, for whom they set salaries. As everyone knows, the CEO salaries have skyrocketed in ways that don’t bear much connection to the actual performance of the companies. Obviously they do well when the companies prosper, but they often do spectacularly well even when they run the companies into the ground. Washington has played a role in that, mostly just by blocking any attempt to exercise oversight. Any effort toward encouraging the capacity of shareholders or other groups to exercise a role in corporate governance has been blocked. The SEC under Clinton was considering some fairly modest regulations that would have given shareholders a little more leverage. The head of the SEC got called in by Phil Graham who was the head of the Senate Banking Committee and had a lot of control over the SEC’s budget. Graham said, “Unless the water is crimson with the blood of investors, we don’t want you engaging in any regulatory flights of fancy.” And of course, it wasn’t long after this that the water WAS crimson with the blood of investors. Graham was the prototypical figure in developing this very tight connection between winner-take-all politics and economics.

MA: Can you fast forward to today and connect the Tea Party Patriots and the recent election?

PP: The Tea Party is a really interesting development because it represents a very angry conservative movement mobilized in response to Obama’s administration, but in many ways there are some common elements with what many Americans are feeling right now. There is a sense that democracy isn’t working well, that the middle class is not being well-represented. That is indeed reality – middle-class Americans are losing out to a set of concentrated economic interests that have a great deal of sway in Washington. What the Tea Party is doing essentially is using this organization as mobilization to press for a very conservative economic agenda. The electorate as a wholeis much less mobilized. In fact, over the last 30 years, it has been the demobilization of the great broad majority of Americans that has really helped perpetuate this winner-take-all politics. Most Americans are cynical about Washington and distrustful because they think that Washington has worked really well for those at the top but not really well for the rest of Americans. One poll by the Pew Research Center this year found that when Americans are asked who the government helps a great deal, 53 percent thought that Wall Street had been helped a great deal, but only two percent thought that the middle-class had been helped a great deal. There is a really deep sense of grievance about how poorly American democracy seems to be working to represent the middle-class. But now, with the election, we will face gridlock that will make it even harder for us to address the problems.

MA: So in essence what you’re saying is that the voters are exacerbating the problem.

JH: Yes, that is our position. If you believe the evidence, it would be hard to read our book and come away from it thinking that electing a big new group of conservative Republicans is going to make Washington introduce policies more favorable to the middle-class.

MA: So where do we go from here? What are the big fixes that might correct the problems that we’re facing?

PP: The central message of our book is that politics are at the heart of the problem, and therefore politics must be at the heart of the solution. There are people who think our book is bracing because the problems our country faces seem deeply intractable. But these problems are not inexorable or beyond our control. Globalization or technological change does not make it inevitable that the middle or the lower rungs of the economic rungs of the ladder will fall further and further behind a smaller and smaller set of winners at the very top. It is the policies related to taxes, unions, corporate governance, financial deregulation and other such policies that exacerbated the winner-take-all economy. So changes in public policy and government need to be at the heart of the solution. The first order challenge is making new policies, not a new economy. And the number one target for the short-term should address the political system, making it more responsive to the middle. That means making it so that we can actually pass things that matter to Americans. Right now we have a filibuster that requires 60 votes in the Senate on every major issue. It is a huge roadblock to addressing middle-class concerns. It also means, in the longer-term, that we need to figure out ways to bring Americans more broadly into the political process on the same or relatively similar footing to those who are highly organized right now -- the affluent and the ultra-conservative. We need to create middle class organizations. Obviously, rebuilding labor movements is part of that. In the short term, we have to figure out how to make politicians more accountable to middle class voters by increasing people’s access to information and their political leverage.

Evangelicals: Voting for a Corporate Agenda

The evangelical white underclass have given a big boost to the corporate bottom line.
By Frank Schaeffer, AlterNet
Posted on November 10, 2010

Tens of millions of American voters got duped badly in the 2010 election. The bible-thumping white underclass thought they hit back at what they regarded as the nefarious forces trying to “take our country away.”

They were bought, paid for, sold, traded and manipulated by the most powerful in the US election: a Billionaire Lynch Mob led by Rupert Murdoch, Karl Rove, the Koch brothers, and hundreds of millions in organize corporate cash. They peddled a fear agenda: fear of immigrants, fear of government control of our lives, fear that their country would become irrevocably changed.

Here's how it happened:

Where the fear and loathing began

A bedrock article of faith among many of the anti-Obama white voters is that America had “Christian origins,” and that today America must be “restored” to “our religious heritage.” The “Puritan heritage” of America is constantly cited as evidence for our need to return to our “biblical roots.” The Constitution is also waved around as if it too is some sort of Bible to be religiously believed in. Of course the Billionaire Lynch Mob doesn’t care about such quaint ideas as individual liberties, let alone “biblical absolutes,” but many of the people who believed the anti-Obama lies did care.

The earnest, mostly Evangelical dupes have a point: by calling for a “return to our roots” (be they biblical and/or constitutional) they are actually maintaining a grand old American tradition: religious delusion as the basis for conquest. The Puritans believed that they were importing “authentic Christianity” to America, especially as written in the Old Testament. They said that they were on a divine mission, even calling themselves “The New Israel” and a “city set upon a hill.” John Winthrop (governor of Massachusetts Bay) transferred the idea of “nationhood” in biblical Israel to the Massachusetts Bay Company. And the Puritans claimed they were God’s “Chosen People.” They said that they had the right to grab land from the “heathen.” These were the American Indians whom the Puritans thought of as the “new Canaanites,” to be slaughtered with God’s blessing and in the case of the Pequot Indians burned alive.

There are many threads in the anti-Obama tapestry but three are ignored at our peril: 1) The End Times fantasies of the Evangelicals; 2) The rise of so-called Reconstructionist theology and 3) the culture war launched over the legalization of abortion.

These “threads,” not the economy alone, are also the source of the vote where white lower class and white middle class Americans voted in droves against their own self-interest. Let’s unpick these fraying threads one at a time.

1. “End Times” Fantasies

The evangelical/fundamentalists/Republican far right is in the grip of an apocalyptic “Rapture” cult centered on revenge and vindication. This “End Times” death wish is built on a literalist interpretation of the Book of Revelation. This fantasy has many followers. For instance to take one of many examples, Jerry Jenkins and Tim LaHaye’s “Left Behind” series of sixteen novels represents both a “reason” and a symptom of the hysteria that grips so many voters.

The “Left Behind” novels have sold tens of millions of copies while spawning an “End Times” cult, or rather egging it on. Such products as Left Behind video games have become part of the ubiquitous American background noise. Less innocuous symptoms of End Times paranoia include people stocking up on assault rifles and ammunition, freeze dried food (pitched to them, by the way, by Billionaire Lynch Mob-handmaid Glenn Beck), gold (also sold to them by Glenn Beck), adopting "Christ-centered" home school curricula, fear of higher education (“we’ll lose our children to secularism”), embracing rumor as fact (“Obama isn’t an American”) and fighting against Middle East peace iniatives, lest they delay the “return of Jesus,” for instance through Houston mega church pastor John Hagee’s Christian Zionist-centered “ministry.”

A disclosure: My late father, Francis Schaeffer, was a key founder and leader of the American Religious Right. For a time in the 1970s and early 80s I joined him in pioneering the Evangelical anti-abortion Religious Right movement. I changed my mind. I explain why I quit the movement in my book CRAZY FOR GOD -- How I Grew Up As One Of The Elect, Helped Found The Religious Right, And Lived To Take All - Or Almost All - Of It Back.

John Hagee, mega church pastor and founder of Christians United for Israel said: “For 25 almost 26 years now, I have been pounding the Evangelical community over television. The Bible is a very pro-Israel book. If a Christian admits ‘I believe the Bible,’ I can make him a pro-Israel supporter or they will have to denounce their faith. So I have Christians over a barrel you might say.” The assumption Hagee makes -- that “Bible-believing Christians” will be pro-Israel -- is the dominant view among American Evangelical Christians. These are the people who goad us to make perpetual war worldwide. And these are the people who supposedly follow a teacher who said, “Blessed are the peacemakers.”

Few within the Evangelical community have dared to publically question such Haggee’s approach. The Christian Zionists led by Hagee et al even went after their very own George W Bush for backing peace talks between Palestinians and the Israeli government. So can you imagine the hatred the Christian Zionists have for President Obama, who also wants peace in the Middle East?

The momentum for building a subculture that’s seceding from mainstream society (in order to await "The End Times" has irrevocably pried loose a chunk of the American population from both sanity and from their fellow citizens. The Christian Zionist franchise holds out hope for the self-disenfranchised that -- at last -- everyone will know "We born-again Christians" were right and "They" were wrong. But here’s the political significance of the Christian Zionist dominance: the evangelical/fundamentalists’ imagined victimhood.

I say imagined victimhood, because the born-agains are hardly outsiders let alone victims. They’re very own George W Bush was in the White House for eight long, ruinous years and Evangelicals also dominated American politics for the better part of thirty years before that by enforcing a series of “moral” litmus tests that transformed the Republican Party into their very own culture wars lickspittle.

Nevertheless, the white evangelical/conservative Roman Catholic sense of being a victimized minority only grew with their successes. “You are not alone!” said Glenn Beck, playing to these “disenfranchised” “victims,” who – as the midterm results once again proved -- turn out to look more like a majority of white voters who had the power to turn Sarah Palin into a multimillionaire overnight and send the likes of Rand Paul to the Senate.

2. The Rise of Reconstructionist Theology

Where did the “victims” on the Far Right get their “theology” of perpetual damn-the-facts victimhood from? The history of theology (Christian or otherwise) is the history of people desperately trying to fit the way things actually are into the way their “holy” books say they should be. And since the facts don’t fit and never will, religious believers can either change their minds, embrace paradox, or find someone else to blame for their never-ending loss of face and self-esteem.

Most Americans have never heard of the Reconstructionists. But they have felt their impact through the Reconstructionists’ (often indirect) influence over the wider Evangelical community. In turn, the Evangelicals shaped the politics of a secular culture that barely understood the Religious Right let alone the forces within that movement that gave it its rage.

If you feel victimized by modernity (let alone humiliated by reality) then the Reconstructionists have The Answer to your angst: apply the full scope of the Biblical Law to modern America and to the larger world! Coerce “non-believers” to live in your imaginary universe! In other words Reconstructionists wanted to replace the U.S. Constitution and Bill of Rights with their interpretation of the Bible.

Most Evangelicals are positively moderate by comparison to the Reconstructionist “thinkers.” Most libertarians, who formed the backbone of the Tea Party (at least until the Far Right Evangelicals began to take the Tea Party over) would hate them. But the Reconstructionist movement is a distilled version of the more mainstream evangelical version of exclusionary theology that nonetheless divides America into the “Real America” (as the Far Right claim only they are) and the rest of us “sinners.”

The Reconstructionist worldview is ultra Calvinist, but like all Calvinism has its origins in ancient Israel/Palestine, when vengeful and ignorant tribal lore was written down by frightened men (the nastier authors of the Bible) trying to defend their prerogatives to bully women, murder rival tribes and steal land. These justifications probably reflect later thinking: origin myths used as propaganda to justify political and military actions after the fact—i.e., to justify their brutality the Hebrews said that God made them inflict on others and/or that they were “chosen.”

In its modern American incarnation, which hardened into a twentieth century movement in the 1960s and became widespread in the 1970s, Reconstructionism was propagated by people I knew personally and worked with closely when I too was a Religious Right activist claiming God’s special favor. The leaders of the Reconstructionist movement included the late Rousas Rushdoony (Calvinist theologian, father of modern-era Christian Reconstructionism, patron saint to gold-hoarding Federal Reserve-haters, and creator of the modern Evangelical home-school movement), his son-in-law Gary North (an economist, gold-buff, publisher and leading conspiracy theorist), and David Chilton (ultra-Calvinist pastor and author.)

Reconstructionism, also called Theonomism, seeks to reconstruct “our fallen society.” Its worldview is best represented by the publications of the Chalcedon Foundation, which has been classified as an anti-gay hate group by the Southern Poverty Law Center. According to the Chalcedon Foundation website, the mission of the movement is to apply “the whole Word of God” to all aspects of human life: “It is not only our duty as individuals, families and churches to be Christian, but it is also the duty of the state, the school, the arts and sciences, law, economics, and every other sphere to be under Christ the King. Nothing is exempt from His dominion. We must live by His Word, not our own.

It’s no coincidence that the rise of the Islamic Brotherhoods in Egypt and Syria and the rise of Reconstructionism took place in more or less the same twentieth-century time frame—as modernism, science and “permissiveness” collided with a frightened conservatism rooted in religion. The writings of people such as Muslim Brotherhood founder Hassan al-Banna and those of Rushdoony are virtually interchangeable when it comes to their goals of “restoring God” to his “rightful place” as he presides over law and morals. Or as the late Reconstructionist/Calvinist theologian David Chilton, writing in PARADISE RESTORED--A Biblical Theology of Dominion (and sounding startlingly al-Banna-like) explained:

Our goal is a Christian world, made up of explicitly Christian nations. How could a Christian desire anything else? Our Lord Himself taught us to pray: “Thy Kingdom come; Thy will be done on earth, as it is in heaven” (Matt. 6: 10)… The Lord’s Prayer is a prayer for the worldwide dominion of God’s Kingdom… a world of decentralized theocratic republics.... That is the only choice: pagan law or Christian law. God specifically forbids “pluralism.” God is not the least bit interested in sharing world dominion with Satan.

The message of Rushdoony’s work is best summed up in one of his innumerable Chalcedon Foundation position papers, “The Increase of His Government and Peace.” He writes: “[T]he ultimate and absolute government of all things shall belong to Christ.” In his book Thy Kingdom Come -- using words that are similar to those the leaders of al Qaida would use decades later in reference to “true Islam” -- Rushdoony argues that democracy and Christianity are incompatible: “Democracy is the great love of the failures and cowards of life,” he writes. “One [biblical] faith, one law and one standard of justice did not mean democracy. The heresy of democracy has since then worked havoc in church and state… Christianity and democracy are inevitably enemies.”

3. The Culture Wars Launched over the Abortion Debate

The significance and rise of the Reconstructionists and their (often indirect) impact on the wider evangelical subculture can only be understood in the context of the January 22, 1973 Supreme Court ruling on Roe v. Wade.

Roe energized the culture war like nothing else before or since. This war has even fed the passion that burned within the so-called Tea Party movement’s reaction to Obama’s moderate legislative health care reform predicting “Death Panels.” Roe also indirectly energized even those members of the Far Right – for instance the Tea Party’s pro-choice libertarians -- who didn’t care about abortion per se. Roe had such far-reaching effects because reactions to Roe defined the scorched-earth, winner-take-all and rabidly anti-government tone of the culture war fights since 1973.

Fast forward thirty years to the first decade of the twenty-first century: The messengers and day-to-day “issues” changed but the volume of the anti-government “debate” and anger originated with the anti-abortion movement. “Death Panels!”, “Government Takeover!”, “Obama is Hitler!” and all such “comments” were simply updated versions of “pro-life” rhetoric. And ironically, at the very same time as the Evangelicals who began the anti-abortion crusade (along with conservative Roman Catholics) had thrust themselves into bare knuckle politics over Roe, they also (I should say we also) retreated to what amounted to virtual walled compounds.

Evangelicals created a parallel “Christian America,” our very own private world, as it were, posted with “No Trespassing” signs. Our new “world” was about creating a Puritan/Reconstructionist-style holy-nation-within-our-fallen-nation.

This went far beyond mere alternative schools and home schools. Thousands of new Christian bookstores opened, countless Evangelical radio programs flourished in the 1970s and 80s, and new TV stations went on the air. Even a “Christian Yellow Pages” (a guide to Evangelical tradesmen) was published advertising “Christ-centered plumbers,” accountants and the like who “honor Jesus.” New Evangelical universities and even new law schools appeared, seemingly overnight with a clearly defined mission to “take back” each and every profession – including law and politics – “for Christ.” For instance, Liberty University’s Law School was the creation of the late Jerry Falwell, who told me in 1983 of his vision for Liberty’s programs: “Frank, we’re going train a new generation of judges and world leaders in the law from a Christian worldview to change America.” This was the same Jerry Falwell who wrote in America Can Be Saved: “I hope I live to see the day when, as in the early days of our country, we won’t have any public schools.”

To the old-fashioned Goldwater-type conservative mantra of “big government doesn’t work,” in the 1970s the newly-radicalized Evangelicals added “the US Government is Evil!” Our swap of spiritual faith for the illusion of political power – I say “illusion” since even in the 70s and 80s the real power was in the hands of the Billionaire Lynch Mob -- meant that we would tell people how to vote, but that we didn’t want our kids going to school with theirs. We’d wind up defending not just private schools and home schooling to “protect” our children from the world, but also private oil companies and private gas-guzzling polluting cars, private insurance conglomerates and so forth.

The price for the Religious Right’s wholesale idolatry of private everything was that Christ’s reputation was tied to a cynical political party owned by billionaires from the fast-food industry, raping the earth (not to mention our health), to the oil companies destroying our climate. It only remained for a Far Right Republican-appointed majority on the Supreme Court to rule in 2010 (Citizens United V. The Federal Election Commission), that unlimited corporate money could pour into political campaigns – anonymously -- in a way that clearly favored corporate America and the super wealthy who long since were the only entities served by the Republican Party’s defense of the individual against the government. The “individuals” turned out to be Exxon, the Koch brothers, Rupert Murdoch, McDonald’s and Goldman Sachs et al.


It’s a question of legitimacy and illegitimacy. What the Religious Right, including the Religious Right’s Roman Catholic and Protestant “intellectuals” (like my father) did, was contribute to a climate where the very legitimacy of our government, even any government, is up for grabs. Then the internet came along and Fox News came along and Rush Limbaugh, Michele Bachmann et all came along and no fiction was too fantastical to be believed as fact. We passed into a high tech stone age, myth superstition and outright lies gained a new currency.

Following the election of our first black President, the “politics” of the Evangelical, Roman Catholic and Mormon Far Right was not the politics of a loyal opposition, but the instigation of race-tinged revolution first and best expressed by Rush Limbaugh when he said, “I hope Obama fails.” All that happened in the midterm election of 2010 was that the corporate interests (unleashed by the Supreme Court), the Republican Party leadership and the Tea Party built on and/or cashed in on, the “biblically-based” antigovernment passion.

This was the politics that won in the Republican gains in the 2010 midterm elections. This was the logical conclusion of the process of delegitimizing the Federal Government that was launched by the Reconstructionists, the anti-abortion movement and of course is fed by the “Left Behind”/Christian Zionist apocalyptic revenge fantasy.

The Billionaire Lynch Mob’s only sacrament is fear. Their reward for cashing in on white religiously-believing middle class American’s addiction to Bronze Age biblical mythology is to walk away with our country. And fear-filled white Americans don’t get anything in return, unless you count their fleeting visceral pleasure of putting “that uppity black man” in the White House in his place.

A Recipe for Fascism

American politics, as the midterm elections demonstrated, have descended into the irrational.
By Chris Hedges, Truthdig
Posted on November 10, 2010

American politics, as the midterm elections demonstrated, have descended into the irrational. On one side stands a corrupt liberal class, bereft of ideas and unable to respond coherently to the collapse of the global economy, the dismantling of our manufacturing sector and the deadly assault on the ecosystem. On the other side stands a mass of increasingly bitter people whose alienation, desperation and rage fuel emotionally driven and incoherent political agendas. It is a recipe for fascism.

More than half of those identified in a poll by the Republican-leaning Rasmussen Reports as “mainstream Americans” now view the tea party favorably. The other half, still grounded in a reality-based world, is passive and apathetic. The liberal class wastes its energy imploring Barack Obama and the Democrats to promote sane measures including job creation programs, regulation as well as criminal proceedings against the financial industry, and an end to our permanent war economy. Those who view the tea party favorably want to tear the governmental edifice down, with the odd exception of the military and the security state, accelerating our plunge into a nation of masters and serfs. The corporate state, unchallenged, continues to turn everything, including human beings and the natural world, into commodities to exploit until exhaustion or collapse.

All sides of the political equation are lackeys for Wall Street. They sanction, through continued deregulation, massive corporate profits and the obscene compensation and bonuses for corporate managers. Most of that money—hundreds of billions of dollars—is funneled upward from the U.S. Treasury. The Sarah Palins and the Glenn Becks use hatred as a mobilizing passion to get the masses, fearful and angry, to call for their own enslavement as well as to deny uncomfortable truths, including global warming. Our dispossessed working class and beleaguered middle class are vulnerable to this manipulation because they can no longer bear the chaos and uncertainty that come with impoverishment, hopelessness and loss of control. They have retreated into a world of illusion, one peddled by right-wing demagogues, which offers a reassuring emotional consistency. This consistency appears to protect them from the turmoil in which they have been forced to live. The propaganda of a Palin or a Beck may insult common sense, but, for a growing number of Americans, common sense has lost its validity.

The liberal class, which remains rooted in a world of fact, rationalizes placating corporate power as the only practical response. It understands the systems of corporate power. It knows the limitations and parameters. And it works within them. The result, however, is the same. The entire spectrum of the political landscape collaborates in the strangulation of our disenfranchised working class, the eroding of state power, the criminal activity of the financial class and the paralysis of our political process.

Commerce cannot be the sole guide of human behavior. This utopian fantasy, embraced by the tea party as well as the liberal elite, defies 3,000 years of economic history. It is a chimera. This ideology has been used to justify the disempowerment of the working class, destroy our manufacturing capacity, and ruthlessly gut social programs that once protected and educated the working and middle class. It has obliterated the traditional liberal notion that societies should be configured around the common good. All social and cultural values are now sacrificed before the altar of the marketplace.

The failure to question the utopian assumptions of globalization has left us in an intellectual vacuum. Regulations, which we have dismantled, were the bulwarks that prevented unobstructed brutality and pillaging by the powerful and protected democracy. It was a heavily regulated economy, as well as labor unions and robust liberal institutions, which made the American working class the envy of the industrialized world. And it was the loss of those unions, along with a failure to protect our manufacturing, which transformed this working class into a permanent underclass clinging to part-time or poorly paid jobs without protection or benefits.

The “inevitability” of globalization has permitted huge pockets of the country to be abandoned economically. It has left tens of millions of Americans in economic ruin. Private charity is now supposed to feed and house the newly minted poor, a job that once, the old liberal class argued, belonged to the government. As John Ralston Saul in “The Collapse of Globalization” points out, “the role of charity should be to fill the cracks of society, the imaginative edges, to go where the public good hasn’t yet focused or can’t. Dealing with poverty is the basic responsibility of the state.” But the state no longer has the interest or the resources to protect us. And the next target slated for elimination is Social Security.

That human society has an ethical foundation that must be maintained by citizens and the state is an anathema to utopian ideologues of all shades. They always demand that we sacrifice human beings for a distant goal. The propagandists of globalization—from Lawrence Summers to Francis Fukuyama to Thomas Friedman—do for globalization and the free market what Vladimir Lenin and Leon Trotsky did for Marxism. They sell us a dream. These elite interpreters of globalism are the vanguard, the elect, the prophets, who alone grasp a great absolute truth and have the right to impose this truth on a captive people no matter what the cost. Human suffering is dismissed as the price to be paid for the coming paradise. The response of these propagandists to the death rattles around them is to continue to speak in globalization’s empty rhetoric and use state resources to service a dead system. They lack the vision to offer any alternative. They can function only as systems managers. They will hollow out the state to sustain a casino capitalism that is doomed to fail. And what they offer as a solution is as irrational as the visions of a Christian America harbored by many within the tea party.

We are ruled by huge corporate monopolies that replicate the political and economic power, on a vastly expanded scale, of the old trading companies of the 17th and 18th centuries. Wal-Mart’s gross annual revenues of $250 billion are greater than those of most small nation-states. The political theater funded by the corporate state is composed of hypocritical and impotent liberals, the traditional moneyed elite, and a disenfranchised and angry underclass that is being encouraged to lash out at the bankrupt liberal institutions and the government that once protected them. The tea party rabble, to placate their anger, will also be encouraged by their puppet masters to attack helpless minorities, from immigrants to Muslims to homosexuals. All these political courtiers, however, serve the interests of the corporate state and the utopian ideology of globalism. Our social and political ethic can be summed up in the mantra let the market decide. Greed is good.

The old left—the Wobblies, the Congress of Industrial Workers (CIO), the Socialist and Communist parties, the fiercely independent publications such as Appeal to Reason and The Masses—would have known what to do with the rage of our dispossessed. It used anger at injustice, corporate greed and state repression to mobilize Americans to terrify the power elite on the eve of World War I. This was the time when socialism was not a dirty word in America but a promise embraced by millions who hoped to create a world where everyone would have a chance. The steady destruction of the movements of the left was carefully orchestrated. They fell victim to a mixture of sophisticated forms of government and corporate propaganda, especially during the witch hunts for communists, and overt repression. Their disappearance means we lack the vocabulary of class warfare and the militant organizations, including an independent press, with which to fight back.

We believe, like the Spaniards in the 16th century who pillaged Latin America for gold and silver, that money, usually the product of making and trading goods, is real. The Spanish empire, once the money ran out and it no longer produced anything worth buying, went up in smoke. Today’s use in the United States of some $12 trillion in government funds to refinance our class of speculators is a similar form of self-deception. Money markets are still treated, despite the collapse of the global economy, as a legitimate source of trade and wealth creation. The destructive power of financial bubbles, as well as the danger of an unchecked elite, was discovered in ancient Athens and detailed more than a century ago in Emile Zola’s novel “Money.” But we seem determined to find out this self-destructive force for ourselves. And when the second collapse comes, as come it must, we will revisit wrenching economic and political tragedies forgotten in the mists of history.

Our Cowardly Corporate Media

If there is a silver lining in the action of MSNBC against Keith Olbermann, it is that people will now pay more attention to the political role of corporate media in America.
By Sen. Bernie Sanders, AlterNet
Posted on November 10, 2010

If there is a silver lining in the action of MSNBC against Keith Olbermann, it is that people will now pay more attention to the political role of corporate media in America. While commentators on Fox and right-wing radio have the backing of Rupert Murdoch, a major Republican contributor, and other conservative corporations, progressives understand that their position is extremely vulnerable. Keith Olbermann was suspended by General Electric's MSNBC for a bogus reason. What will prevent the same thing from happening to Rachel Maddow, Ed Schultz and other progressives?

General Electric, NBC's parent, is one of the largest corporations in the world with an anti-labor history of outsourcing jobs and with financial links to military and nuclear power industries. Surely we understand that GE is not going to provide the same backing for MSNBC commentators that Rupert Murdoch provides for his mouthpieces at Fox News.

What has not gotten a lot of attention in the midst of this controversy is that GE's NBC Universal, one of the largest media conglomerates in the country, is in the process of merging with Comcast, the largest cable television provider in America. The new head of that company would be Stephen B. Burke, Comcast's chief operating officer and a "Bush Ranger" who raised at least $200,000 for the 2004 reelection campaign of President George W. Bush.

As Vermont's senator, I intend to do all that I can do to stop this merger. There already is far too much media concentration in this country. We need more diversity. We need more local ownership. We need more viewpoints. 

Selling Out to the Bankers

Obama's Biggest Mistake
The original sin of Obama's presidency was to trust bank-friendly economists and Bush carryovers, whose primary goal was to protect their own past decisions and futures.
By James K. Galbraith, New Deal 2.0
Posted on November 10, 2010

Bruce Bartlett says it was a failure to focus. Paul Krugman says it was a failure of nerve. Nancy Pelosi says it was the economy’s failure. Barack Obama says it was his own failure -- to explain that he was, in fact, focused on the economy.

As Krugman rightly stipulates, Monday-morning quarterbacks should say exactly what different play they would have called. Paul’s answer is that the stimulus package should have been bigger. No disagreement: I was one voice calling for a much larger program back when. Yet this answer is not sufficient.

The original sin of Obama’s presidency was to assign economic policy to a closed circle of bank-friendly economists and Bush carryovers. Larry Summers. Timothy Geithner. Ben Bernanke. These men had no personal commitment to the goal of an early recovery, no stake in the Democratic Party, no interest in the larger success of Barack Obama. Their primary goal, instead, was and remains to protect their own past decisions and their own professional futures.

Up to a point, one can defend the decisions taken in September-October 2008 under the stress of a rapidly collapsing financial system. The Bush administration was, by that time, nearly defunct. Panic was in the air, as was political blackmail -- with the threat that the October through January months might be irreparably brutal. Stopgaps were needed, they were concocted, and they held the line.

But one cannot defend the actions of Team Obama on taking office. Law, policy and politics all pointed in one direction: turn the systemically dangerous banks over to Sheila Bair and the Federal Deposit Insurance Corporation. Insure the depositors, replace the management, fire the lobbyists, audit the books, prosecute the frauds, and restructure and downsize the institutions. The financial system would have been cleaned up. And the big bankers would have been beaten as a political force.

Team Obama did none of these things. Instead they announced “stress tests,” plainly designed so as to obscure the banks’ true condition. They pressured the Federal Accounting Standards Board to permit the banks to ignore the market value of their toxic assets. Management stayed in place. They prosecuted no one. The Fed cut the cost of funds to zero. The President justified all this by repeating, many times, that the goal of policy was “to get credit flowing again.”

The banks threw a party. Reported profits soared, as did bonuses. With free funds, the banks could make money with no risk, by lending back to the Treasury. They could boom the stock market. They could make a mint on proprietary trading. Their losses on mortgages were concealed -- until the fact came out that they’d so neglected basic mortgage paperwork, as to be unable to foreclose in many cases, without the help of forged documents and perjured affidavits.

But new loans? The big banks had given up on that. They no longer did real underwriting. And anyway, who could qualify? Businesses mostly had no investment plans. And homeowners were, to an increasing degree, upside-down on their mortgages and therefore unqualified to refinance.

These facts were obvious to everybody, fueling rage at “bailouts.” They also underlie the economy’s failure to create jobs. What usually happens (and did, for example, in 1994 - 2000) is that credit growth takes over from Keynesian fiscal expansion. Armed with credit, businesses expand, and with higher incomes, public deficits decline. This cannot happen if the financial sector isn’t working.

Geithner, Summers and Bernanke should have known this. One can be fairly sure that they did know it. But Geithner and Bernanke had cast their lots, with continuity and coverup. And Summers, with his own record of deregulation, could hardly have complained.

To counter calls for more action, Team Obama produced sunny forecasts. Their program was right-sized, because anyway unemployment would peak at 8 percent in 2009. So Larry Summers said. In making that forecast, the Obama White House took responsibility for the entire excess of joblessness above eight percent. They made it impossible to blame the ongoing disaster on George W. Bush. If this wasn’t rank incompetence, it was sabotage.

This is why, in a crisis, you need new people. You must be able to attack past administrations, and override old decisions, without directly crossing those who made them.

President Obama didn’t see this. Or perhaps, he didn’t want to see it. His presidential campaign was, after all, from the beginning financed from Wall Street. He chose his team, knowing exactly who they were. And this tells us what we need to know, about who he really is.